Retailers have hit back after new Treasury proposals suggested introducing a tax on online retail, telegraph.co.uk reports.

In a bid to place online retailers on a level playing field with those operating on the high street, the government has suggested introducing a new “online retail tax” that could redress the current imbalance. Retailers have hit back, however, claiming that such a move would become a “barrier to entrepreneurship”.

Currently, bricks-and-mortar retailers operating in the real world have to pay business rates across their entire estate. This provides the public purse with around £7 billion every year. Online retailers, however, have a much smaller property footprint so pay significantly less.

The government has now claimed this puts them at an unfair advantage over high street stores and that a tax could even up the playing field. In response, retailers claimed that such a move would not only stifle entrepreneurship but also be “bad for consumers, business and the UK.”

The claims came in a letter to chief secretary to the Treasury, Danny Alexander by the founders of sofa.com, Pat Reeves and Rohan Blacker. In their letter, the entrepreneurs claim that online retail isn’t a sure-fire way to get one over on the high street and ensure success during a difficult trading time. In fact, it was claimed that to suggest online retailers had an advantage was “absurd”, as only the most successful firms thrived, regardless of the way they sell their wares.

In their letter, as published by retail-week.com, Reeves and Blacker claimed: “A tax, if imposed, could be a barrier to entrepreneurship, negatively impact small businesses, reduce consumer choice and hit at the heart of the UK’s world-leading online retail industry.”

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