Treasury may rule out online tax that 'could save high street'
The Treasury has been forced to rule out an online sales tax that would have helped save the UK high street from its crisis, as official felt it would have broken European Union rules.
Mel Stride, financial secretary to the Treasury, wrote to Nicky Morgan, chairwoman of the Treasury select committee to warn her there was a high “risk” that the tax would not be compatible with EU regulations, the Times reported on Friday.
According to the Treasury there hasn’t been an official announcement on the decision.
The tax would help shops to compete on fairer terms with online businesses that are drawing in ever more consumers but paying a smaller amount of tax.
Bosses of large business from Tesco to Sports Direct have called for an online levy, though differing on how it should be structured.
Campaigners have accused companies such as Amazon of having complicated tax structures to wriggle their way out of paying their fair share in taxes. Amazon pays only £63m in business rates in the UK despite reporting over £8bn in sales.
Last August Philip Hammond, the chancellor, said: “We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online.”