By Kate Brown
Set up in April 2018, HMRC’s VAT compliance agreement aims to build collaborative relationships between HMRC and online marketplaces to prevent abuse of VAT rules. HMRC said that the agreement “goes beyond legal obligations, with online marketplaces committing to helping heir sellers understand their tax responsibilities and ensuring we have the information we need to take action against those who do not play by the rules”.
Since the launch, the three major online marketplaces Fruugo, Amazon and eBay are the first to sign up. However, HMRC is hoping they will be the first of many. A spokesperson for HMRC said that they were in talks with many online marketplaces and commented: “We welcome the commitment from those who have signed the agreement and encourage others to do the same”.
Overall, HMRC’s agreement can help online marketplaces play an effective role in educating third party businesses, based in the UK and overseas, about VAT compliance.
For more information on the VAT compliance scheme, click here.