There have been some significant changes brought in to crack down on online tax avoidance. It is mainly due to online businesses evading the rules on VAT compliance. The policy is aimed to fix the estimated £1.2 billion loss of cross-border e-commerce VAT.

Because of this, HMRC are expecting to spend the huge sum of £16.6 million over the next 5 years to implement and operate the changes.

This has now become a huge burden for the government who is super focused on making online sellers take a proactive approach to ensuring that they are VAT compliant. The finance bill 2017-2018 will now account online marketplaces such as Amazon and eBay jointly and severally liable for any future VAT not calculated and charged correctly in the UK.

The bill will bring in some fresh changes which include:

  • Extending HMRC’s powers to hold online marketplaces jointly and severally liable for any unpaid future of VAT of traders (including UK traders) selling on their platforms.
  • An extension of HMRC’s powers is to hold online marketplaces jointly and severally liable for any unpaid VAT of non-UK traders that fail to account for VAT where the online market place knew or should have known that the business should be registered for VAT.
  • A requirement for online marketplaces to display the VAT numbers of all sellers and to ensure that VAT numbers displayed are valid.

Those who will be hit by this will be:

  1. Non UK businesses selling via online marketplaces to the UK.
  2. Online marketplaces
  3. UK Businesses

Non UK businesses who are targeted will be non UK businesses who are VAT registered and are not paying the correct VAT on all their sales. The online marketplaces are now going to be held responsible for this because it will be their obligation to ensure that those marketplace sellers are VAT compliant. The UK businesses also must be careful because if they surpass the UK VAT threshold and are not registered, it means that they will be non-compliant which could lead to major problems. UK businesses should avoid all issues by registering beforehand.

You can avoid all those issues and cover your back so that you are VAT compliant with Cross Border VAT!

Cross Border VAT is a software as a service (SAAS) which can be useful for keeping track of all your sales data and calculating your VAT automatically, in all the different currencies or cross border selling you do. Some businesses do this manually which can be a daunting task, or may pay someone an arm and a leg to do this. Cross Border VAT for an affordable price will calculate your VAT for all sales within the EU and will notify you when you are about to cross a VAT threshold in another country. There is no other software that can do that!

Ultimately Cross Border VAT will help take away the stress of your VAT obligations, and will allow you more time to focus on your everyday business needs.

With CBV we not only will ensure that your VAT compliant, but our software is an amazing way to track all your sales and VAT data as far back as 6 years. How do you know if you haven’t overpaid VAT?

You might even be owed money back!