UK Budget introduces tax changes for marketplace sellers

The UK government has announced significant tax reforms targeting self-employed marketplace sellers to ensure a level playing field for high street retailers.

Starting in October 2027, online marketplaces such as Amazon and eBay will be responsible for collecting Value Added Tax (VAT) on sales made by UK-based businesses that exceed £90,000 in marketplace turnover. This measure aims to tackle persistent non-compliance and prevent domestic sellers from undercutting traditional retailers.

Additionally, from April 2029, changes to Income Tax payments will require taxpayers who currently make Payments on Account to make smaller, more frequent contributions throughout the year. This shift is intended to align tax payments more closely with when income is earned, helping taxpayers avoid large, unexpected bills and reducing the risk of tax debt.