AAT says ‘no’ to Online Sales Tax

AAT recently became the ‘first and only’ professional accountancy body to publicly oppose HM Treasury’s proposals for an Online Sales Tax (OST).

AAT has repeatedly said that the business rates system is in need of reform, but also makes clear that an OST is not the solution.

The latest retail sales data shows the popularity of online retailers continuing to rise. Taxing such activity, suggests the AAT, could potentially stifle this upward trend, at a cost to consumers, businesses and the wider economy.

Phil Hall, Head of Public Affairs and Public Policy, AAT, said: “The government consultation puts forward a very vague idea of introducing a new tax in limited circumstances, with limited applicability, that it will not replace business rates but may help reduce them for some retailers in unspecified circumstances – all in the hope of partially addressing the fact that businesses that mostly operate online appear to pay less in business rates than ‘bricks and mortar’ competitors.

“However, recognising that many retailers now sell both online and offline, the impact of an OST is likely to be broadly negative for most UK retailers.

“The high degree of uncertainty around these proposals makes it difficult even for the most passionate proponents of an Online Sales Tax to support these proposals.”