Online sales tax missing from budget leaving retailers “waiting for details on Chancellor’s intentions”


Yesterday’s Spring Budget left out any mention of the highly anticipated online sales tax, leaving the retail industry “waiting for details on the Chancellor’s intentions”.

Chancellor Rishi Sunak’s announcement yesterday laid out some major support packages for the retail sector, including some significant changes to the way companies are taxed.

Despite this host of measures, Sunak omitted any mention of an upcoming ‘Amazon Tax’, which is understood to be under consideration by the UK government to level the playing field between ecommerce giants and high street retailers.

According to EY’s UK consumer leader Mona Bitar, businesses may have to wait until later in March before the government provides any clarity on its plans.

READ MORE: Asos, Boohoo and Ocado form landmark UK Digital Business Association to reshape the face of British retail

“The rumoured online sales tax did not appear in today’s Budget announcement, leaving the retail sector still waiting for details on the Chancellor’s intentions,” she said.

“As the sector navigates post-pandemic recovery, greater certainty is needed in this area. With tax consultations deferred until 23 March, the sector will be hoping for more information then.”

While many are hoping for clarity on Sunak’s plans, others are hoping the tax will be permanently omitted, seeing it as a misguided solution the physical retailers current struggles.

The newly formed UK Digital Business Association (UKBDA), which counts the UK’s leading online retailers including Ocado, Asos, Boohoo and AO World as founding members, said Sunak’s Budget measures “should be welcomed”.

“Although the country faces a huge fiscal challenge, the UKDBA believes the Chancellor’s budget has struck a good balance between fiscal responsibility without placing undue pressure upon hard-pressed consumers by imposing new consumption taxes,” it said in a statement.

Cas Paton, founder and chief executive of UK online marketplace OnBuy, also supported the Chancellor’s decision, stating: “I’m also pleased that the introduction of an ‘online sales tax’ has not come to fruition – a step which will allow Britain to further grow its own ecommerce industry, supporting our retail ecosystem and allowing us to compete on a global stage.”

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