UK e-commerce sales tax still a 'work-in-progress' - report

By

Nigel TAYLOR

Published
Oct 18, 2021

The UK government is drawing up plans to introduce an online sales tax, but don’t expect its inclusion in the chancellor’s end-of-the-month budget.

Although Rishi Sunak and treasury officials have stepped up plans to level the playing field between tech giants and high street retailers, the decision is likely to be delayed until next spring, the Telegraph reported. 

The news will come as further disappointment for UK’s physical retailers who were hoping a major overhaul of business rates would be included in the 27 October budget. Instead, only minor changes to the rating system are expected to be announced with “wholesale reform” now shelved.

Government officials confirmed an online sales levy is being drawn up, including details of what goods and services will be covered, but the final decision will be pushed out beyond the upcoming Budget, the report confirmed.

A government source said: “The plans are at a very rudimentary stage but clearly the direction of travel has been set now”, but adding that any major announcement "is likely to be pushed back into the spring”.

Amber Mace at consultancy EY said: “The government may well need more time to conquer the challenge of designing an online sales tax that doesn’t just add further burdens onto the sector and deter investment in e-commerce”.

A Treasury spokesman said: “Our review into business rates will conclude this autumn.”