In an attempt to protect high street shops, Chancellor Rishi Sunak has proposed a potential 2% levy on online purchases.
In the wake of the COVID-19 lockdown, brick-and-mortar store closures and retail job losses have been steadily rising. This change is not surprising, as coronavirus has shifted the retail landscape causing consumers to lean towards online shopping rather than trips to the shops.
The levy would not only seek to encourage trips to the high street, but would also serve as a potential replacement for business rates which are a dwindling resource for the government as more businesses close their physical premises.
Sunak has proposed two types of tax for online retail, according to the Times, the first being a 2% levy on all goods bought online which could bring in around £2bn per year. The other considered tax would be applied to consumer deliveries which would also carry a benefit in cutting down on traffic and pollution.
Leading retail lobby groups, such as the British Retail Consortium, oppose the tax and the higher prices it would impose on consumers.
The tax would not only bring unfair consequences onto the consumer, but also onto online retailers who have been a crucial service in providing goods to the British public throughout the coronavirus crisis.
While a 2% tax might only mean an average increase of £56 per year for the average British household, the TaxPayers’ Alliance fears it would “hit the poorest and most vulnerable hardest, with deliveries being a lifeline for millions.”
The Treasury is due to make an announcement that could include these changes in the spring of 2021.
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