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Measures to save high street

Hammond edging towards imposing online retailers’ tax

Philip Hammond

Philip Hammond: ‘We want to ensure that taxation is fair’


Chancellor Philip Hammond is edging closer towards an online retail tax as a measure to protect the struggling high street.

Mr Hammond has been considering the idea for some time but has given a firmer indication today that he may introduce a levy in his autumn Budget.

An issue has been the need for international competition to make it work, but Mr Hammond now says it is minded to take unilateral action and resolve overseas tax implications later.

“More and more of us are buying online. Indeed, Britain has the biggest percentage of online shopping of any major developed economy,” he said in a television interview. “That means the high street will change. We’re very clear that you have to support the high street through that process of change.

“The nature of the offer on the high street is going to change over time. There’s going to be less retail, more leisure, bars, community facilities.”

Daily Business last year called for a tax on online retailers and the idea has also gathered support locally, not least from Scottish Conservative finance spokesman Murdo Fraser.


Online retail call


The chancellor has resisted pressure to reform business rates (in England) in favour of a new set of taxes to tackle online businesses to level the playing field, a move that would not risk losing revenue by reducing rates paid by bricks and mortar retailers.

“We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online,” he said.

“That requires us to renegotiate international tax treaties because many of the big online businesses are international companies.

“If we can’t get international agreement to do this we may have to look at temporary tax measures to rebalance the playing field until we can get international agreements.”

Pressed on which kinds of measures, the chancellor said: “The EU has been talking about a tax on online platform businesses based on value generated.

“That’s certainly something we’d be prepared to consider.”

His comments on Sky TV came as department store House of Fraser was placed in administration, before being bought by sports retailer Mike Ashley.

A number of high street names have had to shut down in recent months, facing high costs and low sales numbers, prompting campaigners to warn of the death of the high street.


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