The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Next

Next chief warns online sales tax could hit digital start-ups

Author

By John Glenday, Reporter

July 22, 2013 | 2 min read

Next chief executive Lord Wolfson has warned that the imposition of an online sales tax could be disproportionately damaging to digital start-ups.

The comments come in the wake of interventions from the heads of Sainsbury’s and Morrison’s calling for just such a tax in order to provide a ‘level playing field’ with bricks and mortar retailers.

Wolfson said: “A lot of small, fast-growing online firms work on very thin profit margins. An extra tax burden might simply wipe them out.

“For a country that is at the forefront of the internet revolution it would be an extremely backward step. I don’t think we could realistically expect a reduction in rates on the back of it. It would only increase the overall tax burden and would ultimately be passed on to consumers in the form of higher prices.”

This view was reflected in an open letter, penned by the chief executives of Ocado, Shop Direct, Biden, N Brown, Appliances Online and notonthehighstreet.com, which said: “Physical retailers rightly continue to call for lower business rates on their stores. But to simply shift the burden to online retailers by imposing a new tax is a nonsense that will be detrimental for consumers, jobs and investment.

“We support our high street counterparts in their call for lower business rates, but hitting online businesses by replacing lost revenue with this type of tax will hamper growth, slow the economy, impact jobs and reduce investment while not achieving a significant uplift for the Treasury.”

Next

More from Next

View all

Trending

Industry insights

View all
Add your own content +