How to record marketplace deemed supplies for VAT
Record qualifying sales as zero-rated deemed supplies to the marketplace and include their value in box 6 of your VAT return. Keep marketplace VAT, fees and settlement movements separate so the bank payout does not become your sales figure. Cambridge China Bridge helps buyers organise sourcing and shipment records.
Identify which sales belong in this ledger
This guide covers VAT-registered overseas sellers whose goods are held in Great Britain and sold through a marketplace to UK customers who have not provided a valid UK VAT registration number. For these sales, HMRC treats the seller as making a zero-rated supply to the marketplace when the goods are sold to the customer.
Separate these orders from direct sales and sales where the business customer provides a valid UK VAT registration number. The latter remain supplies by the overseas seller under existing VAT rules, without a reverse charge. Use who pays VAT on overseas sellers’ UK stock for the wider liability question.
Build a traceable zero-rated supply record
Create a dedicated ledger category for deemed supplies to marketplaces. As a practical record layout, capture the order reference, marketplace, sale date, stock location, customer VAT status, currency and supply value. Attach the marketplace transaction report and preserve its original field names alongside your accounting labels.
Keep the deemed supply value, customer-facing VAT and marketplace charges in separate fields. Ask your accountant to confirm how the platform’s reports identify the seller’s supply value before automating imports. A label such as tax withheld is a reason to investigate the entry, rather than enough information to choose its accounting treatment.
Report the supply value on the VAT return
HMRC says to include the value of these deemed supplies in box 6, the sales-value field of the VAT return. The overseas seller does not declare VAT on those deemed sales. Check that your accounting category includes the supply value in that field without generating output VAT for the seller.
Keep import VAT evidence in a separate file. HMRC allows recovery of import VAT incurred on the goods subject to normal deduction rules; marketplace VAT deductions do not replace that evidence. Use who is the importer of record when checking whose import documents you are collecting.
Reconcile orders, deductions and bank receipts
Start with the transaction report and match each order to its deemed supply record. Build a settlement bridge showing customer receipts, marketplace VAT, refunds, fees, reserves, reserve releases and other adjustments as separate lines. Follow the platform’s definitions so you do not subtract VAT again from a figure already shown excluding it.
Match the resulting settlement to the bank receipt, then explain differences using settlement references and dates. Do not use the bank payout alone to populate the sales ledger. Keep unmatched deductions in an exceptions list and ask the marketplace for an explanation before assigning them to sales, VAT or expenses.
Close the period with an evidence pack
Give your accountant the deemed supply ledger, source transaction reports, settlement reconciliations, fee documents and unresolved exceptions. Ask them to check the reporting period, supply-value mapping and treatment of each charge. Flag business-customer orders separately so their VAT treatment is reviewed rather than copied from consumer orders.
Retain links between original orders, refunds and later settlement adjustments. For the separate question of how returns affect VAT, use adjusting VAT on overseas goods returns. Agree who will investigate missing platform records before the next reporting cycle.
Frequently asked questions
Which VAT return box covers deemed marketplace supplies?
HMRC says to show the value in box 6. The overseas seller does not declare VAT on those qualifying deemed sales.
Can I record only the marketplace bank payout?
Use the transaction and settlement reports to build the sales record. A payout combines deductions and settlement movements, so retain a reconciliation to the bank receipt.
Does marketplace VAT replace my import VAT records?
Keep them separate. Import VAT recovery remains subject to normal deduction rules; retain the import evidence independently of marketplace deductions.
What if the customer provides a UK VAT number?
Where a valid UK VAT registration number is provided, UK-held goods remain a supply by the overseas seller under existing VAT rules. There is no reverse charge on that transaction.