LONDON — U.K. Chancellor John Healey has moved to crack down on a loophole exploited by overseas sellers to avoid paying VAT. “I will strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online,” Healey said in Wednesday's budget. Online marketplaces like Amazon, eBay and Temu will now be responsible for collecting tax owed by retailers. Previously, these marketplaces only had to collect VAT on behalf of overseas sellers and not domestic ones. Some overseas sellers then exploited this gap to avoid paying the tax by registering as U.K. based companies. The government launched an eight-week consultation into extending VAT online marketplace liability in June, after mounting pressure from retailers.
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