Is an "Online Sale Tax" on it's way?
The Office of Tax Simplification (OTS) has been asked to look at the potential to introduce an "Online Sales Tax" to move the tax system inline with changing consumer trends.
The general scope of the consultation would be to see if an online sales tax could be used to re balance tax revenues against rate reliefs in the retail sector, as people move from high street retailers to online shopping
No final decision has been made by the treasury yet, but an online sale tax (which should be noted is different to a digital sales Tax) would be used to offset some of the approximate 7.5 billion raised through business rates. Under consideration would be form, rate and scope and the definition of what constitutes an online sale, given the range of ordering, payment, collection and delivery options that are available to the online shopper.
The consultation document has 40 questions and includes questions on things such as whether an OST tax should be limited to goods or include services, should it be a percentage or flat fee, how would it interact with VAT and how would returns effect it.
There is clearly a lot of work to be done before the treasury can make a decision on an online sales tax, however it is clearly in the scope of future changes to the tax system and we will update effected businesses as and when there are any developments.