UKHospitality calls for online sales tax and reduced business rates

In response to the Government’s consultation on the introduction of an online sales tax, the trade body said that due consideration must be given to property-based industries such as hospitality.

UKH also called for the tax to be ear-marked to provide targeted reduction for business rates, citing them as a barrier to post-pandemic recovery. According to UKH, the industry overpays by £2.4bn per year.

It also called for rates reductions to be achieved via a reduced multiplier for all relevant businesses and not focused solely on smaller businesses, as this is done through the Small Business Rates Relief.

The online sales tax must involve exemptions for services that are ordered online but involve delivery from a physical presence that delivers a service in person so as to avoid stealth double-taxation, according to UKH. It also says the system must be designed with an allowance below which no tax is levied.

UKHospitality Chief Executive, Kate Nicholls, said: “We are calling for an online sales tax to be introduced in the UK to cut business rates for high-street venues and deliver economic regeneration across the UK.

“The basis for an online sales tax must not stifle innovation and the development of online business models but must support our British high streets. This is why Government must ensure that an online sales tax avoids double taxation for businesses that deliver product on-premise, such as pubs, restaurants and hotels.

“The taxation system has lagged way behind the changes to the modern economy and while we have long known that business rates is arcane and outdated, there is also an absence of an equitable system of justifiably bringing the digital economy into taxation.”