UK finance minister Healey set to pay for budget giveaways without more borrowing, FT reports

John Healey, the Chancellor of the Exchequer, is reportedly planning a tax crackdown on online marketplaces like Amazon and eBay for his first budget. This move could potentially raise an additional £1 billion for the Treasury. The aim is to make these platforms responsible for collecting Value Added Tax (VAT) from retailers who sell through their websites.

The crackdown is seen as a way to target foreign retailers that have exploited lax rules and enforcement to avoid paying VAT on their sales. The proposed changes would affect businesses with an annual turnover of over £90,000. This strategy is expected to fund reductions in business rates for traditional high street shops. The timing of this announcement is crucial as there is growing pressure on Healey and his counterpart, Andy Burnham, to provide relief to struggling small businesses before the budget is due on October 28th.

The Institute for Fiscal Studies (IFS) has warned that the government's budget could be unrealistic unless it addresses the £35 billion in spending pressures. The IFS cautioned that the budget's success relies on Healey setting out detailed plans to cover these costs. On a positive note, the International Monetary Fund (IMF) has upgraded its growth forecast for the UK economy to 1.3% for this year, up from the previous estimate of 1.0%.

However, the IMF also cautioned Healey to stay on track with his efforts to improve the UK's public finances. The Treasury declined to comment on the rumors, stating that decisions on tax policy are the responsibility of the Chancellor.