Chamber warns about ‘Trojan horse’ threat behind new tax proposals

The county’s leading business body today (May 25) warned that initial government proposals to tax big online retailers could have serious implications for Suffolk’s smaller companies which sell goods and services online.

Suffolk Chamber of Commerce has responded to the Treasury’s initial consultation into an Online Sales Tax (OST), proposals for which were included in the recent Queen’s Speech and come after it abandoned its promised review of the much-criticised Business Rates system.

Paul Simon, head of public affairs and strategic communications said: “At first glance, the OST appears to be aimed at major internet retailers that are perceived to not be paying their fair share of tax – in part because they do not have high street locations which attract higher business rateable values than their out-of-town equivalents.

“Yet, we are worried from how the consultation is worded that any future OST proposals could potentially impact on every single business which transacts online or even over the phone. This Trojan horse aspect is very worrying, not least as since the Covid-19 pandemic, far more smaller enterprises than ever before have developed an online presence to grow their business and make it more resilient.

“Given our county’s growing strengths in warehousing and allied sectors, we are especially worried that an OST would have a disproportionate potential impact on the Suffolk business community and our members in particular.”

In its response to the Treasury, Suffolk Chamber has said that would like to see comprehensive business rates reform rather than the OST.

However, if the government does decide to introduce an OST, the Chamber is calling for a total exemption for SMEs. The threshold for exemption could be based on turnover or an equivalent metric, in a similar way to the setting of the threshold for the Apprenticeship Levy based on payroll.

Suffolk Chamber has written to all seven of the county’s MPs asking for their support and has teamed up with its national body, the British Chambers of Commerce with further evidence once the results of the consultation have been published later in the summer.

Mr Simon added: “We are very vigilant on this. Too many growing Suffolk firms risked being penalised by an OST that doesn’t exempt smaller going concerns.”

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