British Chambers of Commerce President Andy Haldane told The Guardian he wants tax incentives shifted toward physical shops and smaller firms, putting business rates on the agenda before Britain’s Oct. 28 Budget.
In an interview published Thursday, Haldane argued that the tax system favors digital businesses over physical retailers and larger companies over smaller ones. In the Guardian interview, Haldane said business rates weigh heavily on small shops and called for a fundamental review. The Guardian also reported that Haldane favored higher taxes on online sales than in-store purchases, but his published remarks did not set a rate or describe a specific levy.
Online sales accounted for 28.8% of total retail sales in Great Britain in August 2026, up from 28.4% in July, according to the Office for National Statistics (ONS). In England, eligible retail, hospitality and leisure properties have lower 2026-27 business-rates multipliers: 38.2 pence per £1 of rateable value below £51,000 and 43 pence for values from £51,000 to £499,999. The multiplier is 50.8 pence for properties with a rateable value of £500,000 or more.
A June 2026 consultation by HM Treasury and HM Revenue & Customs (HMRC) considered making online marketplaces responsible for VAT on sales by UK businesses using their platforms, including domestic retail goods and takeaway food. The proposal addressed VAT noncompliance, and the consultation sought views on limiting effects on businesses that do not have to register for VAT.
The Institute for Public Policy Research (IPPR) has separately proposed a 2% tax on remote sales and a 1% tax on click-and-collect purchases, exempting a business’s first £500,000 in annual remote sales. IPPR estimates the plan could raise at least £1.5 billion a year. Under its proposal, remote sales above the exemption would be taxed, with the revenue funding rate cuts for eligible retail, hospitality and leisure businesses in England.
The marketplace VAT consultation and IPPR’s proposed sales tax are separate measures; neither has been announced as government policy. The Budget is scheduled for Wednesday, Oct. 28.
