New VAT rules for eBay and Amazon sellers
The Government has granted HMRC strong new powers to make sure that online sellers are paying the right level of tax.
The key changes force online marketplaces like Amazon and eBay to clampdown on online sellers that aren’t paying the right level of VAT.
First announced in the Chancellor’s Autumn Budget in 2017, the new rules took effect last week.
They are designed to create a fair playing field between businesses that abide by tax laws and UK and international companies that flout them.
Financial Secretary to the Treasury, Mel Stride, said: “Whilst the honest majority pay what they owe, some businesses that sell goods online to UK shoppers are failing to pay the correct amount of VAT.
“This behaviour unfairly undercuts businesses trading in the UK that play by the rules, abuses the trust of buyers, and deprives the government of significant revenue that funds vital public services.”
The Government argues that online marketplaces like Amazon and eBay have a responsibility to make sure fraud doesn’t happen on their sites.
New powers, known as ‘join-and-several liability’ (JSL) for online sellers make online marketplaces accountable for VAT fraud committed on their platforms.
If UK or overseas sellers are not paying the correct VAT when selling in the UK - and the sellers are not removed from the site following HMRC notice - then the marketplaces themselves will be pursued for future unpaid tax.
Online marketplaces are also now liable to pay VAT to HMRC when they knew or should have known that an overseas online seller should have been VAT-registered, but was not.
Cloud accountancy for eBay and Amazon sellers
Cloud accountancy software is a powerful tool for online sellers. It makes sure the financial side of the business is running smoothly, while ensuring compliance with HMRC rules.
Award-winning cloud accountancy packages like Xero and FreeAgent have lots of clever eBay and Amazon ‘add-ons’ that integrate seamlessly into the software, cutting out time-consuming processes.
The software allows you to track cash flow, perform bank reconciliations, manage payments, monitor store activity and much more.
Because the software is cloud-based, it means that you can access it anywhere, and on any device which is perfect for a lot of online sellers who need to be in constant connection.
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