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Retailers indicate ‘overwhelming support’ for online sales tax

71% of retailers, who already have an online presence, support the new tax and 100% of those who don’t have an online presence support it too.

Retailers have given “overwhelming support” to the introduction of a form of online sales tax to take the pressure off business rates, according to a recent snap survey by Colliers.

It revealed 89% of respondents were in favour of the new tax with only 11% in disagreement. The survey was carried out following the Government’s announcement of a consultation on an online sales tax policy on 25 February, due to close on 20 May 2022. 

Colliers said the consultation has increased calls from the retail and rating industry for a “fairer retail playing field” and a tax system that does not penalise high street retailers, who pay business rates on their physical stores, whereas online rivals do not.

High business rates in the retail sector have been cited as one of the key components for shop failures and the decline of the high street in recent years. 

The survey also showed the vote for an online sales tax was most supported by retail landlords and investors with 98% agreeing with the tax. 

Additionally, 71% of retailers, who already have an online presence, support the new tax and 100% of those who don’t have an online presence support it too.

The survey asked whether “click and collect” should be subject to online sales tax and here opinions were more divided with 54% of those surveyed saying yes and 46% saying no. 

Colliers also asked what products or size of retailer should be exempt from the online sales tax, or pay a reduced amount. Some 71% of those surveyed put essential items into the bracket of exempt or a reduced tax, 66% said small retailers, 55% said web-based apps in stores and 52% said digital products. 

However, only 31% said sales by emails should be exempt or pay a reduced tax, with 69% saying these products should pay online sales tax.

John Webber, head of business rates at Colliers, said: “Although our survey is a snapshot of our retail clients it does throw up some interesting pointers. It certainly seems there is overwhelming support to bring in some sort of online sales tax to try and level the playing field and take the full burden of business rates off bricks and mortar retailers.

“It is only right that we should try and re-balance the system and create a fairer playing field for all. But it is also essential any monies raised by an online tax is used directly to alleviate the high business rates burden and does not go into a government black hole.”

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