A tax crackdown on online marketplaces such as Amazon and eBay could raise up to £1 billion more for the Treasury, according to reports regarding John Healey's first budget. The Chancellor is reportedly preparing to announce that online marketplaces will be responsible for collecting tax owed by retailers selling on their platforms.

Context

This move aims to target foreign retailers who have exploited a lack of robust rules and enforcement to avoid paying VAT on their sales. The Times reported that Healey is expected to use the revenue generated from this tax to fund cuts to business rates for high street shops.

Key Details

  • Online marketplaces will be responsible for collecting VAT at source for all retailers on their platform with an annual turnover exceeding £90,000.
  • The announcement comes as pressure mounts on Andy Burnham and Healey to provide relief to struggling small businesses on the high street ahead of the budget on 28 October.
  • Before his election in Makerfield, Burnham promised to increase the threshold for business rates, benefiting 140,000 small high street retailers.