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Retailers Oppose Online Sales Tax

By Amanda Banks,, London

25 July 2013

A group of online retailers in the UK has hit back against a call by storeowners for them to be subject to an online sales tax.

Recently, the CEO of supermarket chain Morrisons complained that real-world retailers were disadvantaged by the current tax system.

Writing to a British newspaper, the online retailers argue that calls for an online sales tax are "a nonsense." They suggest that the tax would "kill entrepreneurial spirit" by making it more difficult for smaller online retailers to start up, and that it would be detrimental to supporting industries in technology, manufacturing, logistics and marketing. They add that many online companies export to Europe and beyond, and that this requires a "sound base" in the UK.

The retailers also describe the idea as "vague and ill thought-out." They ask whether it should apply to online-only retailers, or just to those with stores as well, and whether online travel agents and financial services providers should also be subject to the tax.

They also point out that they already generate VAT and pay taxes including "fuel duties, employment taxes, corporation tax, as well as business rates on their warehouses and offices," and that the issue of non-payment by large multinational online retailers is one of domicile rather than of online retail. Describing online retail as "a rare and precious success story for the UK," they warn that consumers, "particularly the poorest," will lose out should the tax be introduced.

The authors also express support for calls by high street shops for lower business rates.

The letter is signed by the CEOs of Appliances Online, Boden, N Brown,, Ocado, and Shop Direct.

TAGS: tax | sales tax | commerce | United Kingdom | e-commerce

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