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Published on July 30th, 2020 | by The GC Team

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Online sales tax “a tax on the frail” says ecommerce delivery company

Reports that Chancellor Rishi Sunak is considering raising £2 billion a year with a new 2% online sales tax are, understandably, generating argument about the merits, or otherwise, of introducing such a tax in the UK (see previous story “Online sales tax would do little to save High Street” on this website.)

David Jinks MILT, head of consumer services at e-commerce delivery company ParcelHero, takes the view that a 2% levy on online sales, in addition to the previously reported mandatory charge on consumer deliveries, is simply unfair on the huge number of elderly or shielding people who have turned to online shopping for the first time during the pandemic,” and dubs it “a tax on the frail.”

Mr Sunak’s consideration of this tax appears to be, as he says himself, based upon creating “a sustainable and meaningful revenue source for the government,” to offset the cost of lost business rates as the coronavirus pandemic continues to bankrupt many High Street businesses.

David Jinks’ warning is that “home shoppers should not be duped into footing the bill for the impact of Covid 19. During lockdown, shoppers of all ages have turned to e-commerce so they can continue to shop safely from their own home. That is a sensible choice and consumers must not be punished for being wary of returning to shopping centres and crowded stores.

“The Government,” he adds, “is well aware many people have been driven to online shopping because of their concerns over the coronavirus, but it is prepared to make those people pay more to restore the Government’s coffers.

“There is no denying that High Street retail and, indeed, much of the entire economy is struggling, but certain sectors of e-commerce continue to thrive. The Chancellor’s response should be to encourage this one bright area of retail rather than impose steep new taxes on it. The result of this … will be that consumers simply stop spending their hard-won money online as well as in store. Then no one wins – not the High Street, not the Treasury and certainly not Britain’s consumers.

“The answer to the business rates problem is that the Treasury should stop dragging its heels and push forwards with its radical new plans to abolish business rates and replace them with a ‘capital values tax’ that would be based on the value of land and the buildings on it. This tax would be paid by the owner of the property rather than the business leasing it. Britain’s business rates are the highest in Europe and they cripple High Street retailers; tackling these will help bring life back to our beleaguered town centres far more effectively than a new online sales tax.

 “Let’s face it, most good retailers sell both in store and online. A new e-commerce tax would be robbing one side of a business to pay the other. Both the Government and retailers need better omnichannel retail strategies, embracing both shop and online sales, with both services complementing the other.”

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