Hammond edging towards imposing online retailers’ tax

Irving Hamilton
August 12, 2018

Speaking to Sky News, Chancellor of the Exchequer Hammond said that as the UK's shopping habits are changing, high street retailers who don't have an online presence are paying an unfairly higher share of tax.

In his strongest intervention on the issue, Philip Hammond said he was thinking of introducing a special retail tax on online businesses, dubbed the 'Amazon tax, ' without full worldwide co-operation. The government legislation is not keeping up with the change in technology.

Dr Ian Campbell, interim executive chair of innovate United Kingdom, said: "Today's significant announcement means our world-class network of catapults can build on their success and continue helping thousands of businesses across the United Kingdom to undertake innovative R&D".

Mr Paphitis responded: "Taxation as it stands. does not work with the way technology is moving".

"Today's £780 million investment will support innovators across the country to create the technologies of the future, and the better, highly-paid jobs we urgently need".

Hammond said the changing nature of the high street mean there will in future be less retail, and more leisure, bars and community facilities.

Going into further detail on the potential move, Hammond said that if necessary, the United Kingdom could go ahead with a temporary new tax measure, to help support traditional high street retailers and ensure online etailers, pay a fair share.

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If there was no worldwide agreement, the Chancellor said the United Kingdom "may have to look at temporary tax measures to rebalance the playing field" until an global consensus was reached.

He said this could include a tax on online platform businesses based on value generated, as has been mooted by the EU.

The comments came as department store House of Fraser was placed in administration, before being bought by sports retailer Mike Ashley.

"That's certainly something we'd be prepared to consider".

He made the announcement as figures showed the UK's GDP (gross domestic product) was up 0.4% between April and June, compared with the first three months of the year.

"It's a fair and sensible pragmatic offer to the Europeans".

"Doing a deal like Chequers will probably allow the economy to grow at broadly the same rate as inside".

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