TITLE: Budget Day: Marketplace VAT, E-Invoicing and Tribunal Lessons for VAT-Registered Businesses
Budget Day is here. Before Chancellor John Healey’s statement, expected around 12:30pm, this edition sets out what is known and what to watch for in the published documents.
Important: Marketplace VAT changes are still proposals unless confirmed in today’s Budget documents and, where required, legislation. A speech alone may not provide the full detail.
Marketplace VAT: prepare for a decision, not a rumour
The government’s consultation on extending online marketplace VAT liability closed on 18 August. A formal response has not been published as of this morning.
Reports in the Telegraph and Guardian on 14 October suggested the Chancellor was considering requiring marketplaces to collect VAT on certain UK domestic sales. The reported proposal could apply to marketplace sales above a threshold linked to the £90,000 VAT registration threshold. Reports estimated the measure could raise around £1 billion a year, potentially supporting business rates relief for high-street businesses.
These are press reports, not confirmed Budget measures. The consultation explored different options, including a minimum platform threshold and possible protections for businesses below the VAT registration threshold. It also said individual non-business sellers, such as people selling their own second-hand items, would not be in scope. The standard £90,000 VAT registration threshold remains unchanged unless official documents say otherwise.
If marketplace collection were introduced, the platform might account for VAT on affected sales, while your own-site and other non-marketplace sales would remain your responsibility. For a registered seller, that could change how marketplace transactions appear in VAT records and affect cash flow. The exact treatment would depend on the final rules.
Use this checklist to prepare
- Map your sales channels. Separate marketplace transactions from sales through your own website or direct invoices. This makes it easier to identify which transactions could be affected.
- Check your VAT registration position. HMRC’s registration guidance says you generally need to register if taxable turnover exceeds £90,000 over 12 months, or you expect it to exceed that amount in the next 30 days.
- Model the margin and cash-flow impact. Test different scenarios for platform sales, VAT treatment, fees and pricing. This will help you understand where any change could affect your margins.
- Reconcile marketplace reports to your VAT returns. A reliable baseline will help you identify differences and keep a clear audit trail if collection responsibilities change.
- Read the documents, not just the speech. Check the Budget policy papers and Red Book for the government’s response, scope, thresholds and any proposed start date.
E-invoicing roadmap: prepare your systems early
The UK government has committed to mandatory e-invoicing for VAT invoices from 2029. The existing consultation response states that this applies to VAT invoices, typically used for B2B and B2G transactions. The government has also identified Peppol as the core interoperability network and said that a roadmap is due at Budget 2026.
The roadmap should clarify details that matter to finance teams, including:
- Whether the data standard will use Peppol BIS Billing 3.0 or a UK-specific specification.
- How rules will apply to simplified invoices, self-billing, cross-border supplies and other edge cases.
- Whether smaller businesses will receive a later start date or other transition support.
- Which providers can operate as Access Points, and how they will be approved.
- How legacy systems, transition arrangements and penalties will be handled.
- Whether invoice data could be reported to HMRC in future.
The government’s consultation response describes a decentralised approach and says real-time reporting will not be introduced alongside the 2029 mandate. That does not settle what may happen later, so check today’s roadmap for any confirmed changes.
Start an e-invoicing readiness inventory now. List your accounting software, ERP or finance system, current invoice formats and the customer data you collect. A PDF attachment alone is not a structured e-invoice. For cross-border businesses, this groundwork also matters because EU VAT in the Digital Age rules are due to introduce digital reporting for intra-EU cross-border B2B transactions from 1 July 2030. Review the European Commission’s ViDA overview alongside the UK roadmap.
Tribunal watch: keep evidence and appeal records complete
Unatrade: a till receipt may not support your input VAT claim
In Unatrade Ltd v HMRC [2026] UKFTT 1438 (TC), a trader claimed more than £151,000 in input VAT on luxury watches bought for export. The company held till receipts and bank statements, but generally lacked VAT invoices meeting the requirements of regulation 14 of the VAT Regulations 1995. The records did not provide required information such as adequate customer details and the VAT rate or amount.
HMRC used its discretion under regulation 29(2) to accept alternative evidence for part of the claim, allowing 10%. The tribunal dismissed the appeal and found the allowance was not unreasonable. You can read the tribunal decision.
The practical lesson: A receipt is not automatically a valid VAT invoice. For supplies over £250, a full VAT invoice is generally required. If your business makes large or frequent repayment claims (for example, through export or arbitrage activity) check that your evidence shows the supply, VAT charged and payment before claiming. HMRC’s alternative evidence guidance describes a discretion, not an automatic substitute for a valid invoice.
Foy Wealth: a review notification can affect appeal timing
In Foy Wealth Ltd v HMRC [2026] UKFTT 1061 (TC), HMRC had compulsorily registered the company and raised a VAT assessment of £958,578 plus a £143,786 penalty. The company requested a statutory review but said it never received notification of the review’s conclusion.
The tribunal held that a deemed conclusion of a review is not itself a “conclusion date” under section 83G(7) of the VAT Act 1994. Without notification from HMRC, no conclusion date had occurred, the 30-day appeal period had never started, and the appeal filed in January 2026 was in time. The substantive appeal will now proceed, and it has not yet decided whether the company owed the assessed VAT or penalty. Note that this was a decision on the papers, so it does not bind other tribunals, and it is not a general rule that any unanswered HMRC correspondence keeps appeal rights open indefinitely.
The practical lesson: keep dated records of review requests and HMRC acknowledgements. If a conclusion letter appears to be missing from an old review, check the position before assuming an appeal deadline has passed. Read