Online retailers hit back at tax plan However, in a letter to Danny Alexander, the Chief Secretary to the Treasury, the founders of the online retailer, sofa.com, have warned that a tax on online retailers to address the imbalance would be "bad for consumers, business, and the UK." We employ lots of people who pay national insurance, and all our shareholders also pay tax. They added: "It is the consumers who decide which retailers are successful - this is market forces at work. Taxing online retailers won't change this, but most likely lead to a reduced consumer choice online. Retailers should accept cost variances: e.g. traditionally online retailers have larger technology investment and delivery costs, whereas traditional retailers have higher rents and rates. Additionally, start-ups don't have any kind of rent covenant to offer landlords, so large businesses often get the best retail sites anyway. Online businesses often fail. Online isn't some magical way of beating the high street, only the best businesses survive and as such, it's absurd to imply that online retail has an 'inherent advantage'over traditional shops. The sofa.com founders said that an online tax would hinder entrepreneurs pushing the UK economy back to sustained growth. Online retailing in the UK has grown quicker than anywhere in the world, with companies such as fashion retailer Asos emerging. The sofa.com letter said that a tax on online businesses would be an "unusual way to support one of the UK's success stories." "The Government is calling on technology companies and entrepreneurs to help the UK economy," it says. "The internet enables entrepreneurs to start businesses quickly and cheaply - it's a great place for the 'little guy" with a good idea to bring a product to market. The vast majority of new jobs created in any year in the UK are from small firms. Therefore, an online sales tax will not be helpful.