UK Chancellor plans £1bn tax crackdown on online marketplaces

Chancellor John Healey is reportedly preparing a tax crackdown on major online marketplaces, such as Amazon, eBay, and Temu, which could generate up to £1 billion for the UK Treasury. The proposed measures would make these e-commerce platforms responsible for collecting Value Added Tax (VAT) at the source for third-party retailers with an annual turnover exceeding £90,000.

The initiative aims to target foreign retailers that have used loopholes to avoid paying standard VAT, thereby preventing them from undercutting domestic competitors. The revenue generated from this crackdown is expected to be used to fund cuts to business rates for physical high-street shops, providing relief to struggling brick-and-mortar retailers.

While tax experts have noted the move is a step in the right direction, some suggest further action is needed to ensure full compliance. Amazon has indicated support for the measure, estimating it could generate approximately £700 million. The Chancellor has opted against alternative proposals, such as taxing out-of-town warehouses, following concerns that such a move would increase consumer prices.