Online sales tax ‘would punish UK SMEs’, Amazon warns Treasury | Economic news

An online sales tax (OST) would cause significant harm to Britain’s army of small businesses, the world’s largest online retailer has warned the government.

Sky News has learned that Amazon UK country manager John Boumphrey told a Treasury minister at a meeting on Wednesday that a 1pc levy would hurt the hundreds of thousands of SMEs doing business on its platform.

The remarks came during a summit roundtable convened by Lucy Frazer, the Treasury’s financial secretary and minister responsible for tax policy.

Attended by executives from companies including ASOS, Currys, eBay and Just Eat Takeaway, the meeting followed the conclusion of a consultation on the potential for a corporate action.

EBay was among other companies to warn of a negative impact on SMEs if a new tax was introduced, according to people briefed on the meeting.

Some executives said a OST would serve to stifle innovation at a time of severe economic challenges, the people added.

Amazon declined to comment on the meeting or provide a statement on its views on an online tax.

A Treasury spokesperson said: “We have not decided whether or not to proceed with an online sales tax.

“The aim of the recent consultation was to examine the design options and economic impacts of such a tax, and to explore the arguments for and against. »

Ahead of the meeting, some retail industry executives privately said they believed the government’s appetite for a new tax and reforming the decades-old business pricing system was fading. .

Industry figures believe there is a broad consensus among online and brick-and-mortar store owners that business pricing needs urgent and sweeping reform.

The Retail Jobs Alliance (RJA) – a new grouping whose members include Kingfisher and Tesco – produced research this week showing that a reduction in tariffs for all retailers would lead to a tax reduction for 197,000 stores across the country. .

The RJA, which was launched last month, wrote to Rishi Sunak, the Chancellor, to “advocate for a comprehensive reduction in business rates for all business premises, [which] we are open to funding…thanks to the introduction of a new online sales tax”.

Its other members include Gregg’s and Waterstones.

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