Sainsbury’s urges Chancellor to launch online sales tax after M&S rejection plea
Sainsbury’s bosses have urged the government to launch an online sales tax after rival M&S warned such a move could damage the high street.
The divisive calls come a day before the government closes a three-month consultation on whether to introduce an online sales tax.
Such a tax has been proposed as a potential measure to fund a reduction in business rates, with property tax hitting shops, pubs and restaurants.
Sainsbury’s said the current business pricing system is burdensome for UK high streets and called on the Treasury to tackle the problem using money from an online sales tax.
Kevin O’Byrne, the supermarket group’s chief financial officer, said: ‘High trade prices in shops are destroying the country’s high streets.
“We urgently need a fundamental reform of corporate tariffs.
“We urge the government to introduce an online sales tax that funds a reduction in commercial tariffs for retailers of all sizes and levels the playing field between physical and online retailers.”
Sainsbury’s is among major retailers, including Tesco and Morrisons, which recently joined the Cut The Shops Tax campaign to demand an overhaul of business rates.
Chancellor Rishi Sunak promised consultation on an online tax during the budget in October following business concerns over a potential fiscal imbalance between in-store and online retailers.
However, in a letter to the Chancellor, M&S Chief Financial Officer Eoin Tonge said: “Introducing an additional tax on the already overburdened retail trade will simply mean that retailers will cut their fabric accordingly.”
Online sales are currently the main area of growth for many retail businesses, which have raised concerns that a new tax could hamper their recovery amid an explosion in digital demand following the pandemic.
Mr Tonge added: ‘Far from stabilizing, an online sales tax would lock us in.
“This would make it even more difficult for retailers that the consultation is allegedly trying to help invest in the digital transformation needed to survive and grow in the modern digital age.
“The solution we need is practical, pragmatic reform of corporate tariffs and better taxation of global players to ensure everyone pays their fair share.”