Under measures announced in the 2026 Budget, online marketplaces will become responsible for collecting and paying VAT on qualifying sales made by UK businesses. While the changes are designed to create a fairer playing field for VAT-compliant sellers, they could have a significant impact on working capital and cash flow.
For businesses heavily reliant on marketplace sales, the shift could mean moving from paying VAT to HMRC to reclaiming it instead, potentially leaving more cash tied up while waiting for refunds.
Are you affected?
The new rules apply to your marketplace sales if your UK business either:
- is VAT-registered, in which case all your qualifying marketplace sales are covered, or
- sells more than £90,000 a year on that platform, even if you’re not VAT-registered.
The £90,000 threshold applies to each platform separately. The new rules don’t cover:
- business-to-business sales,
- second-hand goods, which you’ll keep charging VAT on in the usual way,
- personal sales, such as someone selling their own clothes or belongings.
If you’re not VAT-registered and sell under £90,000 on each platform, nothing changes for your marketplace sales. Your normal VAT registration obligations still apply, though: if your total turnover across all channels goes over £90,000, you still need to register.
Understand the new marketplace VAT rules
This update was prepared by Finerva, our tech and scale-up specialist team. You can read the full article on the Finerva website covering the changes and practical steps to help your business prepare for October 2027.
Award-winning chartered accountants offering tax, audit and advisory services.
