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Calls for online shops to have tax increase

Retail bosses are calling for an increase in tax for online shops in a bid to save the high street, according to

Ian Cheshire, the group chief executive of Kingfisher, pointed out that ordinary retail stores are taxed significantly more than online shops.

Business rates for floor space see companies lumbered with high tax bills but online businesses don't have the same need for retail space - in some cases, only needing a few warehouses.

Retail stores are dealing with higher outgoings including retail staff wages, an expense not necessarily incurred by online businesses. Coupled with the high tax levels, many household names including Jessops and Comet have gone out of business altogether.

Addressing the tax gap between online and retail could help to secure money for high street stores, allowing them to continue running and competing against internet-based businesses. reports Mr Cheshire as saying that the government is losing out on a big source of income by not reforming the tax system to incorporate online businesses.

He said: "The balance between online and offline is skewed. If you are not careful there will be a lot of new activity not generating tax.

"As the proportion of internet sales grows, the amount of tax raised by business rates will fall if they continue to apply only to a shrinking base of physical stores. It is unsustainable."

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