UK postpones decision on new 2% tax on internet commerce
Rishi Sunak’s procrastination can bring some unexpected benefits. The British Finance Minister has postponed the decision on a new 2% tax on online sales. This gives you time to reflect on the best way to adapt the tax system to the increase in online purchases.
Sunak could raise corporation tax on its March 3 Budgets to fund expanded stimulus measures, according to the Times. A tax on internet sales to online-only businesses could have generated additional tax revenue, but would not have done much to reduce the deficit, which is projected to rise to € 457 billion in the year ending in April.
See Amazon, which would pay the lion’s share of the new tribute. A 2% rate applied to your 2020 UK revenue would more than double your tax bill in the country, but would only raise $ 776 million. If applied to the 2020 sales of fast fashion companies Asos and Boohoo, they would pay 75 million and almost 29 million more, respectively.
Grocery stores and other retailers complain that commercial fees, a tax on the value of companies’ properties, unfairly penalize those who have stores and not just warehouses on the outskirts. But a government with a huge deficit can find it difficult to cut property taxes significantly without finding alternative sources of revenue, since these taxes collect almost 60% of the 58 billion in corporate tax.
Many brick-and-mortar retailers are selling more online. Applying the 2% rate on internet sales to everyone, and not just to online cigars, would be even better for the Treasury. For example, according to Nielsen, the income of online grocery stores represents an average of 16% of their total. If the 2% were applied to the chains Tesco, J Sainsbury and WM Morrison, Sunak would raise 380 million more. Upgrading to the 21st century has its knack, but it would mean more tax loot.