I recently received a letter from Devon-based independent retailer, Tristan Cook, owner of Sparkworld ltd, who, feeling very strongly about the demise of the high street, has written to Vince Cable. Mr Cook considers the internet to be the main culprit contributing to the slow death of the high street as we know it. He argues that the current business set up of internet traders does not maintain a level playing field for all retailers.
In his opinion the main attraction of shopping through the internet is lower prices of goods and services (he doesn’t get involved in the issue of convenience of online shopping). Prices are lower since internet retailers pay less business rates (if any), lower rent (if any) and have smaller running and staff costs.
He argues that the government is also a loser in the current situation as it receives lower VAT on rent, running costs, less income tax from lower staffing levels and NI contributions. “The internet retailer has a competitive advantage of lower taxes and therefore can charge less; this also means lower VAT received by the government.”
The solution he suggests is an internet tax – which would not only create fairer trading conditions but also provide a substantial revenue stream which the country desperately needs at present.
An additional benefit of such a tax would be the requirement to register internet companies and to regulate them – protecting consumers to a greater degree from online fraud.
I feel that Mr Cook’s argument is a good one and its merits a discussion on one of our industry’s forums (and perhaps action in the future). I also welcome your views on this subject and will be very happy to publish them in the magazine.