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VAT For On Line Traders

The current regime as regards VAT for online traders, is that where a trader in non-uk based, the online platforms (Amazon Ebay etc) are required to collect UK VAT on the sales made on their platforms.

The purpose of these rules is to prevent overseas traders having an unfair tax advantage over UK based traders.

Some overseas traders have attempted to evade these rules by using a UK address as evidence that they are UK based. In many cases the address used would be a ‘High volume address’ where hundreds and perhaps thousands of overseas traders are using the address.

HMRC have announced that they are going to be contacting traders using such addresses asking for proof that they are actually trading from the address. In the absence of such confirmation HMRC will instruct the platform companies to deduct UK VAT from the sales.