According to reports, online marketplaces will finally be made to collect VAT from overseas sellers on their sales to UK customers, from January 2021. The tax, hitherto avoided, is estimated to be as much as £1.5 billion a year and has enabled overseas businesses to sell their products at very heavily discounted rates, as many are also able to enjoy heavily subsidised postage costs.
British retailers have long argued for overseas online sellers to pay up and this move which places the responsibility for VAT collection with the likes of Amazon and eBay will see much fairer competition going forward. Amazon, in particular, has long been accused of avoiding liability for UK corporation tax on sales made in the country.
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