If you sell through your own website and one or more marketplaces (Amazon, eBay, Etsy, or all three), VAT gets more confusing than it needs to be, mostly because the rules genuinely do work differently depending on the channel. Some of your VAT might already be handled for you. Some of it isn’t. And a government consultation that closed in August 2026 could shift where that line sits for UK-based sellers specifically. Here’s where things stand.
Your VAT registration threshold is per business, not per channel
This trips people up more than anything else: the £90,000 VAT registration threshold applies to your total taxable turnover across every sales channel combined (your own website, Amazon, eBay, Etsy, everywhere), not assessed separately per platform. If your own site turns over £50,000 and your Amazon shop turns over £45,000, you’re over the threshold on a combined £95,000, even though neither channel alone would trigger it. If you haven’t checked the mechanics of the threshold itself recently, our VAT registration thresholds guide covers the rolling test and the penalties for registering late in more detail than we’ll repeat here.
It’s a rolling 12-month test, not a tax-year test. HMRC looks at your total taxable turnover for any trailing 12-month period, not from April to April. Go over, and you must register within 30 days of the end of the month you crossed it, with your registration effective from the first day of the second month after. There’s also a “30-day forward-look” test: if you can see turnover is about to exceed £90,000 in the next 30 days alone, a big seasonal spike, for instance, you have to register straight away rather than waiting for the rolling 12-month figure to catch up.
When the marketplace handles VAT for you, and when it doesn’t
This is where a lot of confusion comes from, because the answer genuinely depends on who you are and where the goods are.
If you’re an overseas seller (based outside the UK) selling to UK customers through a marketplace, the platform is usually the “deemed supplier” and has to charge and account for UK VAT itself, in two situations: goods valued at £135 or less per consignment sold from overseas, or goods of any value that are already sitting in UK-based stock (in a fulfilment warehouse, say) at the point of sale. In both cases, the marketplace, not you, is legally responsible for that VAT.
If you’re a UK-established seller, none of that currently applies to you. You remain fully responsible for your own VAT on your marketplace sales, exactly as you would be for sales through your own website. The deemed-supplier rules were built to catch overseas sellers competing unfairly on price by not charging VAT, and as things stand today, they don’t reach UK sellers at all.
That gap is worth understanding properly, because it’s about to become the most relevant part of this topic for UK sellers specifically.
A change that could directly affect UK sellers
HMRC ran a consultation from 23 June to 18 August 2026, “Extending online marketplace liability to combat non-compliance,” proposing to close that gap and make marketplaces responsible for accounting for VAT on UK sellers’ sales too, not just overseas sellers’. The stated reasoning is that HMRC believes a meaningful number of UK-based marketplace sellers currently aren’t VAT-compliant, and shifting liability onto the platform is seen as a more effective way to fix that than chasing individual sellers.
Two protections for smaller businesses were floated as part of the same proposal. A “Minimum Platform Threshold,” with the government’s preferred option pegging it at the existing £90,000 VAT registration threshold, would leave sellers below it unaffected. Some form of VAT relief for UK sellers below that threshold was also floated. Nothing has been finalised, and no implementation date has been set. If you sell on marketplaces as a UK-established business, treat this as one to watch rather than one to act on yet; we’ll update this article once an outcome is published.
Why Amazon or Etsy might be asking for your National Insurance number
Since January 2024, UK digital platform reporting rules have required marketplaces (Amazon, eBay, Etsy, Vinted and others) to collect verified seller information (name, address, date of birth, and a National Insurance number or other tax ID) and report seller and transaction data to HMRC once a year, by the following 31 January. That’s why you may have been asked to confirm these details even if nothing about how you sell has changed.
Two things worth being clear on. Being reported doesn’t automatically mean you owe tax; it’s a data-matching exercise, not a tax charge in itself. And there’s a small-seller exclusion (broadly, under 30 sales and under roughly £1,700 in the calendar year) below which your details won’t be reported at all. If you’re a genuinely occasional seller clearing out personal items, this is unlikely to touch you. If you’re running an actual trading business through these platforms, it’s simply another data source HMRC now has to cross-check against what you’ve declared.
Keeping records straight across channels
VAT records need to be kept for at least six years, and if you’re VAT-registered, Making Tax Digital for VAT already applies to you regardless of your turnover. It’s been mandatory for every VAT-registered business since April 2022. In practice, once sales data from a marketplace has entered your MTD-compliant software, it needs to stay linked digitally rather than being retyped by hand between systems. That’s the main reason multi-channel sellers tend to move toward software that pulls marketplace sales in automatically instead of manual monthly entry.
It’s also worth keeping a clear reconciliation between VAT a marketplace has collected on your behalf (where deemed-supplier rules apply) and VAT you’re responsible for collecting yourself (your own website, and UK-seller marketplace sales as things stand today). They need to sit together in one VAT account, not be tracked as separate, disconnected books per channel.
Getting the setup right from the start
Multi-channel selling is exactly the kind of situation where a slightly wrong assumption, thinking a marketplace “handles the VAT” when it doesn’t, or checking turnover per-channel instead of combined, can go unnoticed for a while and then surface as a much bigger problem later. Our VAT and payroll service covers registration and returns, and our specialist e-commerce accounting service is there if you’re selling across multiple platforms and want the whole setup looked at properly. Get in touch and we’ll go through your actual channel mix with you.
Last reviewed: 29 September 2026. This is general guidance, not personalised advice. Rules and figures may have changed since publication, so please check with us before acting on it.
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