News Delivery Firm Raises Alarm Over Proposed Tax



Delivery firm raises alarm over proposed tax
16th September 2020

By Justine Thompson

Free delivery is vital for retail, a new study has revealed, as nine out of 10 shoppers say no delivery charge is their main incentive to spend more.

Delivery company ParcelHero says its research also showed that 58% of shoppers admit to regularly spending more to qualify for free shipping.
Now the company fears that a Government-proposed compulsory delivery charge could stall the growth of e-commerce just as retail is beginning to recover from the impact of coronavirus on the economy.

David Jinks, of ParcelHero, said: “What the UK economy needs now is an increase in consumer spending. People are holding on tight to their savings because they are rightly concerned about job security. Added to that is anxiety about visiting crowded stores.


“Astonishingly, this is the moment the Government has chosen to propose an entirely new tax on online deliveries. Retail analysts believe the compulsory delivery charge, proposed in June’s ‘Position Paper on Last Mile Logistics’, is likely to be a minimum of £2 an order or an additional 2% on the overall spend.

“Removing free deliveries is a big psychological step that could have a significant impact on consumer behaviour.”

The new charge would be to ‘encourage consumers to realise their true business, societal and environmental cost, and hence encourage more sustainable behavior,’ according to the position paper.

However, Parcelhero says consumer confidence is currently too fragile to withstand additional charges and that the additional tax would not benefit the environment as consumers often choose the slowest shipping method and home deliveries are far more eco-friendly than multiple trips by car.