Online Sales Tax – a step closer?

High street retailers will be interested in the recent publication of an early-stage consultation that explores the argument for and against an Online Sales Tax. It is argued by the retail sector that business rates discriminate against the high street. The idea is to use any revenue from this tax to fund reductions in business rates for retailers with properties in England and to fund the block grants of the devolved administration so they can also fund rates reductions.

Addressing this issue, a recent Treasury news story states:

“As part of the three-month consultation stakeholders will be asked for their views on the challenges on the design of an Online Sales Tax, including which products and services would be in scope and whether it would be a flat-fee tax based on the number of transactions or deliveries, or a revenue-based tax.

“The consultation delves into what effect an Online Sales Tax would have on consumers and businesses alike, which will also be a key determining factor in policy decisions.”

Offer your point of view

Business owners of shop outlets or online sales facilities can offer their point of view by making a formal submission to the consultation. To access an online response form Google ‘Online Sales Tax: Policy Consultation’.

You could also submit your views on this issue by email to: or by post to:

Corporate Tax Team,

1 Yellow, HM Treasury,

1 Horse Guards Road,

London, SW1A 2HQ.

In an attempt to provide a rounded approach to the issue the government acknowledges:

“…that an array of business models operates in UK retail – a mark of the vibrant and innovative sector – and this will lead to a diverse range of opinions. Some retailers with a stronger bricks and mortar presence consider that their sector is overburdened by business rates relative to online competitors. Others view the growing market share of online retail as a signal of consumer choice and innovation which should not be subject to an increased tax burden. Many businesses operate both in-store and online. The government wants to review the evidence in the round.”

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