UK supermarket chiefs call for online sales tax on firms like Amazon
Some of the UK’s largest retailers, including Tesco and Asda, have called for Rishi Sunak to “rebalance the tax base” between online and bricks and mortar retail in an apparent push for a new digital sales levy on firms like Amazon.
In a letter to Sunak, 18 chief executives and union bosses said “online retailers pay a lower proportion of rates per sale than bricks and mortar retailers”, urging the chancellor to “to rebalance the tax base to ensure online and bricks and mortar retailers pay a similar proportion of tax”.
The retailers also urged the chancellor to reduce the business rates multiplier to 35 per cent of a property’s rateable value instead of the current 50 per cent level.
Signatories to the letter include Tesco chief executive Ken Murphy, Morrisons chief executive David Potts, Asda chief executive Roger Burnley, Waterstones chief executive James Daunt and Union of Shop, Distributive and Allied Workers (Usdaw) general secretary Paddy Lillis.
The letter points out that most traditional retailers have been unable to operate at full capacity since last March, which has accelerated the long-term decline of the UK’s High Street businesses.
Data from the Centre for Retail Research shows 15,000 retail jobs have already been lost in the first month of this year alone.
Online retailers like Amazon and Asos, meanwhile, have seen a huge spikes in profits during the pandemic.
“Reducing business rates for retailers and rebalancing the tax system to ensure online retailers pay a fair share of tax would be revenue-neutral, provide a vital boost to bricks and mortar retailers and support communities in need of levelling up,” the letter read.
“As organisations representing shops, shopworkers and retail property owners in every corner of the UK, we hope that you will take this opportunity for fundamental reform and consider our proposals. The benefits to the UK economy and the future of retail will be significant.”
It comes as The Sunday Times revealed today that Sunak was indeed considering hitting digital marketplaces with an online sales tax.
The government is also looking at a so-called “excessive profits tax” on UK firms that have seen marked increase in earnings due to the Covid pandemic.
Companies most likely hit by the taxes would be Amazon, Asos, food delivery apps like Ocado, Just Eat and Deliveroo, and the big supermarkets.
A Treasury spokesperson said: “We want to see thriving high streets, which is why we’ve spent tens of billions of pounds supporting shops throughout the pandemic and are supporting town centres through the changes online shopping brings.
“Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an Online Sales Tax. We’re considering responses now and will update in due course.
“The 2020 Spending Review also confirmed that the business rates multiplier would be frozen in 2021-22, saving businesses in England £575 million over the next five years.”