VAT on online marketplace purchases

Good Afternoon, I'm not exactly sure if this is the right place for this thread / question, but I work for an organisation that does a lot of "odds and ends" purchases that we would primarily use online retailers for, including marketplace sites like Amazon. As we have to report our reverse charge VAT we've ran into an issue where some sellers (which are companies, not individuals) do not make clear if they have paid VAT. They have a GB VAT number, but either their address is the HMRC Ruby's House (which I understand is the holding address for new applicants) or seems to be an address that doesn't seem to exist (I don't know if it just because Google Maps isn't being accurate enough) but I'm not confident in the legitimacy of their operation. Having spoke to a support assistant for eBay, they suggested (although I'm not sure they understood my question) that eBay would only collect and ensure VAT is paid on imported products and if the company is not VAT registered . So, if a Chinese company ships it from a UK warehouse, a company like eBay would not pay the VAT as they would consider it a domestic sale (and thus the responsibility of the seller to account for VAT). I have a suspicion that these business maybe registering for VAT but not then paying it as there seems to be little information regarding the company when trying to search for it. My question therefore is how would we account for the VAT in this case? Would we consider it paid and reclaimable (although the lack of documentation would make that difficult) or would we have to consider it something we'd have to reverse charge? An additional question to this would be that if we don't feel we are getting the correct documentation in terms of VAT receipts/invoices/documents, do we have a responsibility to not engage in trade and what is the burden we have to ensure that the selling business is complying with VAT obligations? Thank you for your time.

Hi,

If an overseas seller is storing goods in the UK and is using a marketplace to facilitate the sales and makes a supply to a VAT registered business in the UK then the marketplace is not responsible for accounting for the VAT.

In this scenario you will provide your VAT number and the overseas company will need to charge you VAT on the sale.

Please see the following paragraph:

Online marketplace liability will not apply to business to business sales where the goods are in the UK at the point of sale. The business recipient will need to provide a valid UK VAT registration number to show that the supply is business to business sale. If this is not provided the sale should be treated as a business to consumer transaction. Where a valid VAT registration number is provided the supply will be from the overseas online marketplace seller, rather than the online marketplace, to the business recipient and will follow existing VAT rules. There will be no VAT reverse charge applied to this transaction.

Changes to VAT treatment of overseas goods sold to customers from 1 January 2021

As VAT is being charged on the sale they will have an obligation to provide you with a VAT invoice so that you can treat the VAT as your input tax:

16. VAT invoices

If you do not receive VAT invoices from overseas businesses in this scenario I would contact the businesses directly.

Thank you.