Electronic Commerce: VAT
The question
To ask the Chancellor of the Exchequer, pursuant to the answer of 15 July 2026, to Question 16821, on Import Duty: Tax Allowances, whether the income from the VAT on overseas sellers is formally hypothecated; and through what mechanism will the revenue be used to reduce business rates.
Answered by Treasury
The Government has committed that revenue raised from extending the VAT online marketplace liability rules to domestic businesses will be reinvested into improvements to the business rates system.
While not formally hypothecated, the Government announced on 23rd July that revenue will be used to fund improvements such as a new 20% discount for pubs, social clubs and live music venues from April 2027.
The Government will set out further details at Budget 2026.
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