Rishi Sunak considers online sales tax to save struggling high street

Rishi Sunak is reportedly considering a new tax on goods sold online, as concern grows about the potential collapse of the high street as Britain continues to relax retail and leisure restrictions.

According to The Times, the chancellor is examining think tank proposals for an online sales tax to provide a “sustainable and meaningful revenue source for the government” and help retailers compete.

The problem between online and in-store pricing has been prevalent in retail for several years, with some retailers struggling to bring customers in to store environments without providing discounts or experiences.

In a call for evidence published last week, the Treasury highlighted concerns that business rates were effectively penalising the high street because online rivals did not need to rent “high-value” properties.

The evidence said that the coronavirus crisis “has had a significant impact on how business is done”, imploring the government to act now to make sure that “the tax system raises sufficient revenue”.

Earlier this month, the chancellor revealed his “Summer Economic Update”, which granted a VAT cut for the hospitality industry – from 20% down to 5% – commencing 15 July, 2020, until 12 January, 2021.

The retail industry had not been included in the VAT cuts, leaving retailers disappointed in the lack of support for the high street.

Helen Dickinson, CEO of the British Retail Consortium (BRC), said: “It was disappointing that the chancellor did not extend this measure to the retail industry and the three million people it employs. It was a missed opportunity and we hope that the government will reconsider this ahead of the autumn budget.”