Healey reportedly plans to make online marketplaces such as Amazon and eBay collect VAT from sellers above £90,000

The reported package touches three kinds of operator, and the sources support a different statement about each. Marketplaces would take on the collection duty, and sellers above £90,000 would have their VAT collected at the platform ^[1]. High street retailers would get business rates cuts paid for from the proceeds, according to the Times as relayed by City AM ^[3]. Retail bosses have named business rates and employment costs among their biggest burdens ^[8]; the package as reported addresses the first. The reports do not give a start date, the cost of the rates cut or what collection would cost sellers.

The yield is already disputed. Amazon estimated to the Times that the crackdown would raise about £700m, and City AM reported that this is lower than the government's own estimates ^[9]. The Guardian reported that the measure could raise up to £1bn ^[2]. Set against that ceiling, Amazon's figure is £300m, or 30%, lower ^[13][14]. Because the reports tie the proceeds to the rates cut, a yield nearer £700m would leave less to pay for Andy Burnham's pledge to exclude 140,000 small high street retailers from business rates ^[3][7].

Amazon, one of the marketplaces that would do the collecting, backs the plan. An Amazon spokesman said: "Closing this loophole will raise significant revenue for the exchequer and simplify compliance for both HMRC and legitimate sellers." ^[10] The sharper objection concerns the threshold. Dan Neidle, founder of Tax Policy Associates, told the Times: "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." ^[11] The Times reported that Healey will come under pressure to set the threshold lower ^[12].

The threshold is where that pressure falls, and a lower line has two effects. It would catch more of the foreign retailers setting up UK shell companies to avoid VAT, which is the stated target ^[6]. It would also bring more legitimate sellers under platform collection. The line is settled, if at all, at the Budget on 28 October ^[4]. Modelling both cases costs little this quarter. Waiting for the Budget text means learning which side of the line a business sits on after the decision is made.

Operators with large distribution estates face a separate question. Burnham had suggested raising tax on out-of-town warehouses to pay for the rates break, and retail bosses opposed it fiercely ^[15]. Industry leaders had warned it would push up costs for retailers using the warehouses and eventually prices for consumers ^[18]. Jason Tarry, executive chairman of John Lewis, said last week that a warehouse tax would "reveal a fundamental misunderstanding of how modern high streets work" ^[17]. The Chancellor is now said to have ruled it out ^[16]. A Treasury spokesperson said: "As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events." ^[5]