“The last thing we would want to see is retailers being hit by an online sales tax.”
That was the message from the head of the Cumbria Chamber of Commerce after department store chain M&S wrote to the Chancellor warning that an online sales tax would hurt the High Street.
Last Friday, the government concluded a three-month consultation on the introduction of an online sales tax.
Suzanne Caldwell, chief executive of the Cumbria Chamber of Commerce, said: “We understand M&S’ argument is that if businesses that operate both online and on the high street are hit with sales tax in online, they will reduce the less profitable parts of the business, such as high street stores.”
In 2020 M&S closed its department store in Barrow, followed by Brighthouse, Carphone Warehouse, Thorntons, River Island and Topshop.
READ MORE: https://www.nwemail.co.uk/news/18670828.calls-help-save-barrow-high-street-nearly-dozen-shops-close-past-year/
At the time, MP Simon Fell said local people should support independent businesses in Barrow.
Even independent businesses now often use e-commerce platforms such as Etsy. According to research by Growth Intelligence, more than 85,000 businesses across the UK launched online shops or joined online marketplaces in the first four months of the pandemic.
Ms Caldwell said: “It appears to be a push by M&S for businesses that take a hybrid approach (online and high street) to be treated differently than those that sell entirely online. It doesn’t seem unreasonable. ”
The Treasury has argued for the introduction of an online sales tax saying it would reduce business prices.
High Street retailers have to pay more in commercial rates as they are based on ownership. An e-commerce business that may have a small office or even operate from home has to pay much lower rates than a high street retailer.
The Treasury decided last year there was no need for a fundamental change, with the tax bringing in £25billion a year.
According to the consultation paper, a 1% online sales tax could bring in around £1 billion a year, helping to lower business prices in England.