Direct sale of goods above £135 via a marketplace
Based on the nature of the transactions, the responsibilities are the following
The merchant is selling goods to consumers via the marketplace with a value above £135 and the goods are shipped to the UK. This transaction is subject to import VAT and the obligation to settle import VAT depends on terms of sale, usually stipulated by a contract and delivery terms (for example Delivered Duty Paid - DDP). If the merchant is responsible for customs clearance and settling import VAT, it has to report import and subsequent domestic sale in the UK. In this case the merchant has to register for VAT in the UK, file VAT returns and pay VAT to the tax authorities.
*Please note that special rules apply for sales to business customers, sales to Northern Ireland, sales of goods subject to excise duties and gifts.
*While our tutorial brings clarity to complex rules, it is not tax advice. There are many exceptions to these rules and the legislation is constantly changing therefore always speak with your trusted tax expert. If you need practical assistance with your VAT obligations we will be happy to help you.