A Times article published today suggesting that a letter from Mel Stride MP financial secretary to the Treasury written to Nicky Morgan MP, chair of the Treasury Select Committee has effectively rules out the introduction of an online sales tax; a tax most notably called for by Mike Ashley and a number of other leading retailers in their oral evidence to the Housing, Communities and Local Government Select Committee high streets and town centres 2030 inquiry in early December. Treasury “sources” are quoted as saying that they have not ruled anything out yet. The tone and content of the article is persuasive but not absolutely conclusive.
Mr Stride’s letter is said by the Times to say there is “high risk” that any such tax would breach the (EU) bloc’s state-aid rules. The article points out that while we are due to leave the EU at the end of March, under the draft withdrawal agreement Britain has accepted “dynamic alignment” with Brussels on state-aid rules.
The inference is that EU state-aid regulation could/would still apply post 29 March, during any subsequent period of negotiations on the detail of the withdraw and depending on outcome of those negotiation probably well beyond that. This of course assumes that we don’t simply leave without a deal.
Given a further period of Brexit negotiations the financial secretary’s statement does appear to makes it unlikely that any new sales tax will be seriously considered, let alone introduced, at least in shorter term. Some analysts meanwhile are suggesting that without some radical actions, like an online sales tax, time is already fast running out for traditional high street retailers. Continued lobbying efforts to level the total cost base between online and traditional retail, whether that is via sale taxes, revision of business rates, realignment of high street rents or by a mix of these and other means, need our support in order to help ensure we retain a key element within the attraction of many of our more urban, resort, town and City destinations.