Chancellor Rishi Sunak enjoys historic approval ratings, but will his business reforms cause this to change? Small businesses need the help, argues Shaz Memon
It is time to make Amazon pay their fair share, whilst allowing smaller businesses (who unlike their larger competitors, by and large pay full UK corporation tax) to transition online without any additional barriers. Collective punishment is not the solution.
Rishi Sunak has an unenviable job. On the one hand, he needs to lay the groundwork for economic recovery, which would usually be associated with lower business and household tax rates. At the same time, we are in the highest levels of public debt since wartime. In such a position, it’s understandable to look for new sources of revenue, and market them as only affecting big global businesses rather than the shop around the corner.
But policies like this are atypical of a pragmatic and popular Chancellor. Moves like ‘eat-out-to-help-out’ and the furlough scheme have allowed Sunak to enjoy approval ratings that are the envy of Westminster: 59% of Brits believe Sunak to be doing a good job. Boris Johnson’s numbers, on the other hand, are barely in the double digits.
But Sunak must not overplay his hand. The misleadingly dubbed ‘Amazon tax’ will not just be a tax on Amazon goods, but a 2% tax on all goods bought online. A more accurate name would be a ‘high street struggling to embrace e-commerce tax’. Against rising retail job losses and business closures, 2% could be the difference between solvency and bankruptcy for many retailers – and the difference between popularity and hatred for Sunak.
The government argues that this tax will level the playing field between high street vendors and online giants like Amazon. This is simply not the case. During the pandemic, I have worked with many businesses who have shifted their operation online. With investment in Facebook advertising and a boosted digital presence, businesses have been able to swiftly bring their services online and survive, or even thrive. Whilst online sales have increased, they have often not made up for the custom lost from decreased or non-existent foot-fall. Many small businesses who have shifted online still find themselves in a precarious financial position.