Online sales tax will ‘damage shops and high streets’, Marks & Spencer warns

A consultation on the idea ends this week and Marks & Spencer’s chief financial officer Eoin Tonge warned that it would be damaging for high streets and the retailers that operate on them.

Tonge wrote: “Introducing an additional tax on retail – already overburdened – will simply mean retailers cut their cloth accordingly.

“This rationalisation will always start with the least profitable parts of a business – which, in the case of multichannel retailers, will more often than not be high street stores.

“Therefore it is likely that, far from helping the high street, an online sales tax will damage shops and our high streets further, particularly in areas that require new investment to bring them back to life.”

M&S’ intervention comes as retailers seek reform of the business rates system, which many believe puts bricks-and-mortar retailers at a disadvantage compared with online competitors.

Some of retail’s biggest names, such as Tesco and B&Q owner Kingfisher, have launched a ‘Cut the shops tax’ campaign and indicated they would be “open” to an online sales tax if it funded a reduction in rates.

However, other multichannel retailers share similar concerns to M&S that they would end up paying a new tax with little relief of the rates burden.

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