COMMENT: Online retail tax could spell the end of indie retailers on the high street

Chancellor Rishi Sunak’s recent claim there could be a tax for online retailers “to protect the high street” might mean the death of bricks-and-mortar shops, especially if it's an independent retailer with a multichannel offering. The Camden Watch Company co-founder Anneke Short explains why.

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COMMENT: Anneke Short Camden Watch Company Online retail tax end of indie retailers high street opinion oped Rishi Sunak
"I understand the arguments from the likes of Tesco trying to compete against Amazon, but surely this "one size fits all" method just isn’t relevant in today’s world," Anneke Short writes.

In times like these and for retailers like ours, online is not just another sales channel – it has literally been our lifeline.

When full lockdown was announced in late March, we were forced to temporarily close our three London stores – and in all honestly, it came as a relief. We had been watching our sales fall dramatically since the beginning of March, with less footfall, less consumer confidence and uncertainty hitting us hard, both online and off.

Then lockdown was announced and we knew the government would have to do something. Surely, they wouldn’t just stand by and let all these businesses sink? Lo and behold, along came the furlough scheme, bounce bank loans, grants and more.


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And then something interesting happened. Along with these initiatives, consumer confidence slowly returned, online picked up and it wasn’t long before online was performing better than it had in previous months. Things were hard, and our problems far from solved, but they were certainly eased by having a strong online presence.

Fast forward six months and things are looking very different. Our stores have reopened but remain empty. Our bills are still coming in, but the grants have long been spent on keeping us afloat. We have had to let go of two of our staff and the remaining have been kept on in a large part due to the furlough scheme, which is due to come to an end in its present form at the end of this month.

COMMENT: Anneke Short Camden Watch Company Online retail tax end of indie retailers high street opinion oped Rishi Sunak
The Camden Watch Company’s flagship store in London.

Throughout all this, one thing has kept us going – our business, the ability to keep remaining staff, and importantly, keep hold of our stores. And that one thing is online.

Now there is talk of charging us tax on that hard-won, lifesaving money. Don’t get me wrong – I have nothing against tax per se, but even talking about taxing our online sales at a time when many retailers have pivoted online purely to survive doesn’t just seem short-sighted, it seems positively cruel.

“Taxing our online sales at a time when many retailers have pivoted online purely to survive… seems positively cruel”

In my mind, this could go one of two ways: either we take the cost on the chin, keep our prices the same, and make hard times even harder; or we pass it on to our customers and up our prices, risk losing sales and, you guessed it, make hard times even harder.

We would need to consider what this actually means for us as a business. If this so-called “online tax” is a way of trying to get consumers back to the high street, then it needs looking at again. For retailers like ours, it would just put extra pressure on our stores and on our staff, perhaps even leading to a total rethink in strategy.

In times when online is literally subsidising our bricks-and-mortar stores, an online retail tax could only mean one thing: closing our stores and letting go of our staff. Ironic for a plan that is designed to bring people back into the very stores it was designed to bolster.

Of course, there are many types of retailers out there, and pure play online retailers for example are a different kettle of fish. I understand the arguments from the likes of Tesco trying to compete against Amazon, but surely this “one size fits all” method just isn’t relevant in today’s world.

COMMENT: Anneke Short Camden Watch Company Online retail tax end of indie retailers high street opinion oped Rishi Sunak
The Camden Watch Company co-founders Jerome Robert & Anneke Short.

We already pay corporation tax on our profits, and in normal times we pay business rates on our stores and our office, VAT, and most importantly, we pay tax on our employees, kept in employment right now in large part due to our online channels.

I am by no means an economist, nor a politician for that matter. But it seems to me that rather than search for ways to get more money out of independent, small retailers like ours, perhaps we should look to actually claiming the correct amount of tax from businesses who perhaps aren’t paying their fair share.

Or instead of what essentially seems like a punishment for retailers that operate online, how about rewarding those who operate offline, thereby creating more jobs, more profit, and more money paid in tax.

Anneke Short is Co-Founder and Designer at The Camden Watch Company

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