Chancellor John Healey is reportedly planning a £1bn tax crackdown on online marketplaces including Amazon and eBay to fund business rates cuts for high-street shops.
Under proposals expected in his October 28 Budget, online platforms would become responsible for collecting VAT from sellers with annual turnover exceeding £90,000, closing loopholes exploited by overseas retailers to avoid tax and undercut British businesses.
The proceeds could help fund Prime Minister Andy Burnham’s pledge to exempt 140,000 small high-street businesses from rates, at an estimated cost of £880m.
The VAT crackdown would apply across the UK, including Scotland, but business rates are devolved, meaning any equivalent relief for Scottish retailers would be a decision for Holyrood.
If the English rates package generates Barnett consequentials, Scotland could receive additional funding, although ministers would not be obliged to spend it on business rates relief.
Responding to the reports, Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: “This would be a welcome move by the Chancellor, helping to level the playing field between online retailers and the high-street businesses that are the lifeblood of our towns and cities.
“If these proposals are delivered, the Scottish Government must follow suit by cutting business rates for shops and other businesses on Scotland’s high streets.
“Our retailers face the same pressures as those south of the border, and it would be unacceptable for Scottish businesses to find themselves at a further competitive disadvantage because ministers at Holyrood fail to act.
“Any additional funding flowing to Scotland as a result of these changes should be used to deliver meaningful rates relief, giving our high streets the support they desperately need.”