John Healey ‘Targets Tax Crackdown on Online Marketplaces’ in First Budget
The chancellor is expected to announce a significant move in his first budget, aimed at online marketplaces like Amazon and eBay. According to a report, this crackdown could raise up to £1bn more for the Treasury.
The Guardian reports that John Healey is preparing to implement a policy making online marketplaces responsible for collecting tax owed by retailers selling on their platforms. Specifically, foreign retailers evading VAT on their sales due to a lack of robust rules and enforcement will be targeted.
The proposed plan includes making online marketplaces collect VAT at source for retailers on their platform with an annual turnover exceeding £90,000. This development comes as pressure mounts on Healey and Andy Burnham to offer relief to struggling high street businesses before the budget on 28 October.
Burnham, prior to his election in Makerfield, had pledged to increase the business rates threshold to exempt 140,000 small high street retailers from the tax.
However, as the government navigates various calls for tax cuts, the Institute for Fiscal Studies has warned Healey that his budget could be a "work of fiction" unless he outlines plans to cover £35bn in spending pressures. The IFS noted that higher inflation poses a challenge, requiring the chancellor to either bolster current government spending plans or implement deep real-terms cuts by the end of the decade.
In a positive development for the Treasury, the International Monetary Fund recently upgraded its UK GDP growth forecast for 2026 to 1.3%, a 0.3% increase from its previous July update.