Hammond plans ‘Amazon tax’ to boost the High St

BRITAIN could impose an ‘Amazon tax’ on online retailers in an attempt to rescue the country’s High Streets, the Chancellor revealed yesterday.

Philip Hammond is considering the introduction of a special tax to help level the playing field between internet giant retailers and traditional ‘bricks and mortar’ stores.

He revealed the plans hours after House of Fraser, the 169-year- old department store chain, was rescued in a last-ditch deal. A levy would be a victory for the Daily Mail, which has campaigned to save our High Streets with a fair tax on internet retailers and reforms of business rates.

Retail bosses and campaigners have complained that shops are crippled by rising bills, while Amazon pays lower rates on its out-of-town warehouses.

And Amazon provoked fury last week after it slashed its tax bill even further.

Despite soaring sales of close to £2billion, the web giant’s biggest UK arm revealed it received a corporation tax bill of just £4.5million last year. That was down from £7.4million the previous year.

At the same time, Britain’s High Streets have faced a bloodbath with much-loved brands forced to shut shops.

Poundworld, Maplin and Toys R Us have all gone bust this year, with several other firms such as Mothercare, Carpetright and New Look undertaking store closure programmes.

Mr Hammond yesterday declared it was a priority to go after the technology giants to make them pay their fair share of tax.

The Chancellor said that if international efforts to overhaul rules failed then Britain was prepared to go it alone and impose its own measures. He told 5 News: ‘We want to make sure the High Street remains resilient and that we also make sure taxation is fair between businesses doing business the traditional way and those doing business online.

‘Unfortunately, because most of the online businesses are global, that requires us to negotiate changes to international tax treaties.

‘If we don’t make sufficient progress in these international negotiations, we are prepared to consider short-term, temporary tax measures on online businesses, until we get those changes to the international agreements.’

Mr Hammond suggested the tax could be based on the revenues of online firms, such as Google, Facebook and Amazon, instead of their profits.

He added: ‘ Our message to all businesses in the UK is that we expect you to pay a fair share of tax based on how much value you add in the UK through your sales to UK consumers and your interactions with UK consumers.

‘Many businesses are gathering data from UK consumers, taking uploaded content from UK consumers; that generates value for them and in all fairness, they should be paying tax in the UK on that value. The system now is unfair because our tax system was designed for a different economy.

‘As the economy digitises, we are going to need to change the tax system to make sure that it is fair to everybody in it. ‘

The Mail can today reveal how in the past decade Amazon’s biggest UK division – its services arm – paid just £30.8million of net corporation tax, despite generating sales of £6.3billion. Over the same period, the online retailer was handed at least £11.7million taxpayer-funded grants for building warehouses.

In four of the ten years, Amazon UK Services actually paid less tax than the value of the state aid it was handed.

Tory MP Simon Clarke, a member of the Treasury Select Committee, last night said: ‘At a time when the High Street is under such unprecedented pressure, it will stick in many people’s throats to see an online giant like Amazon getting such a soft deal. If anything should prompt us to have a serious review of business taxation, this is it.’

Amazon last night said it has invested £9.3billion in the UK since 2010, including last year opening a new head office in London and development centres in Cambridge and the capital.

It intends to create 2,500 jobs this year, bringing its total British workforce to more than 27,500.

A spokesman said: ‘Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment.’

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