Trade union calls to reconsider rejection of online sales tax to help high streets

Retail trade union Usdaw is calling on the government to reverse their rejection of an Online Sales Tax, after a recent BBC research lays bare the scale of the devastation on UK’s high street.

Usdaw has long called for this measure to help rebalance taxation between online and in-store retail and was supported by many retail businesses.

According to a new analysis from the BBC, there were 9,300 fewer retail outlets in March 2022 than March 2020 due to closures of banks, clothes shops, and department stores. As high street retailers struggle to compete because of high overheads, the Office for National Statistics found that online shopping has seen a tenfold increase since 2006, now amounting to over a quarter of all retail sales.

Usdaw general secretary Paddy Lillis said on Tuesday (6) that the current business rates system is not fit for purpose, because it places “bricks and mortar retailers at a significant disadvantage to online retail”.

“Action is needed to level the playing field and that need is writ large in today’s BBC analysis. So it was deeply disappointing that the government rejected an online sales tax in their Autumn Budget, which could have funded substantial reductions in business rates, allowing high street retailers to innovate, grow, protect and create jobs.

“We urgently need to level the playing field between online and bricks-and-mortar retail, something Usdaw and many major retailers have consistently called on the government to do. A 1 per cent online sales levy could raise around £1.5 billion and fund a 20 per cent cut in the current outdated and imbalanced commercial property tax. A reduction in business rates would support retailers to invest in our high streets and in the workforce, having a positive impact on communities and the wider economy.”

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