Marks and Spencer cautions on damage of online sales tax on High Street

Marks and Spencer has warned the Government that an online sales tax would do more harm than good for the high street.

In February, the Government launched a consultation into possibilities for an online sales tax to ease the business rates burden on high street stores.

In a letter to Chancellor Rishi Sunak, seen by the BBC, the chain’s Chief Financial Officer Eoin Tonge said: "Introducing an additional tax on retail, already overburdened, will simply mean retailers cut their cloth accordingly.

"This rationalisation will always start with the least profitable parts of a business, which, in the case of multi-channel retailers, will more often than not be high street stores."

He said that would not benefit high street stores, but cause them "damage". The Treasury has reportedly not yet decided if it will introduce the tax.

Chancellor Rishi Sunak promised the consultation at the Budget in October following businesses’ concerns of a potential tax imbalance between in-store retailers and those online.

Big name high-street shops had called for an online sales tax because they saw it as unfair that the bills for online-only retailers are far lower.