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Independent shops have written to the UK’s Chancellor of the Exchequer, Rishi Sunak, expressing their openness to the notion of an Online Sales Tax (OST), as a potential solution for funding a major reduction in business rates.
Crucially, the independent retailers – under the banner of the British Independent Retailers Association (Bira) – have been supported in this effort by bigger players in the retail sector, including the likes of the Sainsbury and Tesco supermarkets, and book chain Waterstones.
What have the retailers said about an OST?
As reported by Sky News, the above stores have formed a group called the Retail Jobs Alliance, which has urged Sunak to lower the tax burden on shops.
The new alliance, which also counts such household names as the Co-op Group, Morrisons and Kingfisher among its members, said it was writing on behalf of organisations employing over a million people – a third of the entire industry’s workforce.
The alliance stated that it would be “making the case for an overall cut in business rates for all retail premises, and we are open to the possibility of funding this through the introduction of a new Online Sales Tax (OST).”
There has been an intensifying debate in recent years about how an appropriate balance can be struck between the taxation of ‘high-street’ and online retailers, particularly given the trend for customers to increasingly look online for their shopping.
However, not every retail-sector player in the UK has expressed such openness to the prospect of an OST. The British Retail Consortium (BRC), for instance, has not been able to agree on a common position on such a tax, given that its wide membership includes Amazon, as well as other firms – such as John Lewis and Next – that have long been critical of the suggestion of an Internet shopping tax.
Meanwhile, independent retailers have long argued that business rates – which are calculated on the basis of historic market rents – are an outdated and cumbersome way of generating money. Online distribution centres based well away from city centres are subject to much lower business rates per square metre than the high-street stores that have struggled in recent years.
As we reported in February, the Government has published an open consultation on the idea of an Online Sales Tax, running until 20th May 2022.
Stay on the right side of the law and fulfil your tax responsibilities with our help
Retailers and sector bodies may differ in their exact stances on an Online Sales Tax, but one thing that remains certain is the importance of firms in this industry getting every last detail of their accounting and tax affairs right. After all, doing so could be a powerful aid to your business’s growth.
Enquire to our team today, and we would be pleased to discuss with you in greater depth the potential relevance of our accounting and tax compliance services in Plymouth, Wellington or Newton Abbot.
Our solutions could greatly help relieve some of your everyday tax and accounting burden, so that you can channel more imagination and energy into your core business.
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