END THIS HIGH ST ROBBERY

Anger of town centre shops forced to pay FOUR TIMES as much in business rates as online giants

HIGH street shops are paying four times as much in business rates as their online rivals, shocking figures reveal.

Research suggests the average high street shop spends 2.3 per cent of turnover on business rates while online firms are paying just 0.6 per cent. Joshua Bamfield, director of the Centre for Retail Research, which uncovered the figures, said they were ‘scandalous’. He added: ‘It’s one thing to talk about a level playing field but the way rates are organised is such a burden on high streets that it’s one of the things driving shops out of business.’

The revelations come a day after the Mail launched a campaign to save Britain’s high streets, which have lost a staggering 50,000 retail jobs in the first half of this

year. Crippling business rates have been blamed, with the taxman expected to collect £30.8billion this financial year. One expert last night said the crisis could lead to ‘the extinction of the high street’.

Chief executives and MPs say business rates must be reformed as a matter of urgency, or town centres will be left empty and thousands more jobs will be lost.

Sir Ian Cheshire, chairman of Debenhams and former head of the British Retail Consortium, said: ‘They’re still trying to collect what is effectively a window tax in an era when business models have moved on. Retailers have to put their hands up and compete and adapt. But it feels like we’ve got a world that is becoming completely digitised and we need the tax system to reflect that.’

A Mail investigation has also found that online giant Amazon pays just £14million a year in business rates for its 13 enormous warehouses – far below the costs faced by traditional high street stores.

Marks & Spencer, which has UK

‘The gap is ridiculous’ ‘Extinction of the high street’

sales that are a third bigger than Amazon’s, attracts a rates bill of £184.2 million, more than 12 times as much as Amazon pays. House of Fraser – which is closing 31 stores with 6,000 jobs at risk – pays an estimated £120million a year.

Business rates are based on how much a premises costs to rent, meaning that bills are higher for stores on prized shopping streets than for outof-town sites. For example, House of Fraser has to pay an estimated £4.6million for its central London Oxford Street store, which is due to be closed. But Amazon and other online retailers rely instead on warehouses which can be built in cheaper parts of the country.

Amazon’s annual rates bill of £14million, according to analysis by consultant Altus Group, is just 0.2 per cent of its £7.3 billion in annual UK revenues. It covers 13 warehouses spread out across England and Wales in industrial parks near cities such as Doncaster, Swansea, Manchester and Peterborough.

A 14th warehouse is not included in the figures because details of its rates bill are not yet available. Two Scottish sites are also excluded because the rates system is different north of the border.

Business rates in city centres have been rising rapidly in the past few years due to soaring property prices. Altus said the average rates bill for a department store stands at almost £718,000 – up £151,000 in the past two years.

By comparison, Altus said the Amazon warehouses open during that period had seen their combined bill go up by only £78,739, or 0.7 per cent.

MPs said the figures showed a complete overhaul of business rates was needed.

Liberal Democrat leader Sir Vince Cable, a former Business Secretary, said: ‘The gap in business rates is ridiculous and unfair. There should be a level playing field.’

He called for a temporary tax on internet retailers’ sales until international leaders can agree a better way to make them pay their fair share.

Downing Street also sup- ports an international deal to tax the tech giants. Theresa May’s spokesman said: ‘We recognise there is a misalignment between how digital businesses are taxed and traditional shops are taxed.

‘The Chancellor said earlier this year that if no reform is forthcoming we would consider our own measures, such as revenue-based taxes.’

James Daunt, managing director of bookshop chain Waterstones, said change was essential to save high streets.

His business has 283 stores nationwide and pays about £15 million a year in rates, similar to the estimate for the Amazon warehouses, despite Waterstones making only a £10.9million profit in the year to April 2017. The company came close to collapse in 2011, partly due to Amazon hoovering up book sales.

Mr Daunt said: ‘ Spending doesn’t only go through the high street any more, it’s going online. That leaves the business rates tax very disproportionately applied.’

Robert Hayton, of Altus, said: ‘Traditional bricks and mortar retailing is property intensive. If left unchecked, this could lead to the substantial extinction of the high street.’

An Amazon spokesman said it had more than 100 buildings in the UK, and the rates figures for the 13 warehouses were not representative of its total bill. He would not reveal how much it pays in business rates overall, saying this figure is confidential.

The spokesman said: ‘Amazon pays tens of millions of pounds more in business rates in England and Wales than suggested by the research and our business rates bill has increased significantly in 2018, including an overall increase at the 13 sites mentioned.’

The company does not reveal all details of its corporation tax either. The spokesman said: ‘We pay all taxes required in the UK.’

TheRe is no question that online shopping has been of huge benefit to consumers.

It has allowed people to compare prices at the click of a mouse, increased competition and meant heavy items that would once have had to be carted home from the shops are delivered to the door.

But the glaring tax advantage that Amazon and other big online retailers enjoy is sucking the life out of their traditional counterparts. If it goes on, instead of increasing choice and driving down prices, the rise of the internet will eventually have exactly the opposite effect.

On day two of the Mail’s Save Our high Streets campaign – which has already been joined by an impressive number of chief executives, campaigners and MPs – we focus on this critical imbalance.

Last year, Amazon made revenues of £7.3billion but paid business rates of just £ 14million – a tiny fraction of what their traditional competitors were charged, despite them having much smaller turnover and vastly lower profits.

Yes, there are reasons for this. Amazon operates from cavernous out- of-town warehouses which attract much lower rates. But there has to be a level playing field.

The Mail is a passionate advocate of the free market, but the current rating arrangements are tantamount to unfair competition.

If the British high street is to survive, the whole lopsided system must be reviewed – and radically reformed – as a matter of extreme urgency.