UK Plans to Require Platforms to Collect VAT from Domestic Sellers from October 2027
The UK plans to expand platform VAT collection responsibilities from October 2027, assessing sales separately by platform and covering some UK-based business sellers.
What are the key facts?
- 1UK plans to expand platform VAT collection responsibilities from October 2027
- 2Amazon, eBay and other platforms will collect and remit VAT for some UK-based business sellers
- 3Businesses with annual sales exceeding £90,000 on a single platform are covered
What happened?
The UK government plans to expand online platforms’ responsibility to collect VAT from October 2027, requiring Amazon, eBay and other platforms to collect and remit VAT for some UK-based business sellers. The proposed scope includes UK businesses already registered for VAT and businesses with annual sales exceeding £90,000 on a single platform. The sales threshold will be calculated separately for each platform; sellers operating on multiple platforms will not combine all platform sales when determining whether they exceed the threshold. The original report says that individuals occasionally selling used goods, non-commercial personal sales and business-to-business transactions are not expected to fall within the new rules. Cross-border sellers with a company, inventory or local operating entity in the UK that sell to consumers through platforms such as Amazon UK and eBay UK may face direct VAT withholding by platforms, lower settlement payouts, and greater requirements for tax data retention and product classification. Small businesses with annual sales below £90,000 that are not VAT-registered will not initially be among the main collection targets, but they will still need to retain sales records and monitor the final implementation rules.
What does this mean for cross-border sellers?
From October 2027, the UK plans to expand platform VAT collection and remittance responsibilities, with Amazon, eBay and other platforms assessing separately by platform whether certain UK-based business sellers are covered. Eligible sellers may face lower payouts and higher requirements for tax-data retention and product classification; sales across multiple platforms cannot be combined when assessing the threshold.
What should sellers do now?
- 1This week, export annual sales separately from Amazon UK and eBay UK, and flag UK business accounts that are VAT-registered or exceed £90,000 on a single platform; create a platform-by-platform applicability checklist and prohibit combined-threshold assessments.Marketplace fee compare
- 2This week, record UK consumer orders separately for Amazon UK and eBay UK, and review the settlement and tax-data fields affected by future VAT collection; create independent record templates for the two platforms and retain a product-classification review item.Profit calculator