// 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.
- M&S chairman attacks Brexit red tape, claims it has cost retailer £30m
- M&S chairman warns food prices will rise 10% this year
- M&S Marble Arch store ‘unnecessarily in jeopardy’ if rebuild plans blocked
“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