Since 2018, online marketplaces (such as eBay or Amazon) have been required to help tackle online VAT fraud. These measures, known as joint and several liability (JSL) for marketplaces aim to ensure that all businesses selling goods in the UK follow the same rules and pay the correct amount of VAT.

Legislation allows HMRC to hold the operator of an online marketplace jointly and severally liable for unpaid VAT where:

• An overseas seller operating on the marketplace should have registered for UK VAT and has failed to do so.
• The online marketplace knew or should have known that an overseas seller should be UK VAT registered.
• HMRC tells them that a seller operating in their marketplace is not meeting its VAT obligations.

HMRC’s guidance states that if you believe an overseas seller should be paying UK VAT, you should check:

• that they have a valid VAT Registration Number (VRN);
• the location of the seller;
• the location of the goods that will be sold by the seller;
• if the seller, or those directing the seller, have been removed from your online marketplace before;
• how quickly the seller is able to fulfil orders from UK customers;
• how the seller fulfils orders from UK customers; and
• if there’s any information that the seller, HMRC or a third party gives you that might indicate dishonest conduct or failure to meet their VAT obligations.