Chancellor John Healey is preparing to announce a £1bn tax crackdown on online marketplaces to fund tax cuts for high street shops. At the Budget later this month, e-commerce platforms such as Amazon, eBay, and Temu are expected to be made responsible for collecting tax owed by sellers using their sites, according to reports.
The Treasury plans to use the revenues from this policy to fund business rates cuts for high street retailers. This move aligns with a long-standing pledge by Andy Burnham.
The proposed crackdown aims to address concerns that foreign retailers are establishing UK shell companies to avoid paying VAT. Online marketplaces are set to become responsible for collecting VAT at source for sellers with annual revenues exceeding £90,000.
Amazon has indicated support for the crackdown, estimating it could raise approximately £700m for the Treasury, which is lower than the government's own estimates. An Amazon spokesman stated that "Closing this loophole will raise significant revenue for the exchequer and simplify compliance for both HMRC and legitimate sellers."
Healey has reportedly ruled out a warehouse tax, a proposal previously suggested by Burnham to fund tax breaks for small high street retailers. Retail bosses had opposed a warehouse tax, arguing it would increase costs for retailers and consumers.