Treasury rules out online sales tax after retail bosses warn of damage In a letter to the chief executives of six online retailers, seen by The Sunday Telegraph, David Gauke, the Exchequer Secretary to the Treasury, said the Government favoured "an approach which aims to ensure common principles apply to all businesses whether operating online, from physical premises or with a combination." Mr Gauke wrote: "The Government recognises that online businesses contribute to growth in the UK and supports continuing success in the sector. Many online businesses operate across international borders and it is therefore important to have international agreement on the principles of how multinational businesses, including online, are taxed. However, we favour an approach which aims to ensure common principles apply to all businesses whether operating online, from physical premises or with a combination. For this reason, we do not favour a specific tax targeted at the online business sector, although we aim to ensure that tax principles are developed which can be applied consistently across the economy. He added: "This area is extremely complex; with large parts of the economy moving towards having some form of digital presence, it is important to ensure fair competition between digital and non-digital businesses." The retail trade body, the British Retail Consortium, welcomed the comments. Helen Dickinson, BRC director-general, said: "The whole question of an online tax has had a lot of coverage but it's not the place to start. It's important that common principles should apply to all businesses - but the principles that apply at the moment are from a bygone age. Business rates in particular have long since ceased to be fit for purpose.