ParcelHero slams Philip Hammond over e-commerce tax plans

Chancellor of the Exchequer Philip Hammond’s decision to push for an international tax on web giants at the G7 Finance Ministers’ meeting today, and his earlier announcement of an ‘Amazon Tax’ are dogmatic and potentially dangerous to post-Brexit trade, according to ParcelHero.

ParcelHero’s Head of Consumer Services, David Jinks, comments: “The Chancellor claims the new tax will help save the High Street, but the chief problem facing town centre stores is not online shoppers; it’s Britain’s X-rated horror business rates: the highest in Europe.”

Hammond says his new Digital Services Tax will rake in £440 million a year by 2023, and will apply to international search engines, social media platforms and online marketplaces with a global revenue of £500 million and UK revenues of more than £25 million. But the US government has already made it known it believes the move would unfairly target American companies and is considering sanctions on France because of its similar initiative. “This is not a great position for the UK to start any new post-no deal Brexit trade negotiations,” says Jinks.

It will be the online shopper who pays the price, not commercial giants such as Facebook or Amazon, he adds. “While many people may indeed believe tax should be paid by global giants in the country where the money is spent, what is to stop ‘mission creep’ by future governments? How long before the digital tax starts to spread to smaller e-commerce companies? Governments frequently change taxes’ function subtly,” Jinks argues.

“A digital services tax is likely to be spread to UK e-commerce companies over time ‘to level the playing field’ with High Street stores; but we must not forget the most successful High Street retail businesses today have a mix of physical store and e-commerce sales. Multiplatform sales are the key to a thriving modern retail business. Will a new digital sales tax eventually apply to online sales for businesses with High Street stores as well as pureplay businesses? It’s certainly possible. In which case those retailers now weathering the business rates storm could be hit by even more taxes,” he concludes.