UK Treasury is looking to open a debate around online sales tax. This is due to the popularity of online shopping in correlation to the Covid 19 pandemic, which has also led to the closure of the high-street across the country. The UK Treasury and Officials are deciding to change the shift in the balance between online and physical shops, due to concerns surrounding the effect for communities, as more shops are closing down permanently. A high number of shops are closed as the repeated lockdown and the high number of online sales have hammered the retail sector, which has threatened to alter the landscape of towns and cities permanently after COVID-19 restrictions are more relaxed. Ministers believe that online tax would involve a new levy on online shopping, which could help build the collapse of the high street. Business groups like the British Retail Consortium, are against the measures, as it could result in a higher cost for shoppers at a time of severe weakness in the British Economy.
However, there are other retailers who are in favour of the online tax measure, such as Tesco, in order to redress the balance. Rishi Sunak, the chancellor, is also in favour of the move but would wait until autumn before launching a raid on internet firms like Amazon, Asos, and Ocado other than using 3 March budget. This development comes as the treasury has considered evidence from retailers as part of the fundamental review of business rates, the system of taxing industries based on the physical premises, they own, which is scheduled to settle this spring. With many shops facing closure and or have closed during the pandemic and lockdown, official figures have shown online shopping has increased by 46% in 2020 in comparison to earlier years. Online spending accounts for 30% of retail which is 20% higher than in 2020. Amazon sales rose by 51% in the previous year, (reaching (£19.4 bn) as people turn to the retailing agent to buy goods which are unavailable to them in the now-closed high streets. UK President of property at Altus Group (a consultancy firm), Robert Hayton said there was a need to address the disparity in taxes paid by retail firms with a physical store, than those which are operating mainly online.
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Submitted by Studioworx Marketing Team on 17/02/2021