HMRC Issues Guidance on Checking Online Marketplace Seller Locations

HMRC has published updated guidance to help online marketplace operators determine whether sellers using their platforms are established in the UK or overseas.  This is crucial for correctly applying VAT rules, as operators may be liable for VAT on goods sold by overseas businesses if the goods are located in the UK at the point of sale

The guidance outlines that operators must take “reasonable and appropriate” steps to verify a seller’s place of establishment.  While HMRC does not prescribe a fixed checklist, suggested checks include verifying UK business addresses, VAT registration details, Companies House records, and financial information indicating a UK presence.

Operators are advised to keep detailed records of the checks they perform, as HMRC may request evidence to confirm that all reasonable steps were taken.  Failure to do so could result in the operator being held liable for unpaid VAT.

This move reinforces HMRC’s focus on ensuring VAT compliance in the growing e-commerce sector and places greater responsibility on platforms to monitor their sellers’ tax status.