Budget 2021: Retail chiefs disappointed after no decision on online sales tax
Retail bosses have said the Chancellor’s silence on an online sales tax in the Budget comes as “another blow” to the beleaguered high street.
While Rishi Sunak did not mention the mooted sales tax at the dispatch box, the autumn budget and spending review stated ministers will “continue to explore the arguments for and against” such a policy.
The Treasury document also stated the revenue from a UK-wide online sales tax “would be used to reduce business rates for retailers with properties in England and with the block grants of the Devolved Administrations increased in the usual way.”
The government said it would publish a consultation shortly.
This follows reports in the Daily Telegraph that work on an online sales tax had accelerated in recent weeks, with officials looking at what goods and services would be covered.
Brick-and-mortar businesses have called for a tax to level the playing field between tech giants such as Amazon and high street retailers.
Out of £7.9bn raised through retail business rates in 2019/20, just over 5 per cent was raised from online retailers. This was despite online firms representing around a quarter of sales.
The operator of the Westfield shopping malls, Unibail-Rodamco-Westfield, called on the Chancellor to take action to tackle big tech.
Unibail-Rodamco-Westfield’s UK chief operating officer, Scott Parsons, said: “The decision by the Chancellor to continue to avoid imposing any kind of tax on the e-commerce sector is another blow, as bricks and mortar retailers continue to operate on an uneven playing field.
“We challenge this government to be brave and smart enough to come up with a solution, so our high streets don’t have to shoulder virtually all of the tax burden for the retail industry and online pays its fair share.”