The chancellor has revealed he is considering a special retail tax on online businesses to help redress the balance with those operating on the High Street.

In a Sky News interview, Philip Hammond said that the UK is changing shopping habits, with more of us buying things online, which has knock-on effects for bricks and mortar shops.

"We're very clear that you have to support the high street through that process of change,” he stated. "The nature of the offer on the high street is going to change over time, there's going to be less retail, more leisure, bars, community facilities."

Although Hammond again dodged any plan to reform business rates - as called for by the British Retail Consortium recently - he indicated that the way online retailers are taxed needs to be reviewed, as they tend to pay less than traditional retailers.

"We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online," he said. "That requires us to renegotiate international tax treaties because many of the big online businesses are international companies.”

Hammond stated that if international agreement are not possible, the government may have to look at temporary tax measures to rebalance the playing field.
"The EU has been talking about a tax on online platform businesses based on value generated,” he explained, adding that this would be considered.

His comments followed House of Fraser being placed in administration on Friday morning, only to be bought by Sports Direct’s Mike Ashley.

A number of high street names have had to shut down in recent months after being faced with high costs and low sales numbers, prompting campaigners to warn of the death of the high street.

This follows several well-known High Street brands going out of business this year, or putting together Company Voluntary Agreements (CVAs) to rescue their businesses.

Last month, the government appointed a panel of experts to diagnose issues that currently affect the health of the UK’s High Streets and advise on practical measures to help them thrive now and in the future.

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