Sunak's online sales tax has 'immediate appeal', says Halls

Sunak's online sales tax has 'immediate appeal', says Halls

Meryl Halls has said Rishi Sunak's reported interest in an online sales tax could benefit bricks and mortar retailers, who have historically been disadvantaged by internet shopping. 

The m.d of the Booksellers Association welcomed news that the chancellor is exploring of an online sales tax, to protect high street shops from competion from internet retailers, in addition to plans to replacing the business rates system, reported in both the Times and Guardian.  

The chancellor is said to be considering a levy of 2% on all items purchased online, estimated to raise £2bn a year, in addition to a tax on consumer deliveries. The deliveries tax is also part of a campaign to cut traffic pollution and congestion. 

The taxes are said by the Guardian to be being considered as a potential replacement for business rates, which sees companies pay a fee based on their premises' value. The Times has suggested business rates could instead be replaced by a “capital values tax”, based on the value of land and the buildings on it, with the tax set to be paid by the owner of the property rather than the business leasing it.

Halls said: “It is certainly good news that the chancellor is looking at ways to boost the high street and support bricks and mortar retailers, and finally to see the government take seriously the unfair advantages online retailers have historically enjoyed over their physical counterparts - a problem only amplified by the lockdown and COVID crisis."

"An online sales tax has a very immediate appeal, and handled appropriately could be part of a solution to level the playing field. It is, however, a complex issue and we hope that Rishi Sunak will consider evidence from across the retail landscape to ensure no unintended consequences are unleashed. The BA will be responding to the Chancellor’s call for evidence on behalf of our members – as we are on the Competition and Marketplace Authority’s Digital Task Force into online platforms, and working to ensure bookshops are represented as part of this vital debate.”

However, the British Retail Consortium, the leading retail lobby organisation has warned that the online tax will inflate prices for consumers, who may already be struggling as job losses rise. Speaking to the Guardian director of business and regulation at the BRC Tom Ironside said: “Taxing the sale or delivery of online goods would simply be another burden on an already overtaxed industry, one that would ultimately hit consumer spending through higher prices.

“Throughout the pandemic, many of us have been relying on retailers to ramp up their online services to ensure we can all get the goods we need. The government should not harm these efforts by further taxing the businesses providing these services, and the people they serve.”

The measures are part of the plans still being drafted to counter the financial debt of over £322bn, as the country faces a major recession. 

If implemented, the taxes would be likely to help direct consumers back towards bricks-and-mortar vendors. A recent Nielsen survey found approximately 35% of regular bookshop customers were tentative about returning to the high street as lockdown eases.