Online tax ‘would kill entrepreneurial spirit’

Top brass representing six companies including Ocado, Shop Direct and Boden have signed a letter to the Chancellor criticising online tax proposals.

A version of the Marketplace Fairness Act, which will allow US states to levy local sales taxes on online purchases, was one option being put forward by the industry body the British Retail Consortium.

Next boss Lord Wolfson has also thrown his hat into the ring and told The Daily Mail: “A lot of small, fast-growing online firms work on very thin profit margins. An extra tax burden might simply wipe them out.

“For a country that is at the forefront of the internet revolution it would be an extremely backward step.

“I don‘t think we could realistically expect a reduction in rates on the back of it.

“It would only increase the overall tax burden and would ultimately be passed on to consumers in the form of higher prices.”

Ocado chief executive Tim Steiner, Shop Direct‘s Alex Baldock, Boden‘s Julian Granville, N Brown chief executive Angela Spindler, Appliances Online‘s John Roberts and co-founder Holly Tucker have all thrown their weight behind the proposal.

The letter said: “An online tax would kill entrepreneurial spirit by making it harder for smaller online retailers to get started.”

New research released today from The National Institute for Economic and Social Research claims there are almost 270,000 active digital technology firms in the UK, compared to measurements by the Standard Industrial Classification which originally put the figure at 167,000.

The tax aimed solely at etailers, is supported by Sainsbury‘s boss Justin King who has repeatedly called for a “level playing field.”

The six retailers said they would welcome lower business rates for physical retailers. But they said “to simply shift the burden to online retailers by imposing a new tax is a nonsense that will be detrimental for consumers, jobs and investment.”


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