Mona Bitar, EY UK & Ireland Consumer Leader, comments on the Chancellor’s Budget and the lack of detail around online sales taxes:
“The rumoured online sales tax did not appear in today’s Budget announcement, leaving the retail sector waiting for details on the Chancellor’s intentions. As the sector navigates post-pandemic recovery, greater certainty is needed in this area. With tax consultations deferred until 23 March, the sector will be hoping for more information then.
“Most physical retailers are trying to grow their online business while managing a portfolio of stores as footfall declines. Any new taxes on online sales will need to be set at the right level and introduced at the appropriate time to benefit rather than hinder these businesses as they seek to recover from the impact of COVID-19.
“For an online sales tax to be successful, there needs to be a very careful and balanced consideration for different businesses within the sector. Increased online sales do not necessarily mean large profit margins, particularly where businesses are having to invest in their technology and fulfilment infrastructure. Innovation and entrepreneurship should be recognised and supported, particularly in the context of a post-pandemic recovery and Brexit.”