‘Excessive profits’ tax considered for companies who have cashed in on Covid

Telegraph reportersSun, 7 February 2021, 2:05 am

Rishi Sunak has spent £300bn during the coronavirus crisis - SIMON WALKER
Rishi Sunak has spent £300bn during the coronavirus crisis – SIMON WALKER
Coronavirus Article Bar with counter ..
Coronavirus Article Bar with counter ..

Companies who has earned bumper profits during the coronavirus crisis could face new tax raids, according to a report.

A leaked email shows the Treasury has asked business leaders to consider the “risks and benefits” of an online sales tax, The Sunday Times reports, as the Government looks for ways to repair the damage to the public finances caused by the pandemic.

Firms likely to be hit by a one-off tax on profits include retailers Amazon and Asos, food delivery firms such as Ocado, Just Eat and Deliveroo, and supermarkets.

The Government is also considering a tax on excessive profits. Amazon, whose sales in the UK were up by 51 per cent last year, to £19.5 billion, is expected to be targeted.

The newspaper says Treasury officials will hold a meeting with tech firms, retailers and other businesses this month to discuss the plans. The Confederation of British Industry and TechUK, the UK’s tech trade association, have been asked to analyse the “customer and macroeconomic impacts” of the taxes.

Read more: Five tax rises Rishi Sunak is considering – and the chances of them happening at the Budget

The Government hopes that an online sales tax could aid the failing high street as well as boost tax revenues.

The measures are not expected to be announced in Rishi Sunak’s Budget next month.

The chancellor has spent more than £300bn in the pandemic “does accept that the way we tax online sales at the moment is killing the high street and something needs to be done on it,” a source told the newspaper.

A Treasury spokesman said: “We want to see thriving high streets, which is why we’ve spent tens of billions of pounds supporting shops throughout the pandemic and are supporting town centres through the changes online shopping brings.

“Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an online sales tax. We’re considering responses now.”