Healey plans £1bn online VAT crackdown for shops

Jared Kim · 2026-10-14T08:20:38.998Z

This VAT rule should finally give high street shops a fairer chance against overseas sellers who have been undercutting them on price.

Healey plans £1bn online VAT crackdown for shops — Photo: U.S. Secretary of Defense / Wikimedia Commons (Public domain)

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Chancellor John Healey is expected at the 28 October Budget to make online marketplaces including Amazon, eBay and Temu collect VAT at source from sellers with annual turnover above £90,000. The government estimates the measure could raise about £1 billion. What is contested: Amazon estimates approximately £700 million, lower than the government figure, while backing the move. Dan Neidle told The Times the threshold does not go far enough: "This is a step in the right direction but the Treasury needs to go further and make online marketplaces responsible for collecting every penny of VAT on the sales made on their platform. Unless that happens these Chinese sham companies will find just another way around the rules." A Treasury spokesperson declined to confirm the plans, saying tax decisions are for the chancellor at fiscal events rather than routinely commenting on rumour, speculation or proposals. Amazon said closing the loophole "will raise significant revenue for the exchequer and simplify compliance for both HMRC and legitimate sellers." Jason Tarry said last week a warehouse tax would reveal "a fundamental misunderstanding of how modern high streets work." The IFS warned of £35 billion in spending pressures; the IMF upgraded its UK 2026 growth forecast to 1.3%. Details remain for the Budget.