The UK government has announced no decisions have been made on proposals for a 1% tax on the online sales of goods by businesses with more than £2 million of sales – a move that could potentially raise £1 billion per year. A charge of £1 per order on deliveries made by those companies would raise a similar amount.

High street retailers had hoped such a tax would increase the cost of digital sales, while giving the government funds to reduce their business rates.

Sir Tom Hunter admitted the plans remain a thorny issue, adding: “Property business rates raise a great deal of money. When I sold my business back in the dinosaur age there were no online sales. 100% of my sales came through my shops and I paid my business rates and that went to the government.

“Now online sales equate to about 30% to 40% of the total market but we’re still paying 100% business rates. So, if you are on the high street, you’re being overtaxed. We need a level playing field. It’s a big thing to grasp and do the politicians have the bravery to do so? Obviously not.”

The government has published a consultation, inviting responses on questions such as which goods and transactions should be covered, whether it should be a proportion of revenues or a flat fee, and whether the tax should apply to intermediary vendors and business-to-business commerce.

Lord Willie Haughey commented: “I think this is more than a missed opportunity. This was a chance to level up. There’s not a level playing field between bricks and mortar retailers and those online.

“I’m actually disappointed that we’re still only talking about 1%!”