Avalara Taxrates > Blog > Sales Tax News > UK: Online Tax Would Contribute to Society - Avalara

UK: Online Tax Would Contribute to Society

  • Jul 18, 2013 | Gail Cole

 United Kingdom: Should the contents of virtual grocery contents be taxed?

One of Britain’s largest supermarkets is planning to go online through a joint venture with Ocado. So is Dalton Phillips, chief executive of Morrisons, crowing over the fact that online sales won’t be taxed? No he is not. In fact, quite the opposite is true.

Mr. Phillips has called for the playing field between internet retailers and high street retailers (Main Street retailers in the United States) to be leveled. It’s a question of fairness, even if it means Morrisons will have to pay more taxes. “We’re moving into the online space, so we’ll have to pay our contribution,” he told The Daily Telegraph.

To Mr. Philips, taxing online retailers makes sense. “As more and more sales migrate online, it seems to me intuitive that you would tax the online channels as well.” Failure to do so would not be logical. It would also increase the tax burden for brick-and-mortar retailers. Business tax rates in the United Kingdom are based on property rents, and they’ve been on the rise. While they’ve increased thirteen percent in three years, “internet firms are exempt.”

Britain is not the only country to wonder whether or not online sales should be taxed. This spring, the United States Senate overwhelmingly approved the Marketplace Fairness Act of 2013 (MFA), which would allow states to require certain remote retailers to collect sales tax once tax simplification measures have been enacted. MFA is currently being held on the table of the House, which reminds that the issue is far from settled.

How does your business handle sales tax?

photo credit: getjustin via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.