VAT – Split payment method for cross border e-commerce

The measure

HMRC are considering the introduction of a split payment model to reduce online VAT fraud by third country sellers and improve how VAT is collected on cross-border e-commerce. This measure should address the issue of overseas traders who fail to account for UK VAT when selling goods to consumers in the UK through online marketplaces. 


Who will be affected?

Non-EU businesses who are liable to account for VAT on sales to UK consumers.

An industry working group will be established to address some of the main challenges associated with this policy through close cooperation with stakeholders.


When will the measure come into effect?

Following the consultation launched at the Spring Statement 2018, the government will publish a response document on 7 November 2018. The proposed implementation date is not yet known.

Our view

The implementation of a split payment model will require a technological solution to tackle the non-payment of VAT but that also minimises any adverse impact on e-commerce activity.


Daniel Lyons

Daniel Lyons


Head of Tax Policy & Indirect Tax Policy Lead