Chancellor to delay decision on online sales tax until Autumn

Chancellor Rishi Sunak is reportedly planning to delay the final decision on the possibility on a UK online sales tax until Autumn 2021.

Dubbed the "Amazon Tax", the online sales tax has been proposed to level the playing field between retailers on the high street and those online. According to some reports, the tax might take the form of 2% on every online order or a delivery levy to curb traffic and pollution.

According to Financial Times, the Chancellor now wants to wait until President Joe Biden’s US administration reveals whether it will support efforts to reform global digital tax rules led by the Paris-based OECD.

In a call for evidence, the Treasury highlighted concerns that business rates were effectively penalising the high street because online rivals did not need to rent “high-value” properties.

The evidence said that the Coronavirus pandemic “has had a significant impact on how business is done”, imploring the government to act now to make sure that “the tax system raises sufficient revenue”.

The British Retail Consortium (BRC) Director of Business and Regulation Tom Ironside, told The Guardian last year: “Taxing the sale or delivery of online goods would simply be another burden on an already overtaxed industry, one that would ultimately hit consumer spending through higher prices.

“Throughout the pandemic, many of us have been relying on retailers to ramp up their online services to ensure we can all get the goods we need. The government should not harm these efforts by further taxing the businesses providing these services, and the people they serve.”