Under new rules that came into force last year, HMRC has the power to force overseas retailers to appoint a UK-based VAT representative or to provide a financial guarantee. These rules currently apply to overseas retailers that supply goods already in the UK at the point of sale, to UK consumers through an online marketplace (such as eBay or Amazon).If the overseas retailer fails to comply then the online marketplace and / or the UK-based VAT representative used by the overseas retailer can be held jointly and severally liable for unpaid VAT. This will only happen if and when the overseas trader does not comply with HMRC’s directions. HMRC will then put the online marketplace on notice that it may be liable for the VAT in respect of the overseas trader’s future sales through its marketplace.It was announced as part of the recent Budget measures that these rules are to be extended to make the online marketplaces jointly and severally liable for:Any future VAT that a UK business selling goods via the online marketplace fails to account for once they have been notified by HMRC. This extends the rules to UK registered businesses (in addition to existing rules for retailers based overseas).Any VAT that an overseas business selling goods via the online marketplace fails to account for where that online marketplace knew or should have known that that business should be registered for VAT in the UK.In addition, online marketplaces will also be required to display the VAT numbers of any sellers using their website and to check that the numbers are valid. These new rules will take effect from the date that the Finance Bill 2017-18 receives Royal Assent.