UK Budget countdown: prepare for a possible marketplace VAT shift
In June, HMRC and HM Treasury consulted on extending online marketplace VAT liability to certain UK-based businesses. The proposal would cover qualifying business-to-consumer sales of goods through online marketplaces where the goods are in the UK when sold. It also discusses sales through food delivery platforms.
Under the proposed model, a marketplace would account for VAT on covered sales instead of the seller. The government is considering safeguards for smaller sellers, including a minimum platform threshold or VAT-rate relief. Neither the final design nor implementation date is confirmed. The consultation says responses must be considered before changes are confirmed and that any legislation would be subject to a technical consultation.
The existing £90,000 UK VAT registration threshold has not been abolished. The consultation itself considers how to protect businesses that are not required to register. However, if a seller’s marketplace sales were brought into a deemed-supplier regime, the platform could account for VAT on those sales even where the seller was below the threshold, depending on the final rules and safeguards.
The consultation says individuals selling personal second-hand items outside a business are not in scope. The treatment of second-hand goods sold by businesses remains under consideration.
The government’s consultation document and factsheet set out the proposal. They cite potential VAT non-compliance worth hundreds of millions of pounds annually; do not treat reported revenue estimates as a confirmed policy outcome.
Take these steps before Budget day
- Map your sales channels. Identify which sales run through Amazon, eBay, Etsy, food delivery platforms or other marketplaces. Keep direct website sales separate. Using Shopify as a storefront does not, by itself, mean a sale is covered by the proposal.
- Recheck your VAT position. Track taxable turnover against the current £90,000 registration threshold. Do not assume marketplace sales will remove your registration obligations.
- Model your margins. Test what happens if a platform collects VAT, changes settlement statements or alters how your selling price appears to customers. A seller’s cash flow may change even if the consumer-facing price does not.
- Reconcile platform reports. Make sure your records distinguish gross customer receipts, platform fees, refunds, VAT collected and direct sales. Accurate reconciliations will support your VAT return and year-end accounts.
- Keep your pricing flexible. Avoid making irreversible pricing changes before the final rules and platform implementation details are known.
A marketplace may collect VAT on covered transactions, but you will still need reliable records for your other sales, purchases and input VAT. Businesses using vat return services uk providers should ensure marketplace statements can be reconciled with accounting records as the policy develops.
HMRC’s cryptoasset guidance: classify the supply, not the token
On 15 October, HMRC published Guidelines for Compliance GfC21. Its central message is practical: there is no separate VAT regime just because a transaction involves a cryptoasset. The VAT treatment depends on the underlying goods or services, the customer and the transaction structure.
An exchange service involving crypto and traditional currency may qualify for the financial-services exemption, consistent with the CJEU’s Hedqvist judgment. But do not assume every crypto exchange, platform fee or related service is exempt. The legal and commercial details matter. HMRC’s guidance also makes clear that a platform facilitating third-party digital-service sales may be responsible for accounting for VAT unless it meets specific conditions around identifying the supplier, invoices, payment authorisation, delivery and sale terms.
Staking services need the same careful analysis. A paid provider’s service is not automatically exempt just because the customer stakes tokens. Identify what the provider supplies and assess its VAT treatment on those facts.
Example: A UK digital business sells tokenised artwork to consumers through a platform. The token and blockchain record alone may not establish the customer’s location or whether the buyer is a business. The seller or platform needs appropriate information to determine where VAT is due and who must account for it.
Strengthen crypto transaction records
- Record the customer’s identity, business or consumer status, and location.
- Keep the sterling value of each transaction at the time of supply, alongside the crypto amount and transaction timestamp.
- Save contracts, invoices, platform terms and evidence of who controls checkout, payment and delivery.
- Reconcile blockchain and exchange data to your accounting ledger so VAT calculations can be supported.
HMRC says insufficient customer and transaction evidence can lead to incorrect VAT declarations, adjustments, interest and penalties. Review GfC21 alongside the relevant HMRC cryptoassets manual.
EU anti-fraud extension remains a proposal
On 9 October, the European Commission announced a proposal to extend two VAT anti-fraud tools until 30 June 2030: the optional reverse-charge mechanism and the Quick Reaction Mechanism. The Commission says the tools would remain available while wider VAT in the Digital Age (ViDA) changes are prepared.
The reverse charge can shift responsibility for accounting for VAT from seller to buyer in specified circumstances. The Quick Reaction Mechanism gives Member States a route to respond to sudden and significant fraud in other sectors, subject to conditions.
The proposal now needs Council discussion. It is not yet an adopted extension, so businesses should not alter invoices or VAT returns solely on the basis of the announcement. Read the Commission’s update and keep monitoring national guidance.
E-invoicing watch: Spain, Ireland and Bulgaria
Digital reporting schedules are advancing, but the legal status and timing vary by country.
- Spain: The Spanish Tax Agency explains that its mandatory B2B e-invoicing regime is being rolled out through the Verifactu system and the Reglamento de facturación. Businesses should confirm their obligations against the official schedule, as requirements and readiness dates apply differently depending on company size and systems.
- Ireland: Revenue has been progressing its move toward mandatory e-invoicing in line with EU rules. Track published guidance for scope and start dates before changing your invoicing processes.
- Bulgaria: Bulgaria has been advancing mandatory B2B e-invoicing through its national system. Confirm the current requirements and transitional arrangements with official sources before relying on any implementation date.
Across all three jurisdictions, the practical message is the same: validate the legal status and applicable dates for your business with official guidance, and test your invoicing and reporting systems before deadlines bite.
