Online sales tax ‘won’t save a single shop’ warns campaigner

A leading retail expert has cautioned the government against introducing an online sales tax and warned it will not save struggling high street shops.

Bill Grimsey said the government needs to realise that high streets are evolving and ‘you simply can’t stop progress’.

His comments follow calls by the Tesco chief executive, Ken Murphy and other supermarkets like Morrisons and Asda for an online sales tax to ‘level the playing field’.

In a letter to the chancellor, the chief executives argue that rebalancing the tax system to ensure online retailers pay a fair share of tax would ‘be revenue-neutral, provide a vital boost to bricks and mortar retailers and support communities in need of levelling up’.

But Mr Grimsey, who last year wrote a report that called for communities to be given a say in how high streets are designed, was not convinced.

‘If government introduces an online sales tax and starts trying to clobber online giants like Amazon, it won’t save a single shop,’ said Mr Grimsey.

‘The Treasury needs to realise that high streets are evolving and they can’t save bricks and mortar retail by punishing online channels.

‘In years gone by, it would be comparable to trying to save the horse and cart by taxing cars or saving the red telephone box by taxing mobile phones.

‘You simply can’t stop progress and it’s foolish to try. Large numbers of people enjoy the convenience and ease of online shopping.

‘That’s not going to change and digital habits have hardened during lockdown. Government should not be using taxation to interfere with markets like this and they need to understand that high streets have to evolve and offer something different.’

Mr Grimsey added the real elephant in the room, which the government has ignored for years, is business rates

‘Business rates are a medieval tax and everyone knows they’re deeply unfair. But instead of grasping the nettle, ministers have continually buried their heads in the sand.

‘They can’t procrastinate any longer and need to replace this out of date with a sales tax that’s fair for everyone. If they do that then at least there will be a level playing field.’

It comes as the Federation of Small Businesses (FSB) has called on the government to extend business rate relief for the retail, hospitality and leisure sectors for another 12 months to April 2022.

It comes as the Federation of Small Businesses (FSB) has called on the government to extend business rate relief for the retail, hospitality and leisure sectors for another 12 months to April 2022.

‘For too long the business rates system has been outdated and regressive, and the ongoing pandemic has only highlighted the need for serious reform in the months ahead,’ said FSB national chair, Mike Cherry.

‘But over the past few months, many small firms have benefited from the retail hospitality and leisure relief which has helped to ensure businesses don’t go under and jobs are saved.

‘But with this due to end in April, and with the economic situation set to remain turbulent for many months to come, it is imperative that the government extends this rates relief.’

Photo Credit – Free-Photos (Pixabay)