Online marketplaces will collect VAT on UK sellers' sales from October 2027

From 1 October 2027, online marketplaces will be responsible for collecting VAT on sales by UK businesses. The Chancellor announced it in Budget 2026 on 28 October 2026. Until now, marketplaces have only had this job for overseas sellers.

This is one of the changes in the Autumn Budget 2026 VAT summary, which lists every VAT measure and its start date.

What changed?

The Budget 2026 document says: "Online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and any other UK business with a minimum annual sales threshold per platform of £90,000."

This extends the online marketplace liability rules brought in for overseas sellers in 2021. HMRC consulted on the change from 23 June to 18 August 2026 and published a summary of responses on Budget day.

The government says the money raised will go back to the high street through lower business rates.

Who this affects

UK businesses that sell goods through online marketplaces, in two groups.

• Every UK VAT-registered seller on a marketplace, whatever its sales on that platform.
• Any other UK business selling more than £90,000 a year through one platform. The test is per platform, not your total across all of them.

The Budget says the rules will not apply to:

• personal sales, such as clearing out your loft
• second-hand goods
• business-to-business sales

Who is caught: three examples

The £90,000 test is per platform, and it only matters if you are not VAT registered. These sellers are made up to show how the test works.

Seller B is not caught by the marketplace test. But £50,000 + £45,000 = £95,000 of sales in total. If those are taxable sales in the last 12 months, that is above the £90,000 VAT registration threshold, so Seller B may have to register for VAT anyway. Check with our VAT registration threshold guide.

What it means for you

The Budget gives the start date, who is in and who is out. It does not yet set out how sellers will report sales that a marketplace has taxed, or how the platform will pass on what it collects. HMRC has not published that detail yet, so do not change your VAT returns or prices now.

For a VAT-registered seller, the main change is who sends the VAT on marketplace sales to HMRC. For a seller who should have registered but has not, the platform will collect the VAT once its sales on that platform pass £90,000 a year.

What to do now

• Add up your sales per platform, not just in total. You need both figures: one for each marketplace test, and the total for the registration threshold.
• Check whether you should already be registered. You must register if your total taxable turnover for the last 12 months goes over £90,000, marketplace or not.
• Read the summary of responses on the consultation page for HMRC's view of the design.
• Diary 1 October 2027 and watch for HMRC guidance before then.

Our VAT deadline calculator works out return and payment dates for any VAT period.

What has not changed

• The VAT registration threshold stays at £90,000.
• The VAT rates. The Budget kept its commitment of no increase to the headline rate of VAT.
• Overseas sellers. Marketplaces already collect VAT for them under the 2021 rules.
• Selling your own things. The Budget says the policy "will not impact personal sales through marketplaces".

Source

Budget 2026, HM Treasury, 28 October 2026, chapter 7 "Policy Decisions", under "VAT online marketplace liability (OMPL)". The consultation and summary of responses are on GOV.UK.