M&S warns Rishi Sunak an online sales tax will ‘damage’ shops and high streets

Marks & Spencer has written to chancellor Rishi Sunak, warning that an online sales tax would do more harm than good for the high street.
A consultation on the idea ends this week.
// Marks & Spencer’s CFO urges Chancellor Rishi Sunak to scrap the idea of an online sales tax
// Big name high-street stores had called for an online sales tax because they saw it as unfair that the bills for online-only retailers are much lower

Marks & Spencer has written to chancellor Rishi Sunak, warning that an online sales tax would do more harm than good for the high street.

In February, the Government launched a consultation into possibilities for an online sales tax to ease the business rates burden on high street stores, which is due to close on 20 May.

In a letter to the chancellor, Marks & Spencer chief financial officer Eoin Tonge said: “Introducing an additional tax on retail, already overburdened, will simply mean retailers cut their cloth accordingly.


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“This rationalisation will always start with the least profitable parts of a business, which, in the case of multi-channel retailers, will more often than not be high street stores.”

He said that would not benefit high street stores, but cause them “damage” although, for now the Treasury has reportedly not yet decided if it will introduce the tax.

Chancellor Rishi Sunak promised the consultation at the Budget in October following businesses’ concerns of a potential tax imbalance between in-store retailers and those online.

Big name high-street shops had called for an online sales tax because they saw it as unfair that the bills for online-only retailers are far lower, and almost 90% of retailers back calls for one, according to a survey by property specialist Colliers

The British Retail Consortium (BRC) highlighed in its Retail, Rates and Recovery: How business rates reform can maximise retail’s role in levelling up report, published last September, that 83% of retailers said it is ‘likely’, ‘very likely’ or ‘certain’ that they will close shops if the business rates burden is not reduced

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5 COMMENTS

  1. Typical M&S. M&S have only done this as they’ve only just manage to get people to use there website so introducing this tax would wiping out there efforts. As poor and slow as they are. Next will follow suit as they put all there eggs in one basket..online. I’m very much for this online tax to bring back jobs to the high street & shopping centres which create far more jobs then just warehouse jobs.
    If the CFO of M&S is saying in a political way “retailers cut their cloth accordingly“ meaning jobs will be lost, cut his job first along with others. Cut from the top down instead of the bottom up. This is a key contributions to the rich saying rich and the poor saying poor.

  2. Will be interesting to see if Rishi Sunak listens to the overwhelming 90% majority of retailers who support online sales tax, or Marks & Spencers.

  3. Most retailers want Business Rates reformed in to a turnover tax. When the lease is like 125k but the rates are 194k a year it’s difficult to get a new business in to a long empty store.
    M and S need to wake up to this and a bit rich from an organisation actively closing town centre stores and moving to cheap out of town sites where business rates is minimal.

    Online needs taxing. You pay for click and collect anyway and also returns now and delivery so online is not that great.

  4. This sounds awful. I’m trying to find more details but for a small business who only recently launched an online store, this is such a big worry. Contending with large brands is difficult enough without the government bringing out another tax which will also wipe out any small businesses. I hope there are thresholds.
    Also, tax only hurts the consumer. All brands will increase their prices or remove offers so that they do not lose the profit. So in the end, the consumer loses. It’s like the argument for higher minimum wages, Joe Bloggs is who get’s hindered as big companies never lose so they increase the prices and small businesses generally struggle more or go out of business.
    Rishi is by no means a conservative chancellor, even if he wears a blue tie.

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