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Online sales tax proposal criticised

2024 business resolutions

In recent months the High Street retail industry has been lobbying for a more equitable tax system. In particular they want to see online traders charged a sales tax.

High Street retailers argue that online sellers can afford to drop their prices as they have much lower costs; for example they do not have to pay rates on retail premises. This allows the online businesses to make more profit, and capture a larger share of the market. A sales tax would help to level the playing field, increasing the prices charged by online sellers.

Alex Baldock, who recently became the boss of Shop Direct, the UK’s largest home delivery retailer, disagrees. He says:

“I don’t think [an online sales tax] is a good idea. If you tax businesses it should do three things: it should promote growth, promote jobs and be fair. An online sales tax fails on all three counts.” He added, “Whatever the reason is [for considering an online sales tax], it is misguided. I feel for people who pay rates, but it’s a business choice.”

No doubt the debate will continue. High Street retailers will likely continue their lobbying as long as they experience a steady leach of business to the online sector.

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