You can’t support the digital age economy by taxing digital services

Responding to Chancellor Hammond’s conference speech the e-commerce delivery expert ParcelHero agrees today’s technical transformation of the economy is more important than Brexit; but says a new Digital Services Tax that hits UK e-commerce sites will slam the brakes on retail growth.

The parcel comparison company ParcelHero applauds Chancellor Hammond’s call in his Conservative Conference speech to embrace the technological transformation that is underway; but is dismayed if the Chancellor proposes to tax the power house of this revolution: the UK’s booming e-commerce sector.

Says ParcelHero’s Head of Consumer Research, David Jinks MILT: ‘There’s no doubt that the Chancellor was right on the money when he said that today’s technological transformation will be what future history books cover, not Brexit. But by announcing a new Digital Services Tax he could immediately put the brakes on the one growing area of retail. It needs to be made clear this will apply only to global giants such as Amazon, not to UK-based e-commerce sites.’

Continues David: ‘We agree technological change is transforming lives at a rate none of us have seen in our lifetime. We applaud Chancellor Hammond’s aim to ‘update our economy for the digital age’ and the appointment of President Obama’s former aid to look at the competition regime. But Chancellor Hammond says of the threats surrounding the digital revolution that: ‘3D printing will look more of a threat to someone who works for a parcel delivery company’. We disagree; a digital tax on UK e-commerce is a far more serious threat to home deliveries and the bargains all online shoppers enjoy, than 3D printing ever will be.’

Adds David: ‘Chancellor Hammond joked “You can’t order long-term change on Amazon Prime – order today and it’s delivered tomorrow.” Of course, the British High Street would prefer it if we didn’t order anything at all on Amazon Prime. But we must not introduce a blunderbuss tax that hits all e-commerce sites, including UK-based ones.’

‘We agree entirely that global internet giants must contribute fairly to the British economy for the money they make in the UK; but international agreements are being drawn up on this issue, likely to tax global sites at 3%.’

Concludes David: ‘Hammond should wait for the findings of his own newly appointed expert and forthcoming international legislation, rather than introduce a blunderbuss Digital Services Tax that sounds as if it will not discriminate between UK e-commerce websites, such as John Lewis, and global giants such as Amazon. It sounds as if it is the poor old British shopper may end up paying extra for ordering UK goods online. If he wants to restore the Great British High Street he should listen to the Business Secretary and look again at excessive business rates, rather than UK tax digital companies.’

 

For more information about the potential impact of a new Amazon Tax, see ParcelHero’s new Study:https://www.parcelhero.com/blog/news-updates/digital-tax-sinking-ship