Philip Hammond has hinted at possible tax changes to ensure high street retailers are able to compete with online rivals, hours after House of Fraser was rescued in a last-ditch deal.
“We want to make sure that the high street remains resilient and that we also make sure that taxation is fair between businesses doing business the traditional way and those doing business online,” the Chancellor told Sky News.
Mr Hammond’s comments come as high street retailers reel under pressure from soaring costs, including business rates.
The Chancellor said that a change in the system “requires us to renegotiate international tax treaties because many of the big online businesses are international companies”.
He added: “The European Union has been talking about a tax on online platform businesses based on the value generated. That’s certainly something we’d be prepared to consider.”
Several high-profile retail chiefs have called publicly for a level playing field between bricks and mortar firms and online giants such as Amazon in terms of tax.
They have pinpointed business rates as their biggest bugbear, labelling the tax archaic and not fit for purpose in the light of online competition.
Amazon pays a minuscule amount in business rates despite its sales dwarfing those of high street retailers with similar property bills.
House of Fraser was bought out of administration by Mike Ashley’s Sports Direct on Friday and is the latest in a long line of well-known names to hit trouble.
Poundworld, Maplin and Toys R Us have all gone bust this year, with several other firms such as Mothercare, Carpetright and New Look undertaking store closure programmes.