Leading retailers warn of the impact of the online sales tax
For those working in the e-commerce fashion photography industry, it is never great to hear leading retailers talk negatively about potential tax legislation being implemented by the government.
Recently, a combination of industry bodies and retailers have come together to try and persuade Rishi Sunak, the Chancellor to reject a potential new sales tax aimed at online stores. An article in the Telegraph newspaper reports that this could lead to more “hurt, not help” for the high street, the very industry this tax is trying to protect.
So what did the letter say?
The letter, which was dated the 27th of May included signatories from ASOS, Currys and Gymshark. These powerful players in the world of e-commerce, fashion and retail stated their concern about how such a sales tax would end up causing households to suffer even more from rising inflation and the cost-of-living crisis.
They claim that adding a new tax to the retail sector is not the best approach. The letters refer to the significant burden of business rates and how these need to be reformed.
Why was this letter sent in the first place?
There has been a three-month government consultation on the topic of a sales tax aimed at online sales. The question they are trying to answer is whether this kind of tax will help reduce the challenge that business rates cause to traditional brick-and-mortar retail stores. It should be noted that the government’s treasury department has claimed the consultation is only at an exploratory stage and no decision has been made.
Who else has voiced concerns?
Interestingly, Marks and Spencer have raised concerns about the implementation of such a tax. Perhaps one of the most recognisable brands connected to the high street, this is a significant response and their claim that it will reduce the money available to then put back into investments in the high street should be listened to with care.
It will be interesting to see the thoughts of suppliers, designers and creatives on this topic. For those working in e-commerce fashion photography, and ghost mannequin photography, for example, the demand for services to both online and traditional retailers could be hit by firms not being able to invest funds in their business. However, it may be that this does allow some of those struggling with business rates to invest more in their bricks-and-mortar stores if such a tax achieves the government’s stated goals.
What’s next?
The simple answer here is that we need to wait and see what the outcome of the current consultation is. The wheels of government do not move particularly quickly and there is still time for industry professionals to try and have their say. However, it is clear enough to see that many from the world of retail, fashion photography and design will be hoping the final choice doesn’t add to the increasing struggles we’re all facing.
