Online Sales Tax Early-Stage Consultation

The UK government has published an early-stage consultation to explore the arguments for and against an Online Sales Tax (OST). It follows concerns reported by businesses of a potential tax imbalance between in-store retailers and online.

Although there has been no decision as yet on whether to go ahead with the tax, the consultation aims to look at potential designs and impacts on consumers and businesses of its implementation.

The Government said that given the significant changes in the retail market and shift online, it is right to reassess the taxation of this sector.

Stakeholders are invited to give their views on the challenges on the design of an Online Sales Tax, including which products and services would be in scope and whether it would be a flat-fee tax based on the number of transactions or deliveries, or a revenue-based tax.

Emma McClarkin, Chief Executive of the British Beer & Pub Association, commented:“We welcome the Chancellor’s decision to open a consultation on Online Sales Tax which we have been calling for as part of fairer taxation review. Pubs currently overpay rates by £570million relative to their turnover and an urgent rebalancing is needed.

“Within our response we will be recommending the introduction of an Online Sales Tax explicitly used to reduce the burden of rates from physical properties, especially those ones that cannot shift to digital platforms, like the great British pub. We agree with the stated aim that this should not be a penalty on digital shopping, but rather a welcomed attempt at a fairer tax structure which recognises our modern economy.

“We urge the Government to support the sector’s recovery by tackling the unfair business rates system and continuing to reduce the punitive tax burden on our sector to ensure the sustainability of brewing and pubs, and help us regenerate our high streets, towns and villages up and down the country.”