LB First: Could internet sales tax 'level the playing field' for our struggling town centres?

In recent weeks I've been hearing from quite a few of our small, independent businesses, how trade has been very quiet, with one saying, sadly, that they are going to have to close. Without doubt it's been a tough time for many town centres with falling footfall, rising overheads and people feeling the squeeze from the cost of living, mostly caused by the wars in the Middle East and Ukraine.

LB First is a voluntary, not for profit, community group that champions our town centre businesses and market traders and encourage people to shop locally. | Gennaro Borrelli

placeholder image — LB First is a voluntary, not for profit, community group that champions our town centre businesses and market traders and encourage people to shop locally. | Gennaro Borrelli

With people eagerly awaiting the Budget it was encouraging to hear the president of the British Chamber of Commerce and former Bank of England chief economists, Andy Haldane, call for Chancellor, John Healey, to tax internet sales at a higher rate than those in physical shops to help "level the playing field" for struggling high streets. He urged the government to reverse the declining fortunes of town centres across the UK by launching a realignment of the tax system away from favouring online sellers, alongside a review of business rates and measures to turbocharge devolution.

The Prime Minister has said that he has made town centres a top priority after years of decline that have left many hollowed out, with shops closed and buildings boarded up.

If a tax crackdown on online market places such as Amazon and eBay was brought in it could raise up to an extra £1bn by forcing them to collect VAT on behalf of large scale sellers based in the UK as well as abroad, money that could be used to raise the rent valuation threshold at which businesses start paying rates.

A report by the IPPR think-tank has called for an online sales tax to fund lower high street business rates along with the Federation of Small Business and deemed by Andy Haldane as "critical of boosting the economies of struggling towns."

With cuts in business rates for pubs, clubs and live music venues from next April already announced along with the introduction of community ownership funds and a £5.8bn "pride in place" strategy to hand more money and power to local leaders to support regeneration, could this be the start of our high streets and town centres being revitalised? The feeling among many small business owners is it couldn't come a moment sooner.

For more information contact Gennaro on 01525 854273 and LB First Facebook page.