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Group backs new online sales tax

4th August 2020

Online marketplaces should be liable for the collection and remittance of VAT, according to a tax group.

Chancellor Rishi Sunak is considering introducing a new 2% tax on goods sold online in a bid to boost struggling high street retailers.

Alternatively, the Chancellor could bring in a congestion or emissions charge applying on deliveries of goods bought online.

The new measure may be proposed in a report on business rates in England, which is due to be published in the autumn.

The Office for National Statistics said online spending as a proportion of total sales stood at 31.8% in June, up from 20% before the pandemic.

The Association of Accounting Technicians (AAT) expects this consumer trend to continue.

Adam Harper, director at the AAT , said:

"Online marketplaces should be liable for the collection and remittance of VAT as it would reduce VAT evasion, and level the playing field for small businesses - whether bricks or clicks.

"It would also reduce the administrative burden for small businesses who trade online and raise much-needed revenue for the Treasury."

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