A battle is raging between major retailers over whether the UK should introduce an online sales tax, with Sensbury claiming that it will have the opposite effect of M&S when it claims to help revive struggling highways.
A day before the government’s three-month consultation on business tax changes ended, Censbury’s finance director reiterated a tax increase on digital retailers to reduce the business rates imposed on physical stores.
However, the head of finance at Marks & Spencer said an online sales tax would “punish” retailers who have worked hard to move to a modern way of selling and left less cash to invest in their high street estate.
Kevin O’Byrne, chief financial officer of Sainsbury’s, which owns Argos and Habitat as well as its supermarkets, said: We urgently need basic business rate reform.
“We urge the government to introduce an online sales tax that provides funding for business rate reductions for retailers of all sizes and creates a playing field between physical and online retailers.”
O’Byrne’s position in M&S contrasts with that of his opponent, Eoin Tonge, who said: “Far from flat, an online sales tax will lock us up. This will make it even harder for retailers.
“The solution we need is a practical, realistic reform of business rates and better taxation of players around the world so that everyone pays their fair share.”
In a letter to the Chancellor, quoted by the BBC, Tong said the imposition of an additional tax on retailers, which he said was “already an additional burden”, would “only retailers cut their clothes accordingly”.
“This rationale will always start with the least profitable part of a business – which, in the case of multi-channel retailers, will often not be a high street store,” the letter said.
M&S seems to be an outsider among retailers in this regard. Two weeks ago, Sensebury and rival supermarket chains Tesco, Co-op and Morrison, along with heavyweights in the sector, jointly called for a “retail job alliance” to reduce overall business rates for all premises, saying they were “open to the possibility” through an online sales tax. Can be financed.
The new group – which includes industry bodies representing Greggs, Waterstones, B&Q-owned Kingfisher, Union Usdaw and independent retailers and convenience stores – said an online tax would be leveled between Internet retailers and brick-and-mortar “to level the playing field.” Will help. The Mortar Store is at a time when Covid-19 has changed the way we shop online.
Coalition members employ more than one million people across the UK, representing one-third of all employment in the retail sector.