Online tax in view of Boohoo and ASOS deals – daily business

0
75

Boohoo will add more high street brands to its portfolio

More calls for a tax on online retailers are likely to follow after new figures confirm the gap between online retailers and those with brick and mortar stores.

Fashion giants Asos and Boohoo paid just £ 48.1 million in taxes last year – a fraction of the £ 160 million paid by the Arcadia Group of Sir Philip Green and Debenhams, whose brands they acquire.

According to The Sunday Times, ASOS is expected to confirm a nearly £ 300 million deal for Arcadia’s TopShop and Miss Selfridge earlier this week, completing a double dive from online retailers to established high street businesses.

Hundreds of stores will close, however, and thousands of jobs will be lost as neither ASOS nor Boohoo, who acquired Debenhams last week under a cheap £ 55m deal, want to cover the cost of running physical assets.

Boohoo is also in exclusive talks to buy Arcadia’s Burton, Dorothy Perkins and Wallis.

Pressure is now mounting on Chancellor Rishi Sunak not only to balance the cost of doing business between online and physical retail, but also to close a large hole in lost sales when stores close.

An online tax is becoming a lucrative and much-needed source of income. A 2% levy on all goods purchased online would bring in £ 2 billion a year.

Jesse Norman, Treasury Secretary of the Treasury, recently confirmed that this is one of the ideas being considered.

Mr Norman told the Commons Treasury Committee last week, “When we pondered corporate rates in the recent consultation, we brought up the idea of ​​an online sales tax and made it public for discussion and evaluation only and we are still thinking about it. ”

His comment was seen as an indication that Mr. Sunak may be considering an online sales tax rather than a property tax.

Companies that sell over the Internet were among the major beneficiaries of the lockdown alongside delivery companies.

Even in normal times, they have a cost advantage over stationary shops, as they do not have to pay rental or maintenance costs for real estate.

However, the problem is shared by leading retailers. Some say a tax would simply raise prices for consumers.