Review of 2021 liabilities on goods sold by overseas sellers to UK consumers via marketplaces
On 28 April 2025, the UK’s HMRC announced plans to review the January 2021 marketplace liabilities for import consignments not exceeding £135. These rules made the UK facilitating marketplace liable for charging and remitting VAT of their non-UK 3rd party sellers to UK consumers.
Foreign sellers circumventing UK marketplace VAT
The review – not a full public consultation – will focus on the avoidance of the 2021 rules by foreign sellers forming shell UK companies so they are treated as UK established. In other cases, non-UK sellers have been misappropriating the details of UK companies to avoid the marketplace charing VAT. They have used the UK VAT numbers of a range of unsuspecting businesses, and so the marketplace has not been obliged to charge VAT. The criminal seller then sells the goods without remitting any VAT.
The EU is looking at similarly tightening up anti-fraud measures on low-value consignment imports via marketplaces, including encouraging IOSS for marketplaces.
Building on significant compliance improvements
HMRC believes VAT compliance on sales of goods from overseas sellers improved significantly following the reforms. However, some compliance challenges remain, and the government will therefore explore, including through engagement with stakeholders, the merits and value of further reform to these rules.
See more in our UK VAT guide.
The above review process is part of the annual Spring tax update review, which proposes a wide range of tax compliance requirements and reporting.
