The Autumn Budget 2026, delivered by Chancellor John Healey on 28 October 2026, left the main rates of income tax, corporation tax and VAT unchanged. But for e-commerce businesses, the detail matters more than the headlines. The biggest change is a new rule that makes online marketplaces such as Amazon, eBay, Etsy and TikTok Shop collect VAT on sales by UK sellers from October 2027. Add higher wages, new mileage rates and changes to equipment tax relief, and many online sellers will need to rethink their cash flow and prices.
This guide explains what the Autumn Budget 2026 means for e-commerce, whether you sell on marketplaces, through your own Shopify or WooCommerce store, or both, and what to do before each change starts.
Key numbers at a glance
1. Marketplace VAT: the biggest change for online sellers
Since 2021, marketplaces have collected VAT on sales by overseas sellers. From October 2027, the same idea extends to UK sellers.
- Who is in scope: UK VAT-registered businesses selling goods to consumers through an online marketplace, where the goods are in the UK when they are sold. It also covers any other UK business selling more than £90,000 a year on a single platform.
- What is excluded: sales to other businesses, second-hand goods and personal sales of your own belongings.
- What happens: the marketplace, not you, collects and pays the VAT on those sales.
- What is still being decided: HMRC has published its consultation response, but some details, such as exactly how the accounting will work and how the Flat Rate Scheme will fit, will come in later rules.
2. Selling through your own website (Shopify or WooCommerce)
The marketplace rules apply only to sales made through online marketplaces. If customers buy through your own checkout, nothing changes in how you account for VAT: you still collect it and pay it with your VAT return.
- Your VAT stays with you until the return is due, so you keep that working capital, as you do now.
- E-invoicing from April 2029: VAT invoices will need to be electronic. The new rule is aimed at invoices between businesses. Receipts to shoppers are not the focus, so it matters most if you sell to trade or wholesale customers. A PDF invoice is not an e-invoice, so check that your store or accounting software will support the new format.
- VAT and PAYE by Direct Debit: from April 2029, VAT and PAYE will usually be paid by Direct Debit.
3. Staff and fulfilment costs
- Minimum wage: rises from £12.71 to £13.21 an hour (about 3.9%) for workers aged 21 and over from 1 April 2027. For people aged 18 to 20, it rises from £10.85 to £11.27.
- Employer National Insurance: stays at 15% on pay above £5,000 a year, and the Employment Allowance of up to £10,500 stays the same.
- Staff perks through payroll: from April 2027, tax on perks such as company cars must go through payroll instead of a P11D form.
4. Deliveries and mileage
- 55p a mile is now permanent for the first 10,000 business miles in your own car or van.
- Miles above 10,000 rise from 25p to 35p a mile from 6 April 2027.
- Who these rates are for: staff who use their own vehicle for work, and sole traders claiming for their own vehicle. They do not apply to company-owned delivery vans or to the fees you pay couriers, which are normal business costs.
5. Equipment, warehouse and tech spending
- First-year allowance up to 50%: from 1 January 2027, you can deduct 50% of the cost of certain new equipment in the first year, up from 40%. It does not cover cars or second-hand assets.
- Older equipment relief down to 12%: the yearly writing-down allowance on your main pool falls from 14% to 12%, from 1 April 2027 for companies and 6 April 2027 for sole traders and partnerships.
- The Annual Investment Allowance is unchanged: any business can still deduct the full cost of up to £1 million of qualifying equipment a year, and companies can still use full expensing on new equipment.
6. Business rates: help for the high street
From April 2027 in England, shops, pubs, cafés and other retail, hospitality and leisure properties with a rateable value of £18,000 or less will pay no business rates, with partial relief up to £21,000. About 70,000 more high street businesses will pay nothing.
7. Starting, growing and selling an online brand
- Testing a new idea: from 6 April 2027, you can earn up to £3,000 a year from a side business without paying tax, up from £1,000.
- Selling your business: from 6 April 2027, the lower 18% tax rate under Business Asset Disposal Relief applies only to the first £500,000 of lifetime gains, down from £1 million.
- Founders’ Relief (proposed): a new 10% rate on up to £10 million of gains for founders of fast-growing companies that pass strict tests. The details are still being finalised.
