If you sell goods through a platform such as Amazon, eBay or Etsy, or run a takeaway using a food delivery app, HMRC is consulting on rules that could change who accounts for VAT on many marketplace sales. The consultation opened on 23 June 2026 and closes on 18 August 2026. It is a joint consultation between HMRC and HM Treasury, aimed at VAT non-compliance by UK businesses selling through online marketplaces.
The idea builds on rules introduced in 2021. Those made online marketplaces responsible for VAT on certain sales by overseas sellers, including low-value imports and goods located in the UK at the point of sale. The gap now is domestic. HMRC says tens of thousands of UK businesses trading through marketplaces may not be meeting their VAT obligations, costing hundreds of millions of pounds a year.
What is actually changing
At the moment, if you are a UK seller registered for VAT, you usually charge and account for VAT yourself. Under the proposal, the marketplace could account for VAT on business-to-consumer sales of goods made through that platform. That is a big shift in who holds and pays over the tax. It helps to understand how VAT works before you judge whether this affects you.
| Type of seller or sale | Position now | Proposed position |
|---|---|---|
| Overseas sellers | Marketplaces already account for VAT in certain cases | Broadly unchanged |
| VAT-registered UK sellers above the £90,000 threshold | Seller usually accounts for VAT | Marketplace could account for VAT on B2C platform sales |
| UK sellers below the threshold | Usually no VAT registration required | Depends on the final design, including any platform threshold or relief |
| Private non-business sellers | Outside the normal VAT system | No change, out of scope |
| UK business sales outside marketplaces | Seller accounts for VAT where registered | No proposed change |
The harder question is what happens to smaller sellers. HMRC is weighing 2 main options. One is a Minimum Platform Threshold, with the lead proposal set at £90,000 of sales per platform. The other is a special VAT rate relief for UK businesses below the VAT registration threshold. Either way, the stated aim is to avoid unnecessary impact on genuine small businesses that are not required to register for VAT. Knowing how VAT registration affects your pricing matters here.
Who this affects
The rules would affect UK businesses selling goods to consumers through an online marketplace. That includes physical goods on large platforms and, importantly, hot food sold through delivery apps. Restaurants, takeaways and fast food kitchens using those apps are specifically within the consultation audience.
Private individuals selling second-hand or unwanted items are not in scope. The government is also considering how the rules should apply to second-hand goods sold by UK businesses, because some VAT-registered sellers currently use the Second-hand Margin Scheme.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
Many marketplace sellers file their own sole trader tax returns, so getting the records right becomes more important as the VAT flow changes.
A worked example
Say you make candles and sell £120,000 a year through Etsy, comfortably over the VAT threshold. Today, you collect VAT from buyers and pay HMRC yourself. Under the proposal, Etsy could charge and account for VAT on those marketplace sales instead. Your headline price might not move, but your cash flow does, because you may no longer hold that VAT between sale and return payment.
For a below-threshold seller, the answer is less clear. If a relief applies, you may remain outside VAT in practical terms. If a platform threshold applies and you exceed it on a platform, the marketplace may need to apply VAT to those sales. This is exactly the sort of grey area where clear VAT return services save you guesswork.
What you can do now
Nothing is final. There is no start date yet, and draft legislation would follow only if the government proceeds. Still, a little groundwork helps. Check whether you are near or over the £90,000 VAT threshold. Make sure your marketplace data separates platform sales, direct website sales, exports, returns and fees.
Making Tax Digital for VAT already expects digital records, so avoid the common filing mistakes that trip people up when systems change. If HMRC ever queries your position, knowing how HMRC enquiries work takes the sting out of it.
You can respond to the HMRC consultation before 18 August 2026. If you employ kitchen, packing or warehouse staff, managed payroll keeps that side steady while you focus on the VAT question. Sellers across Slough and our Reading-based accountants office often ask us to sense-check this, which is part of what an accountant does day to day.
Frequently asked questions
Who is responsible for VAT on marketplace sales?
Today, marketplaces mainly account for VAT on certain overseas seller sales. The proposal would extend liability to many UK business sales through marketplaces.
Do I need to register for VAT to sell on Amazon or eBay?
Only if your taxable turnover goes over £90,000, or you expect to exceed it in the next 30 days. The proposal changes who accounts for VAT on some platform sales, not the registration threshold itself.
Will this affect food delivery apps?
Yes. Online takeaway food delivery platforms, and restaurants or takeaways using them, are specifically mentioned in the consultation.
When would the new rules start?
No start date has been set. The consultation closes on 18 August 2026, and legislation would come later if the government proceeds.
Talk it through before it lands
You have time to prepare, and getting your VAT position clear now beats reacting later. Speak to the Slough-based accountants at Asmat & Co and we will help you work out exactly what these changes could mean for your online sales. Get in touch today.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
