UK anti-VAT fraud split payments on e-commerce

30 March 2017

The UK government has announced that it will hold a public consultation relating to the introduction of an anti-VAT fraud spilt payment system.

This measure will apply to e-commerce sales made by non-established suppliers to consumers in the UK. If brought in, this will mean that the UK consumer purchasing the goods will be required to pay the VAT element of their purchase directly to HMRC. The net amount will then be paid to the supplier in the normal way.

It is hoped that this measure will help to eliminate the growing problem of VAT fraud by non-established online sellers who are charging the VAT on these sales, but are not remitting this to HMRC.

In 2016, the UK introduced a range of other measures to try to deal with the problem of non-EU sellers failing to VAT register and charge VAT. Read our article which details the changes in full here.