Online retailers have thrived during the coronavirus lockdown, with Amazon’s sales in Britain increasing by 51 percent last year to £19.5billion, as customers were unable to visit shops deemed non-essential for months.
Online retailers in the United Kingdom, including giants such as Amazon, might fall under a double tax raid also targeting profits made during the COVID-19 pandemic.
Treasury officials are reportedly mulling over plans for an online sales tax to, as they say, re-balance the scales of highly profitable online business and struggling High Street shops.
Chancellor of the Exchequer Rishi Sunak thinks the current taxation system is “killing the High Street”, according to the Daily Mail.
Treasury officials have summoned tech firms and retailers to a meeting this month to give their views on a new tax plan, the leaked emails seen by The Sunday Times revealed.
The tax could be introduced as part of a shake-up of business rates – a charge based on the rateable value of non-domestic properties in the UK.
Jesse Norman, financial secretary to the Treasury, told MPs this week that such a levy is a possibility as Chancellor Rishi Sunak tries to raise money to pay off the UK’s pandemic debt pile. Mr Norman did not give any detail about what an online sales tax might look like, but the idea was first suggested when the Treasury reviewed business rates in July.
The Confederation of British Industry earlier this week warned against a fresh tax burden on UK businesses.
“We don’t see now as the time to be increasing taxes”, CBI Chief Economist Rain Newton-Smith said. “You need to wait until one or two years after you’ve seen the trough in GDP when growth is back on a sustainable trajectory before really trying to think about either significant cuts in Government spending or significant increases in taxation”, he added.
The UK has entered into its third national lockdown in an effort to curb the spread after a fast-spreading variant of the coronavirus was discovered in December last year in China. Since the introduction of the measures, the country has seen increasing opposition.
In the past two months, the UK has surged ahead with its vaccination programme, with almost 11 million of its 67 million population receiving at least one dose as of Thursday — just half a million short of the European Union, with its 450 million inhabitants. That, on the other hand, has strengthened demands for an early end to the lockdown.