HMRC are changing the way they carry out VAT Assessments for overseas online marketplace traders who submit inaccurate returns.

21 Jul 2022

From September 2022, HMRC will change the way they carry out VAT assessments for overseas online marketplace traders. HMRC will start sending VAT assessments instead of asking for information from traders, in cases where information held by HMRC indicates that the VAT returns are inaccurate. HMRC are doing this because they believe they hold the right information so do not require traders to send in the same details. The assessments will be sent to the trader’s registered UK address, which may be their agent’s address. 

These assessments will:

  • cover VAT returns for periods up until December 2020
  • be subject to statutory review and appeals rights.  

The assessment letters will tell traders what to do if they:

  • think that the information we hold is wrong
  • want to provide more information.

If a trader struggles to pay an assessment, HMRC say that they will work with them to arrange more time to pay. If they do not pay their assessment or arrange a time-to-pay agreement, HMRC will issue a Joint and Several liability notice to the hosts of the online platform they trade from. The marketplace will then decide what it thinks is necessary to protect itself from being pursued by HMRC for the trader’s VAT debts. This may include withdrawing permission for them to sell on its website. If this happens, the trader will not be able to trade on the marketplace until HMRC withdraw the notice and it can then take up to 6 weeks for hosts to allow a trader to use their platform again. 

HMRC want to encourage traders and their agents to correct returns before they receive an assessment, to avoid any penalties. For more information on how to do this, go to How to correct VAT errors and make adjustments.

The VAT rules for overseas sellers who operate on online marketplaces, changed on 1 January 2021. For more information about this change, go to VAT and overseas goods sold to traders in the UK using online marketplaces.