Chancellor Rishi Sunak is reportedly considering controversial plans to level the playing field between high street and online costs by introducing a new sales tax.
The plan follows calls last week from 18 high street retail bosses, including the heads of Tesco, Morrisons, Asda and Waterstones, to ensure online businesses pay similar tax to physical store sellers.
However, home delivery expert ParcelHero is warning that this will directly impact millions of home shoppers and believes the tax will simply be passed straight on to the customer.
ParcelHero’s Head of Consumer Services, David Jinks MILT, says home shoppers should not be “duped” into footing the bill for the impact of Covid-19.
He said: “During lockdown, shoppers of all ages have turned to e-commerce so they can continue to shop safely from their own homes. That is a sensible choice and consumers must not be punished for being wary of shopping centres and crowded stores. The e-commerce giants aren’t going to pay through the nose – they will simply pass any new tax on to the consumer.”
He continued: “Many people, particularly the elderly and vulnerable, are unable to risk shopping in-store because of the pandemic. These people, many of whom have turned to online shopping for the first time, would bear the brunt of the new tax. The rise of these so-called ‘silver surfers’ has helped keep the spread of Covid down.”
Parcel Hero said it agrees with the British Retail Consortium’s view that an online tax would hit high street retailers who have online operations and result in higher costs for shoppers at a time of severe weakness in the British economy.
David added: “It’s simply naive to think that most of today’s successful retailers are not already online. Those that aren’t are staring extinction squarely in the face and no new online tax can save them.”
Last year, the Treasury first floated its plans for a 2% online sales tax, Parcel Hero said this is simply unfair on elderly or shielding people and the real problem and cause of the collapse of the high street lies with the UK’s “sky-high business rates”.
Business rates are currently suspended on retail properties because of the coronavirus pandemic, but they are due to start again from April.
David said: “Britain’s business rates are the highest in Europe and they cripple high street retailers. Tackling these will help bring life back to our beleaguered town centres far more effectively than a new online sales tax.
Parcel Hero believes the Treasury should “stop dragging its heels” and push forwards with long-awaited plans to abolish business rates and replace them with a ‘capital values tax’ that would be based on the value of land and the buildings on it - this tax would be paid by the owner of the property rather than the business leasing it.
ParcelHero’s report, ‘2030: Death of the High Street’ has already been discussed in Parliament and reveals that, unless retailers develop an omnichannel approach that embraces both online and physical store sales, the high street as we know it will reach a dead-end by 2030.
You can read the full report on the Parcel Hero website here.
