Rishi Sunak is contemplating a 2 per cent tax on goods sold online, possibly combined with a ‘green’ levy on delivery vans and a radical review of business rates, all designed to improve the survival chances of high-street retailers while harvesting more revenue from online sellers who have boomed during lockdown.
About time too — but the question is whether the likes of Amazon are so smart at tax minimisation that they will simply outflank new measures and pass costs to consumers. Attacking on several fronts at once might be the answer, and one idea — from the veteran think-tanker Lord Vinson — is that business rates on ‘big box’ online distribution centres should be increased in line with those paid by supermarkets, proportionate to sales: Tesco’s £700 million business rates bill on £50 billion of sales offers a benchmark.
Even better, of course, to deter distribution centres from moving straight to Belgium or Ireland, would be an international treaty on taxing digital giants. But in these strained times, that prospect looks further away than ever.
This article is an extract from Martin Vander Weyer's Any Other Business, available in this week's magazine.