UK Chancellor of Exchequer Rishi Sunak has revealed plans to possibly introduce an online sales tax in the effort to help struggling high street shops.
With the public being locked in their houses for months due to COVID-19, it is no surprise that the demand for online shopping and deliveries has increased drastically with big retailers and restaurants being closed. As a result of this, many businesses have been struggling to sustain their costs with no source of income.
However, the treasury claim an introduction of a new tax could provide a “sustainable and meaningful revenue source”, adding that the introduction of the new tax would rebalance a system that currently favours online retailers that don’t have to pay costly rents, introducing a long term rather than short term stop gap measure.
With it being reported by The Times that the tax would be 2% raising £2 Billion a year for the treasury and could lead to a compulsory charge on online deliveries, it has led to many online shoppers fearing the inevitable higher prices and costs.
The director of business and regulation at trade body the British Retail Consortium, Tom Ironside, has said: “Taxing the sale or delivery of online goods would simply be another burden on an already overtaxed industry; one that would ultimately hit consumer spending through higher prices.”
Businesses and consumers have been given the date October 31st to respond to the treasury, with the final decision being made in Spring 2021.