eBay UK urges protection for small businesses amid proposed VAT reforms

Chancellor John Healey is reportedly planning to reform how VAT is collected on online marketplaces as part of the upcoming UK Budget. The proposed changes would make online platforms responsible for collecting VAT for all retailers on their platforms with an annual turnover exceeding £90,000, regardless of the retailer's location.

The measure aims to prevent foreign firms from using shell companies to bypass tax rules and is expected to raise up to £1 billion. These funds could potentially be used to reduce business rates for physical high street stores.

Eve Williams, vice-president and general manager at eBay UK, stated that while the company supports ensuring overseas sellers meet tax obligations to provide a fair environment for domestic sellers, the government must ensure small UK businesses are not “unfairly” penalized. Williams noted that eBay has held discussions with the Treasury to ensure that tax thresholds do not inhibit business growth.