Retailers to meet with government amid fears that online sales tax plans could be ditched

Amazon, Asda, Asos, JustEat and Currys are among those meeting with Treasury minister Lucy Frazer later this week to discuss concerns over whether the government is considering abandoning its plans for an online sales tax.

Sky News has reported that senior executives from some of the UK’s largest retailers will be holding talks with the financial secretary to the Treasury this Wednesday, amid industry fears that the government’s appetite to reform business rates and introduce an online sales tax is fading.

The retailers will be reiterating their belief that the business rates system needs a fundamental overhaul, including the introduction of an online sales tax.

The government consultation on online sales taxation closed last week, following a year-long debate about addressing the difference in taxation between physical and online retailers as consumers shift to digital channels.

It has been the subject of much controversy within the retail sector, with major names lending their support to both sides of the debate. This has sparked concerns that the government will use the disparity of opinion as an excuse to abandon the plan.

READ MORE: Asos, Currys and Gymshark hit back at
government’s online sales tax proposition

Those arguing for the online tax include Tesco, Sainsbury’s, The Co-op, Morrisons, Waterstones and Kingfisher – who have come together to form the Retail Jobs Alliance (RJA) – while John Lewis, M&S and Currys remain against the proposals.

The RJA, which launched last month, wrote to the chancellor Rishi Sunak to make the case for an overall cut in business rates for all retail premises, which its members believe can be fully funded by an online sales tax.

“A meaningful cut in the Shops Tax would make a big difference to retailers’ ability to invest more in the shops and stores that we know customers value, as well as to create jobs,” the letter read.

“This would make it easier for everyone in the retail sector to mitigate inflationary pressures, keep existing shops open and open new ones.”

Among those expected to attend Wednesday’s meeting are Tesco’s ceo Jason Tarry, Asos’ finance chief Matthew Dunn, Amazon’s UK country manager John Boumphrey and Curry’s chief executive Alex Baldock.

A Treasury spokesman said: “We have not decided whether to proceed with an online sales tax. The purpose of the recent consultation was to consider the design options and economic impacts of such a tax, and explore the arguments for and against.”

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