The bosses of a number of the UK’s biggest e-retailers have joined forces to oppose proposals to introduce an online sales tax. In a letter to the chancellor they describe the suggestion as ‘nonsense’ and claim that it will choke innovation, jobs and growth.
The online tax has been proposed by several high street retailers as part of a wider overhaul of the business rates system. It has the support of Morrisons boss Dalton Phillips, Justin King of Sainsbury’s and Topshop’s Sir Philip Green.
Traditional bricks and mortar based retailers face the burden of business rates on town centre properties while their online competitors have the advantage of only having to cover the costs of far less expensive warehouses. The supporters of the sales tax argue that it will help to address this disparity.
Now the chiefs of Ocado, Shop Direct, Boden and N Brown have given their response, putting them on a collision course with the high street and provoking a call from the British Retail Consortium (BRC) to end the infighting.
The letter says; “Online is a rare and precious success story for the UK and one that we should take pride in.
“At a time when SMEs in these sectors are attempting to deliver innovation, growth and jobs, they should not be choked off by unintended consequences of an unfair tax.
“There is no logic to penalising companies that provide consumers with the convenience, efficiency and value online shopping offers.”
The row may be particularly troublesome for Morrisons and Ocado who have recently entered into a contract to launch an online service next year.
Dalton Phillips has said that the tax makes sense as more and more retailers are now trading online. Meanwhile Ocado’s Tim Steiner is on record as saying that commercial property based retailers should “shut more shops and stop moaning.”
The BRC has responded by saying that seeing parts of the retail sector in conflict is not in the interests of the industry. The consortium has called on them to end the disagreement and focus on reforming business rates instead.
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