The UK Proposes Online Sales Tax: A Sign of Things to Come?

Posted on 16 May 2022

The UK government announced a public consultation on an online sales tax. Through the proposed tax, the government aims to “rebalance the taxation of the retail sector between online and in-store retail.”

Retailers in the UK are concerned that the retail playing field is not even, as brick and mortar retailers must pay relatively high rates on commercial property. An online sales tax could, in principle, address those concerns.

On the other hand, some groups insist the new online tax would unfairly harm online sellers. Given the issue’s complexity, the UK government is opening consultation to the public until May 2020.

The new tax would also be a significant source of revenue. According to the official consultation document, a 1 per cent online sales tax could raise approximately one billion pounds per year.

Are E-Commerce Businesses Adapting to Changing Tax Rules?

E-commerce is all about being fast and flexible. Online sellers compete on speedy delivery and convenience.

But while they may be innovators in technology and digital marketing, e-commerce retailers risk operating in an outdated tax paradigm.

After all, selling online involves its own set of VAT compliance issues. More to the point, tax authorities are still updating their rules to meet the challenges of the digital economy.

And that means anyone who operates a digital business needs to pay close attention to what’s happening in the world of VAT.

From VAT on digital services to distance selling rules, there’s a good chance that you will have to manage VAT in one or more countries once you take your business online. And now there’s the prospect of special online sales taxes in the UK and possibly many other countries.

VAT Technology Designed for the Digital Economy

But it’s not just about knowing what your VAT obligations are. You need the technology and support to adapt as the VAT rules change.

The alternative: you risk fines and penalties. You could even face criminal charges for VAT evasion and be barred from operating your business.

Don’t take any chances. Get in touch with Zee for personalized support, backed by proprietary VAT technology that makes compliance simple, fast and cost-effective.

Contact Us!