Chancellor John Healey is reportedly preparing an online marketplace tax crackdown for Healey's first budget that could raise up to £1 billion more for the Treasury. Healey is said to be preparing to make marketplaces such as Amazon and eBay responsible for collecting tax owed by retailers selling on those platforms. Online marketplaces would reportedly collect VAT at source for all retailers on their platforms with annual turnover above £90,000. The Times said the changes would target foreign retailers that have exploited weak rules and enforcement to avoid paying VAT on sales. The Times said Healey was expected to announce that the changes would fund business rates cuts for high street shops.
Pressure continues to grow on Andy Burnham and Healey to provide relief for struggling small high street businesses before the budget on 28 October. Before Burnham was elected in Makerfield, Burnham said Burnham would raise the business rates threshold so that 140,000 small high street retailers would not pay the tax.
The government faces calls from many factions to cut taxes. This week, the Institute for Fiscal Studies warned Healey that the budget risks being a "work of fiction" without plans to cover £35 billion in spending pressures. The institute said higher inflation would require Healey either to increase funding for current government spending plans or impose deep real-terms cuts by the end of the decade.
This week, the International Monetary Fund raised its forecast for UK GDP growth this year to 1.3%, up 0.3 percentage points from July. However, the IMF also cautioned that Healey should continue repairing the UK's public finances. IMF economic counsellor Silvana Tenreyro said the UK "stands out" among G7 countries for having a plan to narrow the UK's deficit.
A Treasury spokesperson said tax decisions are for the chancellor to announce at fiscal events. The spokesperson said the Treasury does not routinely comment on rumours, speculation or proposals.
UK Chancellor John Healey to Target Online Marketplaces in Tax Crackdown
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Summary
UK Chancellor John Healey is set to crack down on online marketplaces in his first budget, aiming to raise up to £1 billion for the Treasury. Platforms like Amazon and eBay would be required to collect VAT at source for foreign sellers with annual turnover above £90,000. The move is expected to fund business rates cuts for high street shops. With interest rates still a key concern for traders, this policy shift could impact altcoins to watch that are sensitive to fiscal changes.
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