Tesco urges Chancellor to introduce two per cent online sales tax to help the high street

TESCO has urged the Chancellor to introduce a 2 per cent online sales tax to generate a £1.5 billion windfall for the high street.

The store giant claims the proposal would raise enough cash to cut the business rates bill of every shop in the country by a 20 per cent.

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Tesco is calling for a 2 per cent tax on online sales to help high street stores[/caption]

In a submission to the Treasury Select Committee the group reveals it pays £700 million a year in rates – a number that has doubled since 2010.

Tesco would pay the new sales duty – but chief exec Dave Lewis argues the tax would “level the playing field” by also asking pure online rivals such as Amazon to cough up.

Critically Tesco argues that Philip Hammond is wrong to worry the tax would penalise shoppers buying online as web giants pass on the cost.

Tesco claims customers are already being hit as shops are forced to pass on the eye-watering increases in business rates.

Tesco chief Dave Lewis said: “The business rates system is increasingly outdated and in need of urgent reform.

“The burden of rates has become unsustainable in a retail sector that saw 7,500 net store closures last year.

“The introduction of an online sales levy would create a level playing field, incentivise investment and do so in a way which is revenue neutral for the Government.”

The Tesco chief called for an “Amazon Tax” last year and in 2015 warned against a ‘lethal cocktail’ of extra costs.

The cross-party Treasury Select Committee is looking at the huge impact of changes to business rates policy as well as alternatives to the property-based tax.

Robert Hayton, the head of UK business rates at property advisers Altus Group, welcomed Tesco’s proposal.

He said: “There is now an overriding consensus of opinion that the tax playing field must be levelled, given the tax-to-turnover ratio disparity, whilst the proposal ensures additional revenue is ring-fenced for the good of the entire sector.”

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Tesco boss Dave Lewis says the business rates system is outdated and in need of reform[/caption]

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Philip Hammond worries the tax would penalise shoppers buying online[/caption]

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