Shoppers face online sales tax as Rishi Sunak looks to pay off huge Covid-19 debt

Shoppers face online sales tax to pay off Covid-19 debt as Rishi Sunak looks for new ways to plug the financial hole

  • Rishi Sunak is trying to raise money to pay off the UK’s pandemic debt pile
  • A minister said an online sales tax could be announced at the budget
  • A levy of 2 per cent on all online goods could raise £2billion a year 

Shoppers may have to pay more for items bought online under plans for a tax that could be introduced in the Budget, a minister warned yesterday.

Jesse Norman, Financial Secretary to the Treasury, said an online sales tax is a possibility as Chancellor Rishi Sunak tries to raise money to pay off the UK’s pandemic debt pile.

‘When we thought about business rates in the recent consultation, we touched on the idea of an online sales tax and just put that out there for discussion and evaluation and we’re still reflecting on that,’ he told MPs.

Shoppers may have to pay more for items bought online under plans for a tax that could be introduced in Rishi Sunak’s Budget

It was the clearest hint yet that Mr Sunak might look to raise taxes at the Budget in March. 

Mr Norman did not give any detail about what an online sales tax might look like, but the idea was first suggested when the Treasury reviewed business rates in July. 

There has been speculation that a levy of 2 per cent on all goods bought online – potentially raising £2billion a year – could be implemented.

Critics say the tax will push up prices for consumers. Online retailers have thrived during the lockdown with customers unable to visit non-essential shops for months. 

Jesse Norman (pictured), Financial Secretary to the Treasury, said an online sales tax is a possibility

Jesse Norman (pictured), Financial Secretary to the Treasury, said an online sales tax is a possibility

Internet sellers have also benefited because they do not need to rent expensive properties on the high street.

Mr Sunak is believed to be keen to start filling the vast hole in the Government’s books soon. 

Various wealth and property tax rises have been mooted in order to fill the nation’s coffers but Mr Norman was quick to dismiss the ideas.

There has been speculation that a levy of 2 per cent on all goods bought online – potentially raising £2billion a year – could be implemented

There has been speculation that a levy of 2 per cent on all goods bought online – potentially raising £2billion a year – could be implemented

He told the Commons Treasury committee: ‘The Chancellor is looking to build strong sustainable finances when circumstances permit that. 

‘That seems to me to be a judicious recognition that some taxation could impede growth and damage our recovery.’

Former prime minister Tony Blair also urged the Government to stay away from wealth taxes, telling the Bloomberg news agency yesterday that they never work in reality.