eBay UK chief warns Healey’s online VAT plan could unfairly hit small businesses
Eve Williams of eBay UK says any VAT reform must shield small retailers as the chancellor prepares to announce new online marketplace rules in the Budget.
By Felo News Desk · Published
Chancellor John Healey is set to announce in the upcoming Budget that online marketplaces will be required to collect VAT for all retailers on their platforms with an annual turnover above £90,000, regardless of where the sellers are based, according to two reports from the Independent.
What happened
The proposal would extend the existing rule that obliges platforms to collect VAT on sales by overseas sellers to UK consumers. Under the new plan, the responsibility would broaden to include any retailer on a marketplace that exceeds the £90,000 turnover threshold. The government estimates the change could raise up to £1 billion, which it intends to use to fund reductions in business rates for physical high‑street stores.
What the reports add
- The Independent notes that some foreign firms currently use shell companies to evade the existing VAT collection rule.
- Both articles stress that the expected revenue boost of £1 billion is earmarked for high‑street business‑rate relief.
- eBay’s own research, cited in the Independent, found that 31 of the 40 UK areas with the highest concentrations of eBay small‑business activity have a GDP per head below the national average, highlighting “hidden” high streets that could grow with the right support.
What was said
“We strongly support that we ensure overseas sellers meet their legal and tax obligations, because I want to make sure our domestic sellers in the UK get the fairest chance to succeed as well, and that any of these tax changes that are coming in definitely protect small UK businesses,”
Eve Williams, vice‑president and general manager of eBay UK, told the Press Association that the government must ensure any tax change “definitely” protects small UK businesses. She added, “Often, it is those really tight kinds of thresholds that inhibit people’s growth, and so thresholds around things like VAT, around national insurance for employees, that are the things that actually stop growth.” She said eBay had held discussions with the Treasury on how to protect growth and ensure small businesses were not “unfairly” affected by any tax crackdown. Williams also warned, “The Chancellor’s got a big challenge ahead to make sure they are taxing the right things, to make sure they’ve got the investment in place.”
How it came about
Healey’s push for new revenue sources follows recent tax proposals that have drawn business criticism, including his earlier plan to raise London office rates (Healey faces business pushback over proposed £1bn London office tax) and calls from city leaders to scrap a bank tax hike (City leaders urge Chancellor Healey to drop bank tax hike). The eBay warning adds to the broader debate over how the Labour government will fund its fiscal agenda.
Key facts
- Chancellor John Healey plans to require online marketplaces to collect VAT for retailers with turnover above £90,000. (independent.co.uk)
- The reform is projected to raise up to £1 billion for the Treasury. (independent.co.uk)
- Eve Williams of eBay UK said the change must protect small UK businesses. (independent.co.uk)
