If you sell hair products, skincare, fashion, gifts or food through Amazon, eBay or a similar online marketplace, a story that broke on 14 October 2026 deserves ten minutes of your attention. According to a report in The Times, the Chancellor, John Healey, is considering making online marketplaces collect VAT on behalf of sellers with annual turnover above £90,000. The Treasury has not confirmed it. But with the Autumn Budget due on Wednesday 28 October, Black-owned businesses in Birmingham have a short window to understand what could be coming and get ready.
This is not a story about big overseas retailers alone. It touches the cash flow, bookkeeping and growth plans of the kind of micro and small businesses that make up so much of our community. And because Black founders already face a documented gap in access to finance, any change that squeezes cash flow lands harder on us. Here is what is known, what is not, and what to do now.
What Has Actually Been Reported
Let us separate fact from speculation, because headlines on Budget leaks can run ahead of reality.
- The report: The Times reported that the Chancellor is considering requiring online marketplaces such as Amazon and eBay to collect VAT at source from third-party sellers whose annual turnover is above £90,000.
- The money: The measure could raise up to £1 billion, and the revenue could potentially help fund business rates cuts for high street shops, although no link to business rates relief has been confirmed.
- The official line: A Treasury spokesperson said that decisions on tax are a matter for the Chancellor to set out at fiscal events. In other words, nothing is decided.
- The date: The Autumn Budget and the Office for Budget Responsibility forecast are due on 28 October 2026.
The consultation behind the headline
This did not come from nowhere. HMRC and the Treasury ran a consultation from 23 June to 18 August 2026 on extending marketplace VAT liability to UK businesses selling to consumers where the goods are in the UK. According to the accountants Sync Accountants’ summary of that consultation, your sale would be zero-rated to the marketplace, which would charge and account for the VAT. You would stop declaring output VAT on those sales, but could still recover input tax. Two softeners were floated: a minimum platform threshold, possibly £90,000 or lower, or relief for businesses below the VAT registration threshold. No decision has been published and no start date has been set.
Since 2021, marketplaces have already been liable for VAT on certain imported goods worth £135 or less and on goods held in the UK by overseas sellers. HMRC estimates that tens of thousands of UK-based marketplace businesses may not be meeting their VAT obligations, which is the gap this proposal aims to close. The consultation also noted a possible cash flow impact for sellers who currently account for their own VAT.
Why This Matters for Black-Owned Businesses
On paper, a rule aimed at businesses above £90,000 sounds like it leaves most small sellers alone. In practice, there are three reasons Black-owned businesses should pay attention.
1. Many of us are one good quarter away from the threshold
The VAT registration threshold is also £90,000, tested on a rolling 12-month basis or if you expect to exceed it in the next 30 days. A strong Christmas, a viral product or a big wholesale order can push you over faster than you expect. If you sell through marketplaces and your growth is accelerating, you may cross the line sooner than your accountant’s annual review would catch.
2. Cash flow is already tighter for us
Research from Channel 4’s The Good Side, reported in August 2026, found that 56% of Black-owned businesses receive funding only after they have already grown a successful business, compared with 35% of white business owners. If you have had to bootstrap, you may have little buffer for a change in how and when money reaches your bank account. The consultation itself acknowledged a possible cash flow impact on sellers, so how quickly a marketplace pays out after taking VAT at source matters more to a business without a cushion.
3. The funding gap leaves less room for error
The UK Business Angels Association, citing the Startup Coalition’s December 2025 report, says Black founders received just 1.6% of UK venture capital rounds over the past decade, and Black women just 0.14%. Founding teams from Black and other ethnically diverse backgrounds were also 10% less likely than all-white teams to have a contact they could ask for an introduction. When outside capital is scarce, we depend on our own trading income to fund stock, marketing and hiring. Anything that delays or complicates that income needs planning for.
There is also a broader squeeze. The CPA’s 14 October business round-up notes that markets are pricing a near-certain interest rate rise in November, and that higher borrowing costs can weaken customers’ cash buffers, making overdue invoices harder to collect. If you sell to other businesses as well as online, that matters too.
Could It Be Good News?
It is worth being balanced. Proposals like this are partly designed to level the playing field. If overseas sellers have been undercutting UK businesses by not charging VAT, a crackdown could help Birmingham sellers compete on fair terms. Marketplace VAT collection could also simplify life for some sellers by taking VAT accounting off their desk. And if the revenue does fund business rates relief for high street shops, that could help our community’s bricks-and-mortar businesses, from barbershops and salons to restaurants and boutiques. The honest answer is that the effect depends on the detail, which we will not have until the Budget at the earliest.
What to Do Before 28 October
You cannot change the policy, but you can make sure it does not catch you out. Work through these steps this week.
Know your numbers
- Split your turnover by channel. Work out how much of your sales come through each marketplace, your own website and in-person or wholesale.
- Check your taxable turnover against £90,000 on both the rolling 12-month test and the 30-day test.
- Find out whether you are VAT-registered and, if you are not but close, decide whether registering early would help you recover VAT on stock and equipment.
Protect your cash flow
- Build a simple 13-week cash flow forecast that assumes payouts could arrive later or smaller than today.
- Keep a VAT pot. If you are registered, set aside the VAT you collect so it never gets mixed up with working capital.
- Review your pricing. If VAT will be handled differently, check that your margins still work for each platform.
Tidy your records
- Use accounting software and reconcile your marketplace payouts monthly.
- Keep invoices for stock and shipping so you can recover input VAT if it applies to you.
- Check your Making Tax Digital start date if you are a sole trader or landlord, as the rules are expanding.
Diversify your sales channels
Relying on one marketplace is a risk even without tax changes. A simple website, social selling, pop-up stalls and local wholesale give you more control over your customer relationships and your cash. Black-owned markets and community events across the West Midlands are a useful way to test products face to face.
Where to Get Free Help
- Local business support. Business Growth West Midlands offers business support for companies in our region. Check its current offer.
- GOV.UK and HMRC. Check the VAT pages for the registration threshold and use HMRC’s webinars for sellers.
- An accountant. Many offer a free first conversation. Ask specifically about marketplace sales and the 28 October Budget.
- Our community. Someone in our Facebook group has almost certainly been through a VAT registration or a marketplace payout problem. Ask them.
What to Watch on Budget Day
On 28 October, listen for four things: whether the marketplace VAT measure is confirmed; the threshold that applies; the start date, since that decides how long you have to prepare; and any relief for smaller sellers. Also watch for changes to the business rates multiplier and any new support for small businesses, since Budget packages often include grants, reliefs or guarantee schemes that could help.
Conclusion
Nothing has been decided, and that is exactly why now is the time to prepare. For Black-owned online sellers in Birmingham, the sensible response is neither panic nor a shrug. Know where you stand against the £90,000 line, model your cash flow, tidy your records and speak to someone who can advise on your situation. The funding gap means we have less margin for surprises, but community knowledge is one of our biggest strengths. If you sell online, share what you learn, and ask what you do not know.
This article is general information, not tax advice. The proposals described are reported plans and consultation ideas, not law, and may change. Check GOV.UK or speak to a qualified adviser about your own circumstances.
Join the Conversation
Do you sell through Amazon, eBay, Etsy or another marketplace? How close are you to the £90,000 line, and what would you like to know before Budget Day? Join the Black Owned Birmingham Facebook group and let’s work it out together.
