The UK delays digital platform reporting requirements

The UK will introduce rules requiring digital platforms to report sales data from 1 January 2024. Platforms must collect data from that date. The first reports will be due at the end of January 2025.

HMRC says the extended deadline will give platforms time to prepare for the new rules. Authorities say they will engage with platforms before the regulations are implemented “to make sure they are implemented proportionately and effectively.”

In terms of the rules, digital platforms must report sales made by sellers using their platform. The UK rules are similar to legislation being introduced by EU lawmakers.  

When digital platforms are responsible for VAT

Under new e-commerce VAT rules, online marketplaces in both the UK and EU are themselves responsible for managing VAT on sales made through their platforms. 

The regulations are designed to reduce the possibility of VAT avoidance by online sellers. 

However, sellers that use online platforms may still benefit from VAT registration, in certain circumstances. Most basically, online marketplaces may request a valid VAT number as a requirement for using their platform. In addition, registering will offer benefits to some companies, such as facilitating the recovery of import VAT.

In addition, some businesses may sell online via their own website and through a digital platform.

In order to fully optimise VAT compliance and recovery, every e-commerce business needs to be thoroughly evaluated on a case-by-case basis. 

Get in touch with VAT IT’s expert VAT team for a careful assessment of your business’s VAT obligations. As the global VAT recovery leaders, we can identify opportunities to reclaim VAT and reduce the cost of doing business in the digital economy.