VAT: supplies of zero-rated goods

HMRC has published updated guidance VAT and overseas goods sold to customers in the UK using online marketplaces confirming that, when goods are sold to a customer, the overseas seller will be considered to have made a zero-rated supply of the goods to the online marketplace – ie a deemed supply. The overseas seller does not have to issue invoices to the online marketplace for deemed supplies that are considered to be zero-rated.

The online marketplace will be liable to account for UK VAT on the sales made through its marketplace, unless the goods are for a business customer which provides its UK VAT registration number to the marketplace.

Overseas sellers who only make zero-rated deemed supplies are able to either:

• register for VAT if they are not already registered; or
• apply for exemption from registration for VAT.