This is the question MP’s were called to consider at Westminster this week as business owner Mike Ashley suggested that online businesses should be taxed 20% in order to save High Street businesses.
Tax Online Businesses Or The High Street Will Be Dead By 2030
Mike Ashley is owner of Newcastle United FC, Sports Directs and more recently, House Of Fraser and this week he met with MP’s to explain how he would approach saving the High Street.
In this meeting his language captured the languishing state of the UK’s High Street – insisting that the internet is killing it.
He pointed the blame at landlords too, how they are charging too much for businesses renting premises, however the main target was the world wide web.
His statement was clear: tax all businesses if they make 20% of their profits online, or the high street will be dead by 2030.
Oxford Street and Bond street will be all we have… outside of London it will be a ghost town, he explained.
The Government Aren’t Doing Enough
Mike Ashley’s strong plea expands on Chancellor Phillip Hammond’s announcement at the latest Budget.
Hammond wants to tax large online businesses, the likes of Facebook and Google, who hold lots of data on UK customers.
However, there is yet to be an agreed maximum amount by other countries that can be applied internationally.
This prompted Hammond to suggest that the UK stop waiting and just get the ball rolling.
Mike Ashley’s proposal though, extends this to all businesses who do 20% of their business online – no matter their size.
Should We Expect Such A Tax To Come Into Effect?
Many small businesses set up online to avoid the hefty rent costs, whereas larger businesses are closing stores and focusing their sales efforts online as that is where the demand is.
The reason why is obvious: the internet provides more exposure, at less cost and it’s fast, easy and efficient. It’s how most customers want to do business!
So, the big question for Mike Ashley is – will this change?
Judging by the way consumers have increased their spending online over the years, it looks heavily unlikely.
Does this mean that people will stop shopping in the high street?
Of course not!
There is a social aspect of shopping on the high street that people enjoy, but the majority of people are choosing to spend their time elsewhere.
Taxing online businesses seems like a viable option, but as Mike Ashley states himself: the high street is dying. Taxing online businesses to keep high street stores open isn’t saving them, it’s just putting them on life support.
A better alternative looks like it needs to be made.
What do you think?
Should High Street businesses be given a chance, at the expense of online businesses – no matter their size?
Or should High Street businesses be forced to adapt? Work and partner together?
We’d love to hear your opinion on the state of the UK’s high street and how you’d solve the problem. Is it solvable? Let us know on social media below!
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