Chancellor's consideration of online business tax welcomed by hospitality sector

13 August 2018 by
Chancellor's consideration of online business tax welcomed by hospitality sector

Chancellor Philip Hammond has said he will consider the introduction of a tax on online businesses, in a move welcomed by the hospitality industry.

The chancellor's comments have followed a spate of high-street closures across retail and hospitality, with many struggling businesses citing onerous rates and rents.

Hammond told Sky News: "We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online," he said.

"That requires us to renegotiate international tax treaties because many of the big online businesses are international companies.

"If we can't get international agreement to do this we may have to look at temporary tax measures to rebalance the playing field until we can get international agreements."

UKHospitality chief executive Kate Nicholls welcomed the news. She said: "The taxation system must evolve to keep pace with the impacts of the rapid rise in digital business so the chancellor's proposals are certainly welcome.

"High-street businesses, particularly hospitality businesses, are facing an enormous tax inequality and the government desperately needs to take proactive steps to address this to help support vital businesses in the heart of communities.

"Hospitality businesses are at a particular disadvantage, paying 10% of all business rates despite only generating 3% of turnover. As it stands, the hospitality sector is overpaying business rates by £1.8b per year.

"Revenues from taxing digital companies can be used to slash the burden on high-street properties hardest hit by business rates, while the government reviews the tax system and implements one that is fit for the 21st century."

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