The government’s controversial plan to introduce a two per cent online sales tax has been floated again, according to ParcelHero.
The company’s head of consumer research David Jinks has said that the country’s army of online shoppers shouldn’t be forced to pay for the cost of the pandemic.
Chancellor Rishi Sunak has reportedly resurrected the plan which was first proposed by his predecessors Philip Hammond and Sajid Javid, to introduce a new tax on online sales.
Sunak is rumoured to be revisiting the issue in order to restore the government’s financial stability after it shelled out billions bailing businesses out during the course of the pandemic through furlough schemes.
The total cost of government spend on pandemic measures will be £370 billion, according to the National Audit Office.
“The Chancellor is in a fix. Rishi Sunak needs creative new ways to repair the Government’s finances, and the “Telegraph” reports that the Chancellor has dusted off the plans for an ecommerce tax,” Jinks said.
“These are plans, remember, that both his predecessors toyed with and then hastily put back in the box.
“A new two per cent tax on ecommerce sales, perhaps coupled with a new delivery tax, could raise up to £2 billion for the cash-strapped Chancellor.
“However, it will be Britain’s growing army of online shoppers who ultimately pay the tax.
“Supporters of the scheme claim it will level the playing field for High Street retailers struggling to pay Britain’s exorbitant business rates, which are the highest in Europe. In our view, that’s nonsense.
“Any high street retailer with any commercial sense also sells online.”
Jinks has also rubbished claims that the pandemic is the cause of the long-term collapse of the high street.
“It is Britain’s sky-high business rates that are the real cause of the long-term collapse of the High Street,” he added.
“A tax on online sales won’t save it. The emergency business rates discount for some retail, leisure and hospitality businesses currently stands at 66 per cent, but that ends next March.
‘The Treasury should stop dragging its heels and push forward with long-awaited plans to abolish business rates and replace them with a “capital values tax” that would be based on the value of land and the buildings on it. This tax would be paid by the owner of the property rather than the business leasing it.”