Marketplace VAT for UK Sellers Is Coming in October 2027

In brief: marketplace VAT for UK sellers was confirmed in the Budget on 28 October 2026. From October 2027 (the Budget costings give 1 October 2027), online marketplaces such as Amazon are due to take over the VAT on goods sold by VAT-registered UK businesses, at any sales level. Unregistered UK businesses are caught once they sell more than £90,000 a year on one platform. Amazon hasn't yet said how it will apply the change.

Who the marketplace VAT for UK sellers rules cover

HMRC and HM Treasury consulted on the idea over the summer, as covered in HMRC's marketplace VAT consultation. Their response, published with the Budget, settles the main design points:

Question	Decision announced on 28 October 2026
VAT-registered UK sellers	In scope at any level of platform sales
UK sellers not registered for VAT	In scope only once annual sales on one platform pass £90,000
Overseas sellers	Not subject to the £90,000 threshold; already covered by the 2021 rules
Personal (non-business) sales	Out of scope
Second-hand goods	Excluded, so the margin scheme keeps working
Business-to-business sales	Excluded
VAT rate relief for small sellers	Dropped in favour of the threshold
Start	October 2027

The threshold doesn't alter when you must register for VAT. The Finance Bill 2026-27 will carry the main law, and secondary legislation in 2027 will fix the threshold and the start date, so details could still move.

A worked example

Illustrative figures. A seller who isn't VAT-registered sells £60,000 a year on Amazon and £35,000 through its own website.

• Amazon on its own: £60,000 is under the £90,000 platform threshold, so Amazon wouldn't account for VAT on those sales.
• Across every channel: £60,000 + £35,000 = £95,000, which is over the £90,000 registration threshold. That seller may already need to register, and once registered, all its qualifying Amazon sales would fall under the new rules regardless of value.

For a registered seller, the cash effect is the VAT on standard-rated sales. £18,000 a month of VAT-inclusive Amazon sales carries £18,000 ÷ 6 = £3,000 of VAT that would no longer pass through your payouts.

What it could mean for your bookkeeping

• Two VAT treatments in one business. Amazon consumer sales would leave your output VAT, while Amazon Business orders from business buyers, second-hand stock and other channels stay on your return. Your sales accounts and tax codes would need to keep them apart. The VAT return boxes guide shows where each sits today.
• Settlement lines you may recognise. Overseas sellers already see marketplace-collected VAT on their orders. How those lines are booked is set out in our guide to Amazon's facilitator VAT; expect Amazon to explain its own format before October 2027.
• Repayment returns. With less output VAT, the VAT on fees and stock could exceed what you owe. The government's answer to the cash-flow point is that affected businesses can ask HMRC for monthly VAT returns.
• Flat Rate Scheme users wait. The government says it needs more time to decide how the scheme will work alongside the new rules.
• Per-platform tracking. Unregistered sellers close to £90,000 on one marketplace should track yearly sales platform by platform. HMRC hasn't yet said how the year will be measured.

Do you need to do anything?

Not yet. Watch for the Finance Bill 2026-27, the 2027 regulations, HMRC's promised guidance and Amazon's own notice. Ask your accountant now whether monthly returns or a different VAT scheme would suit you from October 2027.

How TrueBooks helps

Today, TrueBooks picks out Marketplace Facilitator VAT orders and posts every settlement line to Xero with the right UK VAT. Each payout then matches the bank. See what lands in Xero.