Big 4 grocer Asda is understood to have urged the government that introducing an online sales tax (OST) will only harm retailers as shoppers are already struggling to cope with inflation increases.

Asda was one of the retail groups to meet with the financial secretary to the Treasury and the minister responsible for tax policy, Lucy Frazer.

This comes as the UK government is currently evaluating responses to its consultation on the introduction of an OST, which closed in May.

READ MORE:Shoppers limited to £30 at tills, warns Asda boss

If implemented, the OST would be used to fund reductions in business rates for retailers.

However, Big 4 rivals Tesco, Sainsbury’s and Morrisons, alongside the Co-op have formed the Retail Jobs Alliance, which agrees with online tax.

However, M&S have argued against the introduction of OST.

A Treasury spokesman said: “We recently completed our Business Rates Review which led to £7 billion of support to reduce the burden of rates over the next five years and brought about reforms which will make the system fairer.

“We have not decided whether to proceed with an online sales tax. The purpose of the recent consultation was to consider the design options and economic impacts of such a tax, and explore the arguments for and against.”

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