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V3.268 Deemed supply of goods—supply to and by online marketplaces

As of IP completion day (11pm on 31 December 2020), a package of measures was introduced in relation to both imports of consignments of £135 or less and online marketplaces (OMPs). The cumulative effect of many of these measures is broadly summarised in V3.305.

One part of this package was the introduction of VATA 1994, s 5A¹ which provides for potential deemed supplies of goods both to and by OMPs. Broadly speaking, these deemed supplies arise where an OMP facilitates particular supplies of goods between a business and a customer. Where the provisions apply, the seller is deemed to supply the goods to the OMP and the OMP is deemed to supply the goods to the customer². The seller will generally not need to charge UK VAT on its supply to the OMP as it will either be zero-rated³ (to the extent it takes place in the UK) or outside the scope of UK VAT⁴