Chancellor considers online sales tax to save the high street

Cabinet Reshuffle

Chancellor Rishi Sunak is considering a new tax on goods sold online as part of a move to save the high street.

Downing Street revealed the news which could be a 2% levy on online sales to raise £2bn a year, or a charge on deliveries which would cut congestion and emissions.

A Sky News report detailed how the move came after Rishi Sunak highlighted concerns that business rates are “effectively penalising high street stores and giving internet retailers an unfair advantage.”

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A spokesman for the prime minister said: “Last week, as we set out in the budget and manifesto, we published a call for evidence to look into all aspects of the business rates system. And as part of this we will consider the case for introducing alternative taxes as part of the review, including an online sales tax.

“The pandemic has had a significant impact on how business is done and the effect of this will become clearer over time.”

Adding: “We’ll continue to support businesses as far as possible, but we must also ensure that the tax system raises sufficient revenue to fund our vital public services.”

In its consultation document, the Treasury said: “Some commentators argue that the business rates system creates a distortion within the retail sector, favouring online retailers that can operate without the high-value properties that are a feature of more traditional retail.

“This has led to proposals that the government should levy a tax on companies based on their online sales, and that this could be used to fund business rates reductions for retail properties.”

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Alex Douglas

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