High Street retailers to call for “online sales tax”
The torpid dinosaurs of the High Street have cooked up a new way of trying to stifle the upstart ecommerce that has been so troublesome to them and their businesses in the past few years. The British Retail Consortium (BRC) is reportedly researching a proposal for government that will call for a new tax to be levied on online traders.
The BRC is said to think that online traders are at an advantage because they don’t have to pay any of the £7bn that bricks and mortar stores do in business rates for their High Street presence. Among the supporters of the plan are Justin King, chief of Supermarket chain Sainsbury’s. No details of the exact proposal are yet available. In particular, there is nothing to explain how “bricks and clicks” businesses (with both an online business and a physical outlet) will be affected.
The founders of Sofa.com have already hit out at the plans in a letter to the Chief Secretary of the Treasury, Danny Alexander saying that a tax on online retail would be “bad for consumers, business, and the UK”. Pat Reeves and Rohan Blacker said: “A tax, if imposed, could be a barrier to entrepreneurship, negatively impact small business, reduce consumer choice and hit at the heart of the UK’s world-leading online retail industry.”
We agree. Let’s be clear. Such a tax would be nothing but protectionism for businesses who have failed to innovate. Retail has changed dramatically in the past fifteen years or so and those who are complaining are likely the ones who have failed to adapt to the brave new world of ecommerce. It’s not as if trading online has come out of nowhere all of a sudden. Some High Street retailers, notably Argos and John Lewis, have surfed the trend and see ecommerce as an opportunity, not a threat.
The idea is also based on a false premise that betrays the primitive view of ecommerce that the crusty old British Retail Consortium clearly holds. Plenty of ecommerce businesses have premises, pay business rates and corporation tax just like High Street chains. Indeed, unlike some on our High Streets, these businesses are unlikely to be off-shored in Luxembourg to avoid VAT at 20% or using other cunning loopholes to avoid paying their fair share. Such business owners owners and staff will likely also be paying income tax and National Insurance.
Tamebay totally oppose a tax on online sales and we hope you’ll join us at the barricades if necessary. The old school retailers want to keep their golden goose for just a little bit longer and it’s up to us to tell them where to stick their tax on online trade.