Government mulls online sales tax to counteract high-street hit

Written by Eleanor Langford on 28 July 2020 in News

Chancellor considers levy on internet sales


Credit: Adobe Stock

The government has confirmed it is considering a new tax on goods sold online in the wake of the “significant” hit to the high street from Covid-19.

On Monday morning, The Times reported that the chancellor was considering a levy on internet shopping to help bricks-and-mortar stores compete with online retailers. It comes after the Treasury highlighted concerns in a call for evidence last week that business rates were harming the high street because online rivals did not need to rent “high-value” properties.

A Number 10 spokesperson said: “Last week, as we set out in the Budget and manifesto, we published a call for evidence to look into all aspects of the business rates system.  And, as part of this, we will consider the case for introducing alternative taxes as part of the review, including an online sales tax. The pandemic has had a significant impact on how business is done and the effect of this will become clearer over time. We’ll continue to support businesses as far as possible but we must also ensure that the tax system raises sufficient revenue to fund our vital public services.”

Related content

According to The Times, other plans being considered include replacing business rates with a “capital values tax” which would be paid by the owner of a property instead of the business leasing it.

And, a set charge on consumer deliveries aimed at reducing congestion and encouraging high street shopping.

Businesses in the hospitality and leisure sector were given a one-year business rate holiday by the Chancellor during the height of the pandemic, which will reportedly cost £10bn and has led to a 40% drop in tax revenue from businesses rates.

The government is currently facing a hole in the public finances of more than £322bn as a result of the economic downturn and measures brought in to support the economy. 


About the author

Eleanor Langford is a reporter for PublicTechnology sister publication PoliticsHome, where this story first appeared. She tweets as @eleanormia.

Share this page




Please login to post a comment or register for a free account.

Related Articles

Cyber resilience and the public sector
28 October 2020

The public sector must focus not only on attacks, but on how it responds and recovers from them, Zerto and Cyber Security Scotland told attendees at the recent Local Government ICT Summit

Reform adviser Maude dismisses ‘myth’ of UK civil service supremacy
26 October 2020

Former Cabinet Office minister claims Whitehall has an ‘odd combination of insecurity and complacency’

Related Sponsored Articles

Reimagining Employee Engagement
13 October 2020

Studies have shown that an engaged employee is happier, more productive, and more committed to their job. So how can we encourage employee engagement? Trickle suggests innovative solutions ...