// Notonthehighstreet CEO warns that an online sales tax would come at the worst time for small retailers turning to online
// There is a widening split in the retail industry over the potential introduction of an online sales tax in the Budget this week
Notonthehighstreet’s chief executive has warned that any Budget move to impose an online sales tax would be a “mistake” and penalise small firms already battered by the pandemic.
Claire Davenport said it would come at the worst time for small business owners, with many having shifted online due to the Covid-19 pandemic or set up internet ventures after losing their jobs in the crisis.
The online gift retailer and marketplace saw its community of hand-picked small business sellers rise four-fold in 2020 as ecommerce became a lifeline for many firms and entrepreneurs.
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Davenport’s comments come amid a widening split in the retail industry over the potential introduction of an online sales tax as reports suggest the Chancellor is looking at how the levy could work in the UK ahead of his Budget, which will be unveiled on Wednesday.
Some are calling for the tax to replace the outdated and highly criticised business rates system and help level the playing field with internet retail giants who are not burdened with a bricks-and-mortar store estate.
However, others fear it will stifle a burgeoning industry that will help the economy recover from Covid-19.
“My own view is that it’s a mistake,” Davenport told PA Wires.
“A lot of small businesses have spent the past year trying to get online and set up their businesses – people who didn’t run a business before or have had to pivot because they’ve needed to go online.
“You don’t want to get in the way of people doing that.
“Penalising small businesses that are trying to follow a trend that’s happening in the market is not right.”
Notonthehighstreet, which was founded in 2006, saw a 50 per cent surge in applications from sellers last year, with a 78 per cent increase in May.
It also added nearly another million new customers in 2020 as online retail boomed with swathes of the high street shut due to Covid-19 restrictions.
Rather than hitting small businesses with online levies, Davenport said the Budget should instead look to offer more support to sole traders and help small businesses “get started and scale up”.
Notonthehighstreet has expanded to match the growing demand, taking on another 77 employees last year and almost doubling its product and technology team.
Last month the online retailer was acquired by US private equity firm Great Hill Partners, which also backs home furnishings retailer Wayfair.
Notonthehighstreet wants to further boost the number of sellers on its marketplace and widen ranges across homewares and garden products, as well as food and drink – which saw combined sales double last year.
The retailer has some 3.6 million customers and more than 5000 sellers on its market.
with PA Wires