8. Also on the horizon
- Making Tax Digital: from April 2027, sole traders and landlords with income over £30,000 must keep digital records and send HMRC quarterly updates.
- Low-value imports: the customs duty relief on imports worth £135 or less is due to end by October 2028. If you import small parcels to sell, plan for duty on them.
Marketplace or own website: how the changes compare
| Change | Marketplace sellers | Own-website sellers |
|---|---|---|
| VAT on sales to consumers | Collected by the marketplace from October 2027 | You collect it and pay it with your VAT return, as now |
| Cash flow from VAT | VAT no longer passes through your account | You hold the VAT until your return is due |
| E-invoicing (April 2029) | Applies to your invoices to other businesses | Applies to your invoices to other businesses |
| Wages, mileage and equipment | Same rules for both | Same rules for both |
Practical scenarios
Scenario 1: A VAT-registered marketplace seller
Sophie sells homeware on Amazon and Etsy, with £400,000 of sales a year, and is VAT-registered.
The result: from October 2027, Amazon and Etsy will collect the VAT on her sales to consumers. That VAT will no longer sit in her account until her VAT return, so she should plan her cash flow now and consider monthly VAT returns to get VAT on her costs back sooner.
Scenario 2: A Shopify brand with trade customers
Tunde runs a skincare brand on Shopify and also supplies three salons.
The result: the marketplace rules do not apply to his website. From April 2029, his invoices to the salons will need to be electronic, so he should check his invoicing software well before then.
Scenario 3: A side business testing an idea
Grace sells handmade candles online in her spare time and earns £2,600 a year from it.
The result: from 6 April 2027, that income is under the £3,000 trading allowance, so she will pay no tax on it.
Frequently asked questions
Does the marketplace VAT change apply to Shopify or WooCommerce?
No. It applies to sales made through online marketplaces. Sales through your own website checkout are not covered, so you account for VAT on them as you do now.
Will I pay more VAT?
HMRC says the change does not increase anyone’s VAT bill. What changes is who collects it on marketplace sales, which affects your cash flow.
When does the marketplace change start?
October 2027. More detailed rules will follow before then.
Does e-invoicing apply to orders from shoppers?
The April 2029 rule is aimed at invoices between businesses. If you sell only to consumers, it is likely to matter less, but check HMRC’s guidance as it is published.
Related reading: How to Reduce Your Company’s Tax Bill Legally in the UK
Key takeaways
- From October 2027, marketplaces collect VAT on UK sellers’ sales to consumers. Plan for the cash-flow change now.
- Sales through your own website are not affected by the marketplace rules.
- Wages rise to £13.21 an hour from 1 April 2027, so review your fulfilment costs and prices.
- Most small sellers can still deduct the full cost of equipment through the Annual Investment Allowance.
- Check your invoicing software before e-invoicing starts in April 2029.
How Credora can help
We help UK businesses of all sizes and sectors, including online sellers, plan for changes like these:
- Check your position: we find out which changes affect your store, your staff and your VAT.
- Plan your cash flow: we model what the marketplace VAT change does to your cash and whether monthly VAT returns would help.
- Review your prices: we work out what higher wages and costs mean for your margins.
- Get your systems ready: we help you set up records and software for Making Tax Digital and e-invoicing.
- Plan ahead: as your part-time finance director (Fractional CFO), we build your budget and cash plan for 2027 to 2028.
Book a free 15-minute consultation and we will show you which changes affect your store, your cash flow and your prices.
Book your free consultationOr email us at enquiries@credoraconsulting.co.uk
General information, not financial or tax advice. This article reflects the Chancellor’s Budget announcements as at 28 October 2026. Some measures still need to pass into law, and details may change. Names and figures in the examples are illustrative. Please take advice on your own circumstances before acting.
Sources: HMRC, Extending VAT online marketplace liability (policy paper, 28 October 2026); GOV.UK, Reforming customs rules for low-value imports; Sync Accountants, Autumn Budget 2026 for online sellers; Accounting Stack, Business rates from April 2027: Budget 2026 reliefs explained; Lewis Silkin, Budget 2026: key employment tax points; Saffery, Autumn Budget 2026: key tax changes; HM Treasury, Budget 2026 documents.