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Retailers to meet with Treasury over online sales tax reform concerns

Jeremy Lim
21 June 2022

The heads of companies including Amazon, ASOS and Currys will this week meet Lucy Frazer, the financial secretary to the Treasury, to reiterate calls for a radical overhaul of the rates regime, according to Sky News.

The news comes after the government's consultation on the launch of a tax on digital sales ended last week. However, divisive opinions within the retail sector has fuelled concerns that the government will use disagreements as an excuse to abandon the plans.

Businesses including Tesco, Sainsbury’s, The Co-op, Morrisons and Kingfisher reportedly support the online tax, while John Lewis Partnership, M&S and Currys have argued against the introduction of the tax.

Retailers expected to attend Wednesday's meeting include Jason Tarry, Tesco's UK and Ireland CEO, Mathew Dunn, ASOS's Finance Chief, John Boumphrey, Amazon's UK Country Manager, and Alex Baldock, Currys' Chief Executive.

In February, the Treasury launched a consultation on the merits of an online sales tax in the wake of a business rates review as consumers increasingly shift to digital channels. It claimed that the online sales tax and reform of the decades-old system of business rates would save companies £7 billion.

Frazer said at the time: "Whilst we've made no decision on whether to introduce such a tax, it's right that, given the growing consumer trend to shop online, we work with stakeholders to assess the appropriate taxation of the retail sector".

Last month, the newly formed Retail Jobs Alliance (RJA), whose members include Tesco, Kingfisher and The Co-op wrote to Rishi Sunak, the chancellor, to "make the case for an overall cut in business rates for all retail premises."

The members of the RJA said: "A meaningful cut in the Shops Tax would make a big difference to retailers' ability to invest more in the shops and stores that we know customers value, as well as to create jobs. This would make it easier for everyone in the retail sector to mitigate inflationary pressures, keep existing shops open and open new ones."

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