OST should not fund relief to retail rates, says CIOT

Responding to the Treasury consultation on proposals for a new online sales tax (OST), the CIOT highlights several key issues:

• An OST should not be introduced to fund relief to retail rates (‘RRR’). Designing a new tax to remedy perceived unfairness in the business rates system is an ‘inappropriate and disproportionate way of solving the issue’.
• The government should as a first step explain the problems with business rates that need addressing, including the potential for any reduction to be offset by increases in rent by landlords.
• The complexity of a tax that requires all transactions to be deemed in or out of scope should not be underestimated. For some, this will be a complex, costly and time-consuming exercise.
• Any OST should apply uniformly across the UK to reduce scope for further complexity.

In a separate response, the ATT urges the government to reconsider, suggesting that:

• an OST may not be the best way to ‘level the playing field’ between online and high street retailers;
• likely complexity will prove a headache for businesses and HMRC for years to come; and
• smaller retailers should be excluded.