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Independent stores ‘open’ to idea of ​​online sales tax

Independent retailers say they are "open to the possibility" of introducing an online sales tax to fund a major reduction in business rates.

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Independent retailers say they are “open to the possibility” of introducing an online sales tax to fund a major reduction in business rates.

The British Independent Retailers Association (Bira) is one of the signatories of a letter sent to Chancellor Rishi Sunak as part of The Retail Jobs Alliance, a new lobbying group of British retailers.

Most importantly, members of The Retail Jobs Alliance include such major players as supermarkets Tesco, Sainsbury’s, Co-op and Morrison, book chain Waterstones and takeaway baker Greggs. Among them, its members employ more than 1 million people – or one-third of the entire industry’s workforce, according to Sky News, which broke the story.

> See also: Small businesses may have to pay 2% online sales tax

Tesco has previously suggested that a 1 percent online sales tax could fund a 20 percent reduction in business rates for physical stores.

The sector’s biggest lobbyist The British Retail Consortium is unable to reach a common position on an internet shopping tax, as its wide membership includes Amazon, while other members, including John Lewis, Currys and Next, have long been opposed to ‘ an online charge.

Andrew Goodacre, CEO of Bira, told the Financial Times that digital sales tax was “a very divisive issue”.

“It is really difficult to find a position that pleases all your membership. “According to our surveys, the majority of members are in favor of an online sales tax that taxes large companies like Amazon more than it taxes them,” he told the newspaper.

> See also: Rishi Sunak looks at online sales tax for spring

Independent retailers have long complained that business rates, calculated on historical market rents, are an outdated, cumbersome and outdated way of raising money. Online distribution centers outside the town pay much lower business rates per square meter than struggling high street businesses.

In a normal year, taxes increase by about £ 25 billion in England, with devolved administrations in Scotland, Wales and Northern Ireland operating slightly different systems.

In February, the Treasury launched a consultation on the merits of an online sales tax in the wake of a business rate review that it said would save companies £ 7 billion. The treasury consultation closes on 22 May.

“While we have not made a decision on whether to impose such a tax, it is right that, given the growing consumer tendency to shop online, we are working with stakeholders to determine the appropriate tax on the retail sector,” Lucy Frazer, financial secretary of the Treasury, said at the time.

More about online sales tax

The government is considering extending 2% online sales tax to all small businesses

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