The UK HM Revenue and Customs published a policy paper on the changes to the VAT treatment of overseas goods sold to UK customers. Online marketplaces involved in facilitating sales are deemed responsible for collecting and accounting for the VAT, when the goods are owned by a seller who is based outside the UK, the goods are located in the UK at the point of sale and the seller sells the goods to a customer in the UK through an online marketplace to a business not registered for VAT. The paper defines an online marketplace as electronic interface (website or mobile application) such as a marketplace, platform, portal or similar that facilitates the sale of goods to customers. This includes any business using a website or mobile phone app (such as a marketplace, platform or portal) to handle the sale of goods to customers which in any way sets the terms and conditions on how goods are supplied to the customer, is involved in authorising or facilitating customers’ payments and is involved in the ordering or delivery of the goods. A business solely involved in payment processing, advertising and redirecting of customers without further intervention is not regarded as online marketplace.
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