Reeves looking at Amazon tax

By Liza Helps Property Editor Logistics Matters

THE LABOUR government has promised to reform business rates to make a more level playing field between online and high street shops. She is expected to outline plans for a consultation for wide spread reform to take place next year alongside a move to reduce bills on shops, leisure, and hospitality in the short term.

The ‘Amazon Tax’ proposal would see business rates rise for online retailers and was reported by The Telegraph yesterday.

Earlier this month Logistics Matters reported on an open letter from 71 leading retailers calling for the introduction of a 20% Retail Rates Corrector as part of the Government’s business rates reform.

It was thought that this could add fuel to the fire that warehouse operations could be made the scapegoat and see a further increase in the business rates burden. The UK Warehousing Association noted that following the 2023 Business rates Review some UKWA members’ business rates bill increase 70%.

Business rates are seen as controversial disadvantaging high street retailers where property values are higher than out of town locations of warehouses favoured by online retailers.

The Treasury is reportedly looking at adjustments to how business rates are calculated, potentially basing them on factors such company revenue or the type of property occupied. But there is a fear that Government will make no distinction between online giants and UK retailers carrying out omnichannel operations or indeed take note of the distinction between online giants and the supply chain SMEs who through the very nature of the business work out of larger buildings.

Many high street shops, hospitality and leisure entities face a rise in business rates when Covid-era relief measures end in April 2025.

There had been rumours of a tax o sales from online giants such as Amazon but it was considered too politically fraught. 

Last month, the online retailer unveiled an £8bn investment in the UK over the next five years and reported that it is one of the top 10 largest UK taxpayers. 

Overall, Amazon’s full UK operation paid £932m in tax last year, up from £781m the year before including business rates and corporation tax. Roughly equating to 3.45% of turnover.

The online giant said its British businesses made sales of £27bn in 2023, a rise from £24bn in 2022. And according to the The Guardian the company now secures more than double the sales of the traditional retailer Marks & Spencer in the UK but pays less than double the tax.