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Sales or excess profit tax should be replaced by Corporation Tax to bring back the British High Street

Sales or excess profit taxes on online retailers will not bring back the British High Street and should be replaced by increasing Corporation Tax.

There have calls for online retailers to be hit with a sales tax or excess profits tax as a means of levelling the playing field for traditional bricks and mortar retailers, but this is only a short-term measure to help fund pandemic costs.

While there is a place for an online sales tax, setting this at 1 or 2% is not going to address the issue the critical issue for retail on the High Street.

An online sales tax should be used as a short-term measure. What is needed is a long-term review of Local Government Funding and the rates system to address the structural changes that are affecting the retail sector.

Traditional retailers are being hit because rateable values were set when retail property values were high, and this is now out of step with retail profits. Maintaining rates at this level will lead only to the closure of an ever-increasing number of stores on our High Streets.

A fairer system would be increasing the rate of Corporation Tax to cover the loss in revenue from rates and then look at the mechanism of allocating this to local authorities coupled with a wholesale review of local government funding.

Would you like to know more?

If you would like to discuss any of the above guidance, please get in touch using the contact details to the right or through your usual Blick Rothenberg contact. Check out our Retail Hub for more retail industry news and guidance.

For any press queries, please contact David Barzilay whose details are to the right.

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