Sales or excess profit taxes on online retailers will not bring back the British High Street, are unfair and should be replaced by increasing corporation tax, say leading tax and advisory firm Blick Rothenberg.
Mark Hart a partner at the firm and of retail said: “ There have calls for online retailers to be hit with a sales tax or excess profits tax as a means of levelling the playing field for traditional bricks and mortar retailers, but this is only a short-term measure to help fund pandemic costs.”
He added, “While there is a place for an on-line sales tax, setting this at 1 or 2% is not going to address the issue the critical issue for retail on the High Street.”
Mark said, “An online sales tax should be used as a short-term measure. What is needed is a long-term review of Local Government Funding and the rates system to address the structural changes that are affecting the retail sector.
“Traditional retailers are being hit because rateable values were set when retail property values were high, and this is now out of step with retail profits. Maintaining rates at this level will lead only to the closure of an ever-increasing number of stores in our High Street”
Mark added, “A fairer system would be increasing the rate of corporation tax to cover the loss in revenue from rates and then look at the mechanism of allocating this to local authorities coupled with a wholesale review of local government funding.”
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