Tax online retailers to save UK high streets, MPs say

Dated policies and an unfair tax regime must be reformed in order to save Britain’s ageing high streets, MPs have said.

Business rates are stacking the odds against high street retailers and in favour of online giants such as Amazon, a report from the Houses Communities and Local Government Committee found.

The committee called on government must to provide “meaningful relief” to high street retailers and look at proposals for an online sales tax to level the playing field, the report said.

Councils, businesses and local communities must all collaborate to form local plans for each area and regenerate town centres, helped by funding and additional powers from government, the committee said. It comes after a string of retailers have announced job cuts and store closures.

Helen Dickinson, chief executive of the British Retail Consortium, said the select committee’s assessment was “spot on”

“In fact, retail accounts for 5 per cent of the economy, pays 10 per cent of all business tax and shoulders 25 per cent of the UK’s Business Rates bill.

“This damaging and outdated Business Rates system, which drives up the cost of doing business, is a major factor in store closures as well as hindering the successful transformation of our high streets.”

Ms Dickinson pointed to alternative options but said new taxes for online retailers or on deliveries were not the way to go.

“Retailers are blurring the lines between the digital and physical experience,” Ms Dickinson said.

“With eight of the top ten internet retailers also having physical shops, it is clear that an online tax would further damage the high street.”

“Without a full and urgent review of business rates and business taxes, the Government is sleepwalking into the demise of many of our local communities up and down the country. Failure to act by Government will have devastating consequences for local communities and consumers.”