I have been musing on ideas, sometimes superficially attractive, that make things more expensive to buy. One of those ideas currently in circulation is the idea of an “Amazon tax” for goods bought online, the argument being that this might help “save the high street”. Today Colliers International, a property consultancy, has suggested that online retailers should pay a higher rate of VAT than ones with a physical presence do.
This is one of those things that seems superficially appealing, until you start to think about the detail. Consider a pensioner living in a village, covered by erratic bus routes, who has no car. What we would be doing is penalising such an individual, who is reliant on online purchasing, in order to support those who have cars and/or live in cities, who are generally going to be better off anyway.
A far better idea would be to reduce business rates to something resembling the actual cost of the municipal services that they use. When you think consider it properly, high levels of rates are a disincentive for businesses to have a high street presence. What government, both national and local, is doing is using business rates as a source of general income, rather than doing what they should do, which is increase taxes on some combination of income and wealth. This has the consequence of pushing up prices for everyone who shops on the high street (or indeed the retail park), instead of directing the tax burden at those with the greatest ability to pay.
I am also rather puzzled about what would happen with retailers who both trade online and have a physical presence. I have been known to stand in John Lewis, looking at an item I want, but which is either too heavy or too inconvenient to carry home. What I do is open up the JL app on my phone and order it on there to pick up from their out of town collection point the next day. Does anybody think it makes sense that I should pay more for taking the collection option?