Andy Burnham urged to introduce 2% online sales tax to cut business rates
Andy Burnham urged to introduce 2% online sales tax to cut business rates . A coalition of business organisations is calling on Andy Burnham to introduce a two per cent levy on all online transactions as part of wider reforms to Britain's business rates system
A coalition of business organisations is calling on Andy Burnham to introduce a two per cent levy on all online transactions as part of wider reforms to Britain's business rates system. The Real Rates Reform Alliance, which is due to launch on Tuesday, said the proposed levy would generate enough revenue to reduce business rates for physical shops by 37 per cent. The group said the proposals would replace what it described as the current "broken and unsustainable" business rates system with a hybrid model. According to the alliance, the reforms would generate slightly more than the £34billion currently raised through business rates each year. StoriesVideosYour SayThe coalition includes UKHospitality, the Institute of Directors, the Association of Town and City Management, the Music Venue Trust and the British Independent Retailers Association. Together, the organisations represent more than 28,000 businesses across the UK. The alliance argues that the current business rates system places a disproportionate burden on high street businesses compared with online firms. Its analysis found digital businesses contribute around nine per cent of total business rates despite accounting for about one-fifth of economic activity. Andy Burnham was previously blocked from standing in the Gorton and Denton by-election amid concerns of a leadership challenge |PABy comparison, the retail and hospitality sectors pay 34 per cent of business rates while representing around nine per cent of the UK economy. The group said this creates an uneven playing field for bricks-and-mortar businesses competing with online retailers. Ros Morgan, chief executive of Heart of London Business Alliance and chair of the Real Rates Reform Alliance, said: "Business rates should support growth, not hold it back. "She added: "Andy Burnham has already acknowledged the current system isn't fair and talked about levelling the playing field between online and some physical businesses. We want him to go further. "LATEST DEVELOPMENTS:HMRC alert: Self-employed and landlords set to face new Labour monthly payment tax systemAndy Burnham inheritance tax plans could raise death duty to 50% and cost families £53,000 moreDWP confirms 'biggest pension reforms for a generation' as millions to get £29,000 retirementResearch commissioned by the alliance found 55 per cent of businesses view business rates as a significant or moderate cost affecting their operations|GETTYMs Morgan said the alliance wants to work with the Government on "lasting reform that protects high streets, supports investment and creates a fairer tax system for the modern economy". The Savanta survey of 1,000 businesses found 17 per cent had reduced staffing levels because of business rates, while 31 per cent said they had increased prices. Mr Burnham, who is widely expected to become prime minister as early as next week, has already pledged to reform the business rates system. Plans announced during the Makerfield by-election campaign included increasing the threshold for full small business rates relief from £12,000 to £18,000 in rateable value. The upper limit for tapered relief would also rise from £15,000 to £21,000. Mr Burnham has also proposed charging higher business rates on large distribution warehouses used by major online retailers, including Amazon. However, the alliance said further reform is needed to create a fairer tax system for businesses. Anna Leach, chief economist at the Institute of Directors, said: "The time has come for fundamental reform. "