Online channel firms have slammed calls for the government to impose a tax on web-only retailers to level the playing field for traditional bricks-and-mortar operators.
The pending US Marketplace Fairness Act 2013 – which would enable state governments to collect sales taxes from online or remote sellers with no physical presence in the area – has sparked debate in the UK.
Sainsbury's chief executive Justin King is one of a number of high-profile high street retailers that have warned that bricks-and-mortar business rates are crippling traditional players. He has called for the tax burden to be rebalanced towards online firms, which he thinks should pay more tax to offset the burden of rates on traditional retailers.
However, such calls have met with hostility from e-tailers, including those in the IT channel.
According to the British Retail Consortium, business rates cost UK firms around £7bn, but Roger Butterworth, director of online hardware retailer and VAR MobiCity, said the recent debate is just another sign that the high street is dying.
"This is the normal rubbish coming from the high street, which has an outdated, stupid business model," he said.
"Online is just a better business model, and it would be wrong for the government to try and tax a new, better way of doing business [to protect] the stupid, old way. It's not the government's position to make old-fashioned models competitive. People whining about the death of the high street need to get over it – the high street is dead."
Cas Paton, managing director of OnBuy, argued that high street shops get their money's worth from business rates.
"Any professional, new online retailer has to undergo a significant amount of marketing because the difference between the high street and online is when you launch anything online you're a complete unknown," he said.
"There is no passing trade so the chance of success in the saturated online market is much less than launching on the high street, where you get passing custom. When you are established, your overheads are driven down but becoming established is a much higher risk."
In recent years, tax avoidance in the UK has been a hot topic, with firms such as Google, Apple and Amazon coming under scrutiny for what they pay.
Chris Holgate, director of Refresh Cartridges, said the government should focus on online giants paying their fair share of tax as it is, without considering new measures.
"The main issue isn't that online companies aren't already subject to what I would consider a decent amount of tax, it's that a large number of them are getting away with paying practically nothing through various arrangements involving multiple companies in several countries.
"If everyone paid what they're supposed to under current legislation, the playing field would be level. It's not right to penalise companies just because they're not bricks-and-mortar based as it's their prerogative. The government should be focusing on ensuring that current legislation is tightened so that no companies avoid paying their fair share."
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