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Online retailers attack plans for sales tax Online retailers attack plans for sales tax
(2 months later)
A row between online and high street retailers has reignited after some of the industry's biggest web-only businesses dismissed suggestions for an online tax as "nonsense".A row between online and high street retailers has reignited after some of the industry's biggest web-only businesses dismissed suggestions for an online tax as "nonsense".
The chief executives of Ocado, Shop Direct, Boden and N Brown have laid out their opposition in a letter to the chancellor. It comes less than two weeks after a British Retail Consortium meeting where companies were urged to end the infighting and focus on reforming business rates.The chief executives of Ocado, Shop Direct, Boden and N Brown have laid out their opposition in a letter to the chancellor. It comes less than two weeks after a British Retail Consortium meeting where companies were urged to end the infighting and focus on reforming business rates.
Ocado chief executive Tim Steiner, who attended the BRC meeting, has now put himself on a collision course with new business partner Morrisons after the supermarket's boss, Dalton Philips, called for an online tax.Ocado chief executive Tim Steiner, who attended the BRC meeting, has now put himself on a collision course with new business partner Morrisons after the supermarket's boss, Dalton Philips, called for an online tax.
The letter said: "Online is a rare and precious success story for the UK and one that we should take pride in. At a time when SMEs in these sectors are attempting to deliver innovation, growth and jobs they should not be choked off by unintended consequences of an unfair tax."The letter said: "Online is a rare and precious success story for the UK and one that we should take pride in. At a time when SMEs in these sectors are attempting to deliver innovation, growth and jobs they should not be choked off by unintended consequences of an unfair tax."
It added: "There is no logic to penalising companies that provide consumers the convenience, efficiency and value online shopping offers."It added: "There is no logic to penalising companies that provide consumers the convenience, efficiency and value online shopping offers."
Several high street retailers, including Justin King of Sainsbury's and Topshop's Sir Philip Green, have called on the government to overhaul the business rate system.Several high street retailers, including Justin King of Sainsbury's and Topshop's Sir Philip Green, have called on the government to overhaul the business rate system.
King recently pointed to a US online tax system as a possible alternative and said there remained an "unlevel playing field" between bricks and mortar outfits and online-only retailers.King recently pointed to a US online tax system as a possible alternative and said there remained an "unlevel playing field" between bricks and mortar outfits and online-only retailers.
Morrisons' Philips added: "As more and more sales migrate online, it seems to me intuitive that you would tax the online channels as well."Morrisons' Philips added: "As more and more sales migrate online, it seems to me intuitive that you would tax the online channels as well."
The supermarket recently signed a deal with Ocado to launch an online service in January next year. However, Philips' views are at odds with Ocado's Steiner, who told the Guardian earlier this month that retailers need to "shut more shops and stop moaning".The supermarket recently signed a deal with Ocado to launch an online service in January next year. However, Philips' views are at odds with Ocado's Steiner, who told the Guardian earlier this month that retailers need to "shut more shops and stop moaning".
The BRC had warned retailers to stop fighting each other and find common ground after splits appeared. Director general Helen Dickinson said: "The idea of seeing parts of the retail industry in conflict isn't in the interests of the industry and, most importantly, it isn't what customers want."The BRC had warned retailers to stop fighting each other and find common ground after splits appeared. Director general Helen Dickinson said: "The idea of seeing parts of the retail industry in conflict isn't in the interests of the industry and, most importantly, it isn't what customers want."
A recent report by PricewaterhouseCoopers found that business rates were higher than corporation tax. For every £1 of corporation tax, the top 100 retailers paid £1.44 in business rates. Online retailers still have to pay rates on the warehouses they use, however. Nonetheless, because the rates are calculated on rent, they are far lower than on a busy high street.A recent report by PricewaterhouseCoopers found that business rates were higher than corporation tax. For every £1 of corporation tax, the top 100 retailers paid £1.44 in business rates. Online retailers still have to pay rates on the warehouses they use, however. Nonetheless, because the rates are calculated on rent, they are far lower than on a busy high street.
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