Amazon, eBay and other online marketplaces could become responsible for collecting VAT owed by sellers using their services. The Guardian, citing the Times, reports that the measure is being prepared for the UK Budget scheduled for 28 October 2026. The additional revenue would help fund tax cuts for bricks-and-mortar shops. For now, however, this is a reported proposal, not an announced change in the law.
According to the Guardian’s article published on 14 October, the proposal would cover sellers with annual turnover exceeding £90,000. Responsibility for collecting the tax would be assigned to the platforms through which they sell. That threshold is part of the reported plan; the reports do not mean a new obligation has been introduced for sellers.
The aim, according to the Guardian’s account of the Times report, would be to curb VAT avoidance by overseas sellers exploiting weaknesses in the rules and their enforcement. The estimate cited suggests the measure could bring in up to £1 billion in additional revenue for the UK Treasury. That is a projection, not the result of changes already implemented.
The money would reportedly fund cuts to business rates — the tax on properties used for business purposes — for bricks-and-mortar shops. The reports therefore link tighter VAT collection in online retail with easing the tax burden on high street premises.
The Treasury, the UK’s finance ministry, has not confirmed the reported measure. A spokesperson quoted by the Guardian said tax decisions are set out by the Chancellor of the Exchequer at fiscal events, and that the department does not routinely comment on rumours, speculation or proposals.
For businesses selling through online marketplaces, any Budget announcements and the details of the collection rules will therefore be crucial. The newspaper’s reference to 28 October is the date of the Budget presentation, not a date when changes would take effect. The reports specify neither a start date nor how the proposed measure would be implemented.
