Healey plans £1bn e-commerce crackdown to fund retail tax breaks
John Healey is preparing to announce a £1bn tax crackdown on online marketplaces like Amazon and Temu to fund tax cuts for high street shops. At the Budget later this month, the Chancellor is expected to make e-commerce platforms like Amazon, Ebay and Temu responsible for collecting tax owed by the sellers using their site, [...]
Chancellor John Healey is set to introduce a £1 billion tax crackdown on e-commerce platforms such as Amazon and Temu as part of a plan to fund tax cuts for traditional high street retailers. The new policy, which is expected to be announced during the upcoming Budget, will require these online marketplaces to collect Value Added Tax (VAT) for their sellers who generate more than £90,000 in annual revenue.
The Treasury aims to use the generated revenue to provide tax breaks to high street shops, a move that has been supported by retail industry leaders.
The proposed VAT collection requirement is designed to tackle concerns that foreign retailers are exploiting UK shell companies to avoid paying VAT. However, tax experts have urged Chancellor Healey to lower the revenue threshold to prevent exploitation. Dan Neidle, founder of Tax Policy Associates, stated that the government must go further and hold online marketplaces accountable for collecting the entire VAT owed on their platform sales. Otherwise, foreign sham companies will continue to exploit the current loopholes.
In recent months, retail bosses have pressed the government to address the soaring tax burden faced by high street businesses. They have highlighted business rates and employment costs as significant challenges. Notably, former Chancellor Andy Burnham had previously advocated for tax cuts on out-of-town warehouses, which he believed would help small retailers thrive. However, this idea faced strong opposition from industry leaders who warned that such a tax hike would ultimately lead to higher prices for consumers.
In a potential win for the retail sector, the Chancellor is now reportedly ruling out a warehouse tax. By prioritizing the enforcement of online VAT collection, Healey's proposal is expected to garner support from retail industry leaders. Amazon has welcomed the crackdown, estimating that it could raise approximately £700 million for the Treasury.
The company sees this move as a step towards closing a loophole and simplifying compliance for legitimate sellers. The Treasury has emphasized that tax decisions are ultimately the responsibility of the Chancellor, as outlined during fiscal events.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
