AAT amongst prominent businesses warning against Online Sales Tax
30 May 2022
On Friday 27 May, AAT joined various leading business organisations, marketplaces and retailers in penning a letter to the Chancellor of the Exchequer, advising against the introduction of an Online Sales Tax (OST).
The government’s OST policy consultation ran from 25 February to 20 May, and the feedback is now being analysed.
AAT has previously made clear that although the business rates system needs reforming, an OST is not a viable solution.
ASOS, Currys and Gymshark are among the 11 organisations to have signed the letter to the Chancellor, pointing out the shortcomings of the OST proposition.
In their letter, the group stated:
“We are deeply concerned that an OST would hit millions of households that are already struggling to cope with the highest inflation for 40 years and soaring bills. We believe an OST would also hurt – not help – the high street, and stifle retail innovation and investment.
“Most retailers operating online do so in highly competitive markets where consumers easily compare prices and margins are razor thin. Retailers would have little choice but to pass on an OST to consumers in the form of higher prices thereby fuelling inflation.”
In their letter, the group also point out that businesses have invested billions in cutting-edge technology to deliver online services for consumers.
AAT recently submitted its views to the OST consultation, robustly arguing against the introduction of an OST, stating that:
- defining an online sale is already difficult and will become increasingly challenging in the future, leaving the tax vulnerable to gaming and abuse
- proposals to apply an OST to UK consumers but not overseas buyers of UK goods or overseas sellers to UK buyers, appears to undermine the credibility and fairness of such a tax
- rather than having environmental benefits, encouraging higher levels of instore shopping would probably lead to increased travel movements, increased pollution and increased congestion depending on the number of items purchased.
