Selling online: the VAT change for UK marketplace sellers in October 2027
By Oakridge Accounting · Updated 4 min readFigures for 2027/28
Announced in the Budget on 28 October 2026. Most of these measures still have to pass in the Finance Bill, so details could change. We'll update this guide when they do.
The short answer
- From 1 October 2027, online marketplaces will be responsible for collecting VAT on sales by UK businesses, not only overseas sellers.
- It covers UK VAT-registered sellers, and any other UK business with £90,000 or more of sales on that platform.
- It doesn't cover personal sales, second-hand goods or sales to other businesses.
- HMRC hasn't yet published how it will work in practice. We'll update this guide when it does.
- Nothing changes today.
What was announced
Since 2021, online marketplaces have had to account for VAT on sales by overseas sellers. In the Budget on 28 October 2026 the government announced it will extend those rules to UK businesses from 1 October 2027. The marketplace, not the seller, becomes responsible for collecting the VAT on the sale.
The Treasury says the aim is to stop UK sellers on marketplaces undercutting high street businesses that do pay the VAT they owe. The money raised is being used to reduce business rates for shops, pubs and other high street businesses.
Who is covered
- UK VAT-registered businesses selling through an online marketplace.
- Any other UK business with £90,000 or more of annual sales on a single platform.
The rules won't apply to personal sales, second-hand goods, or sales to other businesses.
What we don't know yet
- How the sales will appear on a seller's own VAT return.
- How marketplaces will report the VAT they collect, and what sellers will receive from them.
- How the £90,000 figure will work for smaller VAT-registered sellers.
- Which platforms are in scope.
HMRC will publish more before October 2027. This guide will be updated as soon as it does.
What to do now
- Make a note of which marketplaces you sell on and roughly how much you sell on each in a year.
- If you're close to £90,000 on any one platform, tell us.
- Keep your platform payout reports. They're what we use to keep your books and VAT accurate.
How we help
On our e-commerce package, your platform payouts, fees and refunds are recorded and reconciled as they come in, and your VAT return is prepared from those books each quarter. When the detail of the new rules is published, we'll tell you what changes in how your sales are reported.
Questions people ask
Does this apply if I sell on eBay or Vinted as a hobby?
Personal sales aren't covered by the new rules.
Does it apply to second-hand goods?
No. Second-hand goods are excluded.
Does it apply to sales to other businesses?
No. Business-to-business transactions are excluded.
I'm VAT registered but sell less than £90,000 on a platform. Does it apply to me?
The Budget says VAT-registered businesses are covered, and that other UK businesses are covered at £90,000 of sales per platform. We'll confirm how this works for smaller VAT-registered sellers when HMRC publishes the detail.
This guide is general information, not advice for your situation. Tax rules change and the right answer depends on your circumstances, so speak to us (or another qualified adviser) before acting on it.