Retail plea

M&S urges Sunak to reject online sales tax plan

Shop going online
Many shops have closed and gone online in recent years (pic: Terry Murden)

Marks & Spencer has urged the Chancellor to reject plans for an online sales tax, arguing that it would do the high street more harm than good.

Eoin Tonge, the company’s chief financial officer, has written to Rishi Sunak saying an additional tax would simply see retailers respond by cutting the least profitable parts of a business “which in the case of multi-channel retailers, will more often than not be high street stores.”

His letter, seen by the BBC, is in response to a three-month Government consultation into an online sales tax to ease the business rates burden on high street stores. It closes on Friday.

Some big high street chains have called for such a tax because they say it is unfair that bricks and mortar retailers bear the burden of property taxes.

The Chancellor has acknowledged the difficulties in imposing an online tax because of the global nature of online business who are often based overseas or source products from other countries.

KPMG’s UK head of retail, Paul Martin, says there is a need to reconsider how the sector is taxed. He believes online and physical stores should be taxed in a completely integrated model.

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