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been some positive signs starting to emerge Radical redesign of business rates
in the market, but the cost-of-living crisis As an alternative to a specific on-line tax,
and impending recession now pose a further the current business rates system could be
threat. In fact, Deloittes has forecast a further redesigned to make it applicable to both
30,000 net store closures are likely by end of store and on-line businesses. Whilst current
this year. business rates are essentially a property tax,
if they were redesigned as a tax based on
What can be done to reverse the trend? volumes of sales, this could be applied on an
Whilst the march towards an ever-increasing even basis across the sector. This would level
on-line retail sector looks set to continue, this the playing field and mean that on-line giants
doesn’t necessarily mean the end of the high like Amazon would have to pay taxes on the
street. Retailers are finding ways to blend same basis as their competitors.
their on-line offerings with their stores to
provide customers with the best in choice and Are local businesses the way of the future?
experience. As the cost of essentials soar, consumers are
cutting back on non-essential shopping, which
But what we need to see is the Government is continuing to hit the already challenging
undertaking a radical review of both the tax retail environment. However, with large player
and business rates systems to ensure that all such as Debenhams gone, which have been
companies, including giants like Amazon, are the foundation of many high streets over the
competing on a level playing field.
last few decades, the opportunity for small
independent retailers has really started to
The benefits of an on-line sales tax emerge.
One potential approach to rebalance the
market could be the introduction of an According to the British Retail Consortium,
‘e-commerce sales tax’, levied on all on- footfall remains 10 -15% below pre-pandemic
line sales. This could be balanced against levels, but independent retailers appear
a reduction in business rates for high street to have recovered more quickly from the
stores. Whilst this might not appear to be pandemic than retail chains.
in the consumers’ interests, any related
price increases could be offset against price This shift towards supporting local and
reductions for goods brought in high street independent shops started to gain traction
stores. Essentially consumers would be during the pandemic and local retailers are
paying for the convenience of buying on-line, continuing to call out for shoppers to support
whilst the potential for lower prices in store them during the current challenging times.
might encourage an increase in traditional Local campaigns are popping up across the
sales. country, such as the “shop small” campaign
in Exeter, where independent retailers are
turning to the local community to support them
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