UK Treasury explores online sales tax

The Treasury, the UK’s economic and finance ministry, is exploring options for an online sales tax. With this measure, it wants to shift the balance between spending online and in physical stores. British high streets are currently struggling due to the Covid-19 pandemic.

There’s a massive boost in ecommerce in the United Kingdom, which is, of course, nice for online shops, but not so good for physical retailers. The corona pandemic has accelerated the closure of retail outlets across the country.

‘Online sales tax would also hit omnichannel players’

This has led to the Treasury weighing the options to introduce an online sales tax.  The idea behind this plan is that levying taxes on online shopping could help stop the collapse of the British high street. But not everyone is looking forward to an ecommerce tax. The British Retail Consortium for example, says it would high omnichannel players and that it would result in higher costs for shoppers, at a time the British economy is already weak.

An online tax could help stop the collapse of retail.

Big retailers back the plan

A Treasury spokesman said: “We want to see thriving high streets, which is why we’ve spent tens of billions of pounds supporting shops throughout the pandemic and are supporting town centers through the changes online shopping brings. Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an online sales tax. We’re considering responses now.” According to The Guardian, several big retailers, including Tesco, are in favor of an online sales tax.

Last year, 46 percent more money was spent online in the United Kingdom compared with a year earlier. Ecommerce now accounts for about 30 percent of overall retail sales in the UK, up from about 20 percent a year ago.

Ecommerce accounts for 30% of UK’s retail sales.