The Daily Mirror does cognitive dissonance.
Compare and contrast their two tables:
£100 spent on the High Street
74p goes to Treasury in Corporation Tax
£13.20 on wages
92p on National Insurance
£2.06 on business rates
£100 spent online
20p goes to Treasury in Corporation Tax
£5.74 on wages
56p on National Insurance
26p on business rates
What are they missing/overlooking?
1. In both cases, up to £16.67 goes in VAT (the worst tax of all). That's as much as all the other taxes and wages paid by High Street retailers put together, and greatly reduces the relative difference between High Street and online.
2. I am well aware that large non-UK online sellers take the piss on corporation tax, but if High Street retailers are paying 74p corporation tax at an average rate of 19%, that means that their net profits after all costs are in the region of £4 per £100 sales, which looks OK to me.
3. It ignores the amount paid in rent, which is two or three times as much as the business rates. If included, this would increase the relative difference between High Street and online.
4. They ignore tax incidence.
a) The National Insurance (second worst tax of all) is borne by workers in terms of lower wages.
b) Business Rates are borne by the landlord, so do not increase overall costs either. For owner-occupier businesses, the business rates are largely just rent on that part of the land and buildings they never paid for in the first place - the price they originally paid was depressed by one-quarter or one-third because of the likely future business rates payable.
c) Our man of the moment, Mike Ashley, is perfectly aware of this, that's why he's going into battle with Debenhams' greedy landlords and demanding they drop the rents. Having achieved that, the business rates bills will fall of their own accord, being set at a percentage of rental values.
5. It is quite probably true that large 'online' retailers pay relatively little in business rates per £1 of sales, that's because they largely trade from out of town warehouses, where the location value is low. If High Street retailers think that they can sell as much stuff for the same price by relocating to the middle of nowhere, then good luck to them. Common sense says they can sell 2% more, or charge 2% higher prices, by simply being on the High Street, so big deal.
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