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Mike Ashley: 'Tax the web boys 20%'

At a parliamentary committee hearing, Sports Direct Group owner Mike Ashley has called for a 20% internet sales tax to save the “flatlining mainstream high street”.

Ashley appeared before the housing, communities and local government committee on 3 December to discuss the outlook for high street retailers in 2030.

“I wouldn’t even go to 2030,” he said. ”The mainstream high street is already dead. What can we do for the minority? You have to immediately tax the internet.”

Ashley argued that a tax on those trading more than 20% of their sales online would force retailers to open more stores in areas where high streets are in decline.

“If I’m a retailer I will make sure not to pay the 20% tax and that I keep 80% of my revenues going through the high street because it now makes business sense for me to cross-subsidise those stores and keep them open.”

Discussing regional high streets, Ashley stressed the need for free parking to help increase footfall and encourage online shoppers to click and collect instore.

“You have to have free parking. You still get towns where high streets are barren and deserted charging for parking, which negates the free click-and-collect opportunities.”

Ashley called for councils to “force and help” retailers by working together with landlords: “Assuming the internet tax is in place, if the council then gave retailers free rates for five years on the condition that they matched every pound of free rates with a pound of investment that has to just go in that site, all of a sudden you’re forcing them to invest.”

Sports Direct Group has a £400m online business and would be affected by any online sales tax introduced.

Ashley said: ”I’m sitting here voting to punish Sports Direct Group. That is not very normal, but if the minority high street can now be saved it makes business sense because in 2030 I can have a fantastic business still.

”The high street won’t make 2030. It won’t be there unless you do something really radical.”

Readers' comments (13)

  • Or tax them by the amount of packaging they send out.
    Buy something from Amazon and you're likely to receive a box at least 5 times the size of the item filled with paper.

    Where does all this packing go ?

    Goes in the bins of my local high street where the retailers are paying business rates for amongst other things......rubbish disposal.

    Couldn't make it up.

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  • The answer isn't about adding a 20% tax on "the web boys" its sorting out the business rates and rents from landlords. Look at the landlords who are turing retail spaces into residential - its about money and greed. What makes Ashely think customers are going to shop on the high street just becuase they have free parking, how ridiculous to suggest such a thing. Retailers need to up their game on customer experience and offer an amazing service in-store that you can't create online, its about offering the customer a great customer experience so they want to shop instore - its a customer behavour to shop online and a customer choice.

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  • I know MA is not everyone’s cup of tea but at least he’s got some ideas and is provoking some debate at the select committee. He has some interesting ideas , of course retail is about product and experience however parking is an important topic, as are business rates , rents and many other subjects. I’ve seen great stores... in neglected towns with low footfall, how can they survive? A range of initiatives are needed, many specific to the location.

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  • Bricks and mortar businesses have added property costs; online businessss have far more punitive added shipping, returns, and marketing costs (to achieve equal visibility on the Internet high street that bricks and mortar affords on an analogue high street). The notion that Internet-focused businesses have a lower cost base is being traded as an article of faith, without scrutiny. Launching a brand online requires lower capital costs — that’s the only systemic advantage, but that’s one that permits a more egalitarian entrepreneurial landscape. Taxing profit is a very logical, equalising approach, and one the Treasury already implements.

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  • darren hoggett

    While I don't agree with Ashley on the 20% web tax and the significance of free parking, he is right in that the High Street won't make 2030 - at least in its current form. It will 'evolve' like it always has done and should be allowed to do so. If that means little in the way of clothing retail, so be it. It's up to managements to make the right decisions for their respective companies and earn their money.

    Although Ashley is a maligned figure with some, he is streets ahead of the game in an Industry covered in corporate fog.

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  • Not only is the Internet having major impact on high-street, it's also is having major impact to the environment, there is more and more courier vans on the roads delivering parcels, and then the consumer wishes to return the item, so another van is required, all for £9 CD!
    I would put levy on every delivery and every return of £1 pound which would raise millions for the Treasury, which could either help to offset business rates, or put it towards combating climate change.
    I agree with Mike Ashley, this should be some form of tax for the Internet boys. The Government nice to act now.

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  • I also do not subscribe to an internet tax, although appreciate the impact of Mike Ashley's involvement, and some of the other interesting contributions above.

    But please can someone explain why business rates shouldn't simply be scrapped (along with all the bureaucracy that's grown up around them) and replaced with a corresponding increase in VAT, the purest tax yet created.

    The negative impact on the lower paid could at least partially be offset by a further expansion of the 'safety net'.

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  • A climate charge that is added to the customers bill would be a sensible approach. Much like the plastic bag charge it will make people think. Regarding Parking, when we had free parking the bays were full of shop staff cars and there was nowhere for customers to park. The real issue is lack of town centre parking and councils should be forced to provide sufficient spaces, allowing the high street to become a destination once again

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  • Gen Z will generally not shop in Towns or City Centres when they can do it on on their phone, tablet, lap-top or whatever. Retail is asleep at the wheel and trying to turn back the tide. You can't.

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  • Gen Z will shop where they find innovation and niche, at some point high street shopping will rebound, the net isn't the only thing that's destroying it, this started years ago. The only way the multiples could gain growth was to dominate the high streets, these high streets were made attractive because of the indies (not just clothing) which in turn meant private label flourished, the multiples then came to dominate in just about every high street in the UK, pushing up rents and killing the indies and the once flamboyant private labels, then the American Retail Park came along, the multiples moved out of the high street and into the retail parks, killing the high street and leaving high rents and empty shops, next came online and we are now where we are, with the once dominant multiples being chipped away at all ends of the spectrum and once again closing stores. The High St will comeback but smaller, smarter and much more niche, but it needs innovation on all sides landlords, government (inc town councils), suppliers, retailers, btw loving Coal Drops Yard, the way forward!

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