Is It Time for an Online Sales Tax in the UK?

March 2022
Region: Europe

The challenges arising from the digitalisation of the economy and the disruption that online sales have brought to the business models of traditional retail sellers is real. The pandemic, national lockdowns, stressed supply-chains and the sheer level of governmental intervention needed to support the high street have all exposed imbalances, exacerbated difficulties and accelerated change.

In turn, HMRC has published a policy consultation to assess the case for and against implementing an online sales tax (OST) as a means to rebalance the taxation of the retail sector between online and in-store retail.

All retail, hospitality and leisure businesses, whether likely in scope of an OST or not, are strongly encouraged to participate in HM Treasury’s consultation. By doing so, fully and candidly, they will be able to inform UK government tax policy at an early stage in its development.

We are collating comments from our clients in order to submit a response to the consultation on their behalf. We welcome any comments, observations or ideas to help inform our response, and would be delighted to discuss any experiences or concerns at any time as we continue to track the progress of this potentially crucial development.

We have prepared an online Survey (which will be open until 13 May 2022) to make the process as easy as possible. Please do not be deterred by the length of the questionnaire, as you only need to complete the questions that are relevant to your business, or that you feel compelled to comment on.

To support your response, we have prepared an alert, Is It Time for an Online Sales Tax in the UK?, which summarises the policy considerations that permeate HM Treasury’s consultation. We welcome you to get in touch with our tax advisers for further guidance