Brexit has triggered 'explosion' of investment says Rishi Sunak
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Under a so-called ‘Amazon tax’, the Treasury hopes to recoup up to £2billion for the Exchequer. Although the new tax will be announced beyond the Budget, Treasury officials have begun to scope out the details of the new tax which could be set at two percent. It is thought the new tax may include a levy on goods bought online and a tax on consumer deliveries.
One Government source told The Daily Telegraph: “The plans are at a very rudimentary stage but clearly the direction of travel has been set now.”
A tax on online sales was first put forward by Philip Hammond during his time as Chancellor.
Despite the additional £2billion fee for the Treasury, there have been calls to adjust business rates for retailers across the country.
Amber Mace at EY said: “The Government may well need more time to conquer the challenge of designing an online sales tax that doesn’t just add further burdens onto the sector and deter investment in e-commerce.”
She also added that businesses want a new tax which closes the gap between high street and online retailers.
A Treasury spokesman said: “Our review into business rates will conclude this autumn.”
Business rates are a charge for non-domestic properties such as shops, offices, pubs, and warehouses.
Businesses have warned paying the fee has been crippling, especially during the pandemic.
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The Confederation of British Industry and 41 other industry groups have called on the Chancellor to overhaul business rates in order to increase investment.
They called for business rates to be reduced in order to create more jobs and push more money into decarbonisation.
CBI chief economist Rain Newton-Smith said: “Action to get investment flowing into and around the UK is sorely needed to reinforce our recovery.
“The Chancellor has an opportunity to fix this, starting with fundamental business rates reform at the Budget and Comprehensive Spending Review.
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“By setting out an approach that attracts investment, he can equip the UK with the tools it needs to secure the high-wage, high-productivity and high-skill economy of the future.
“With up to half of business investment potentially subject to business rates, it has become a tax on investment.”
Two Tory MPs from the ‘red wall’ have also called for business rates to be cut in the upcoming Budget.
Jake Berry, chair of the Northern Research Group (NRG) of MPs said without cutting business rates, the party could risk losing support in key areas.
He said: “The public are clear: the burden of tax on bricks-and-mortar retail is too high.
“Without a cut in business rates at the Budget we risk losing support in our most marginal seats, including in the North and the Midlands.
“Cutting rates would be a huge boost to our local communities and would show quick delivery of the central mission of this government: levelling up.”
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