UK delays decision on online sales tax

The UK is reportedly set to delay a decision on whether it will introduce a UK online sales tax that aims to level the playing field for online and physical retailers.

Media reports emerged last month that the UK Treasury was exploring options for a tax on online retailers which have prospered during the pandemic as consumers shifted to online shopping.

The proposed tax would see a levy of around 2 percent added to all goods bought online.

Chancellor Rishi Sunak now plans to wait until the autumn before deciding whether to introduce the contentious tax, The Financial Times reports, citing government officials.

The chancellor reportedly wants to wait until the US has revealed whether it will support efforts led by Paris-based organisation OECD to reform global digital tax rules.

“The US has shown some movement on this already, so we want to give it a bit more time,” one UK Treasury official told The Financial Times.

The online sales tax, sometimes referred to as the “Amazon tax”, is a hotly debated topic in the retail sector. While some argue it could give a much-needed boost for struggling physical retailers, others argue it could drive up prices for consumers.

The British Retail Consortium has previously warned a tax on the sale or delivery of online goods “would simply be another burden on an already overtaxed industry”.

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