UK tax crackdown: eBay and other marketplaces may soon have to collect sellers tax

UK finance minister John Healey is expected to announce a tax crackdown on online marketplaces, The Times reported on October 13. Under the plan, large marketplaces such as Amazon, eBay and Temu would be made responsible for collecting tax owed by the retailers selling on their platforms.

The move is expected to raise up to £1 billion for the UK Treasury. It mainly targets foreign sellers who use lax rules to avoid paying VAT on UK sales. The money would be used to cut business rates for high street shops.

This is not law yet. The Treasury declined to comment, saying tax decisions will be set out at fiscal events — likely at Healey’s first budget on October 28. Amazon, eBay and Temu did not respond. If it goes ahead, marketplaces could deduct VAT from sellers’ payouts before paying them. Sellers based outside the UK should watch for eBay’s official guidance on what this means for them.