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  • Writer's pictureDaria Gavrilova

Digital sales tax could go a lot further

While welcoming the government's efforts to redress the imbalance between physical and online shopping , which has heavily favoured the latter, Commercial Property Advisors (CPA) urges HMRC to extend its net beyond its current target of enterprises with global revenues of more than £500 million a year, and UK revenues of more than £25 million pa. 

The threat to independent high street retailers comes not only from multinational behemoths, but from legions of online start-ups. The proposed online tax rate of 2% of turnover would hardly bankrupt any business, and its wider application would provide a vastly-increased opportunity for the tax revenue to be invested directly into the high street, after years of neglect and unfair competition.

Furthermore, CPA is not persuaded that the government's decision to await the imminent proposals of the OECD to apply a global rate of taxation, with a view to letting it subsume UK initiatives, is sufficiently robust, or fine-tuned to the precise needs of the UK economy, laid bare by the coronavirus pandemic.

Each country is more less scarred economically by the current lockdown, and the UK, more scarred than most, must be the arbiter in how to apply its own digital sales tax, and how best to disburse revenue raised to its high streets which, well before the virus struck , was in worse shape than most overseas comparators.

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