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General rules

Under the general rule contained in VATA 1994, s 5A, there is a deemed supply of the goods from the supplier to the online marketplace and then a further deemed supply of the same goods by the online marketplace to the customer. These deemed supplies ensure that VAT is collected in the UK on supplies of goods that take place in the UK by a business that is not established in the UK.

The rule is subject to a number of conditions:

1. Ìý

   •ÌýÌýÌýÌý the supplier must make a taxable supply of the goods in the course or furtherance of a business to a customer

2. Ìý

   •ÌýÌýÌýÌý the supply must be facilitated by an online marketplace and

3. Ìý

   •ÌýÌýÌýÌý either:

4. Ìý
   1. Ìý

      –ÌýÌýÌýÌý the 'imported consignment' condition is met or

   2. Ìý

      –ÌýÌýÌýÌý the supply of the goods to the customer does not involve the goods being imported but the supplier is established outside the UK

The 'imported consignment' condition is met where: