Online tax could help a high street facing ‘bleak’ prospects, MPs say

The government must seriously consider an online sales tax and change unfair business rates as the high street faces an “increasingly bleak” future, MPs have urged.

The rates stack odds against retailers on a high street which needs reform after a string of prominent failures, the Housing, Communities and Local Government Select Committee found.

Read more: The secret to saving the high street? Fewer shops

The group warned city centres could become “ghost towns” unless radical action is taken.

“The burden of business rates falls unfairly. High street retailers are paying more than their fair share … while online retailers are not contributing enough.” it said.

The proposals include an online tax, VAT increase, a sales tax and taxes on deliveries and packaging.

Read more: Revealed: The UK's emptiest and busiest high streets

But retailers must also take responsibility and play to their strengths, including personal interactions and convenience.

Brigid Simmonds, head of the British Beer and Pub Association said: “The current business rates system penalises businesses like pubs for investing in their property, as improvements lead to rates rises.”