Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 29
29
Paragraph: 130
We support the principle of an online sales tax and welcome the consultation.
Recommendation
We support the principle of an online sales tax and welcome the consultation. We particularly welcome that revenue from an online sales tax would be used to reduce business rates for retailers. The Government should provide clear timescales for the consultation. Since the future of retail is multichannel due to changing consumer habits, it is particularly important that an online sales tax does not penalise retailers that have both an online and bricks-and-mortar presence. We look forward to further detail on the scope of the consultation, which we recommend must consider: • the impact on multichannel retailers; • the scope of the tax, including which sectors it will be levied on (such as groceries and holidays) and whether it will apply to Click and Collect; • how revenue will offset business rates for retailers in a meaningful way and on a permanent basis; • how the tax may sit alongside work by the OECD to develop a consensus solution to the tax challenges of digitalisation; and • the impact on local authority income.
Paragraph Reference:
130
Government Response
Acknowledged
HM Government
Acknowledged
The government thanks the committee for the consideration they have given to the proposal for an online sales tax (OST), which has been put forward by a range of stakeholders. HM Treasury published a consultation exploring the arguments for and against an OST on 25 February 2022. The consultation will be open for three months to 20 May 2022. The government has not decided whether to proceed with an Online Sales Tax. The government will be considering the issues raised by the committee as part of the ongoing consultation. That includes evaluating in detail the potential design of an OST, the economic impacts of such a tax, and assessing any stakeholders’ concerns. As the committee notes, if introduced, an OST would raise revenue to fund business rate reductions for retailers with properties in England and fund the block grants of the Devolved Administrations in the usual way.