HMRC have launched a consultation investigating the possibility of introducing an online sales tax. With the surge in online sales and the difficulties faced by the retail industry through the pandemic, online selling businesses may have coped far better than businesses who were forced to shut during lockdown.
Retailers with physical premises can face an unfair tax burden, partly due to business rates and commercial rents. The government have sought to mitigate this by bringing in reliefs for business rates and this tax could possibly tax be used to fund this. However online retailers have delivery networks, warehousing and marketing technology to consider. The tax is being considered to mitigate against the rates situation but as rates are a devolved issue, funds raised might be used to assist the other legislative bodies, but such reliefs are currently only planned for England.
ICB is responding to this consultation, but we would be grateful for your input into our thought processes.
Firstly there is a need to define what constitutes an online sale for tax purposes.

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* 1. Which of the following would you consider to be an online sale (please select all that apply)?

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* 2. Should there be a different treatment if you can select to receive a digital or physical asset e.g. ordering digital book or receiving a paper back through the post?

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* 3. Do you think that certain supplies or goods should be exempt e.g. food supplies?

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* 4. It is likely that the final tax burden will fall on the end consumer so should this tax be levied on business to business sales which may or may not involve a further end-user consumer?

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* 5. Some small businesses will offer a mixture of face to face and online sales. Do you think that there should be some form of threshold before the tax is incurred?

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