IPPR urges 2% online sales tax to fund UK high street relief

The Institute for Public Policy Research has called for a 2% tax on internet purchases and a 1% levy on click-and-collect orders to support brick-and-mortar shops across the United Kingdom. It estimates the measures could generate roughly £1.5 billion, which would be directed toward reducing business rates for leisure, hospitality and retail outlets. To protect smaller retailers, the plan exempts businesses whose annual remote sales are under £500,000.

The think-tank calculates that small firms could gain about £1,400 per year, while larger ones might save around £2,500, with local authorities fully compensated for any loss in rates revenue. Additionally, the IPPR proposes lowering the business-rates multipliers for retail, hospitality and leisure properties in England. The recommendations are timed as Chancellor John Healey readies his financial statement for October 28, and they echo broader government efforts to revitalise high streets.