M&S and Sainsbury’s clash on merits of online sales tax
TWO of Britain’s largest retailers have clashed over whether the UK should introduce a tax on online shopping.
Marks & Spencer has warned that an online sales tax would damage the high street, while Sainsbury’s has argued that the funds raised from it could help revive it.
Kevin O’byrne, chief financial officer of Sainsbury’s, urged the Government to press ahead with the tax as it would subsidise a cut in business rates levied on high street stores. It had the potential to level the playing field between physical and online retailers, he added.
His intervention came after it emerged that his counterpart at M&S wrote to Rishi Sunak, the Chancellor, arguing that such a tax would “punish” traditional retailers as they seek to sell more of their goods on the internet.
Eoin Tonge, M&S’S head of finance, said: “The argument that the introduction of an online sales tax would potentially rebalance the increasing burden of business rates on bricks and mortar retailing doesn’t stand up to scrutiny of the facts.”
He said such a tax would make it more difficult to invest back into the business and shops.
Mr Tonge added: “Introducing an additional tax on retail – already overburdened – will simply mean retailers cut their cloth accordingly. Far from helping the high street, an online tax will damage shops and our high streets further.”
The Treasury has heard arguments for and against the tax from retail bosses since February and is yet to make a decision. The consultation closes today.
Mat Dunn, chief operating officer at
Asos, the online fast-fashion website, threw his weight behind M&S.
He said: “The last thing consumers need is a new shopping tax on top of VAT that would further increase prices and hit people on lower incomes hardest.
“M&S is right to warn that an online sales tax would damage the high street and retailers of all sizes investing in innovation to serve their customers.”
The Chancellor has also promised to reform business rates, which are based on the property value of a company’s physical premises.