UK finance minister Healey to target online marketplaces in tax crackdown, The Times reports

UK to Hold Online Marketplaces Accountable for VAT in Tax Crackdown

Government Plans and Impact on Online Marketplaces

Oct 13 (Reuters) - Britain plans to make online marketplaces including Amazon, eBay and Temu responsible for collecting tax owed by retailers selling on their platforms, The Times reported on Tuesday.

Finance Minister John Healey is expected to announce the measure as part of a crackdown on foreign sellers that avoid value-added tax, a move expected to raise up to £1 billion ($1.33 billion) and help fund business rate cuts for physical stores, the newspaper said.

Background and Rationale for the Crackdown

Traditional Retailers' Concerns

• The move comes as traditional British retailers have stepped up calls for action against overseas online sellers, arguing that tax and customs loopholes give them an unfair advantage

Previous Announcements and Policy Changes

• Healey said in June Britain will scrap customs duty relief on low-value imports from October 2028 targeting a tax loophole that benefits online retailers ​such as China's Shein

Details of the Proposed VAT Collection Rules

Marketplace Responsibilities

• The Treasury declined to comment on The Times report, saying decisions on tax are a matter for Healey to set out at fiscal events. Amazon, eBay, and Temu did not immediately respond to requests for comment

• The newspaper said online marketplaces would be required to collect VAT at source for business sellers with annual turnover above £90,000

Expected Revenue and Industry Response

Financial Impact

• Amazon welcomed the proposal, according to The Times, and estimated the change could raise about £700 million for the Treasury

Alternative Measures Considered

• Ministers are understood to have looked at plans for a warehouse tax but rejected them, the report said

Next Steps and Timeline

• Healey, who took office in July, is due to deliver his first budget on October 28

Additional Information

($1 = 0.7545 pounds)

(Reporting by Natalia Bueno Rebolledo in Mexico City; Editing by Chris Reese and Lincoln Feast.)