Tax the internet giants ‘to save the High Street’

As Facebook pays just £7m tax, Chancellor told...

A NEW tax should be slapped on web giants to help fund a freeze on business rates for struggling firms, the Chancellor was told yesterday.

In a letter to Philip Hammond ahead of this month’s Budget, companies including Pizza Express and Wagamama called for the levy to support the beleaguered High Street.

The Confederation of British Industry is also demanding an overhaul of rates amid fears that they are crippling tradi- tional shops. Mr Hammond told the Tory party conference last week he was minded to introduce a digital services tax on web giants such as Amazon, Facebook and Google.

Yesterday’s letter to the Chancellor came as it was revealed that the tax bill for Facebook’s UK arm was just £15.8million last year, despite sales of nearly £1.3billion.

The company was able to reduce the final bill to £7.4million by claiming £8.4million in tax credits. The restaurant companies said the proceeds of the new tax should be used to freeze rates for so- called bricks and mortar firms.

The Mail is campaigning for tax reform to alleviate the crisis on the High Street that has led to the loss of more than 50,000 retail jobs this year.

The letter was organised by the trade group UK Hospitality, with 32 co- signatories including the Greene King pub group, Alton Towers owner Merlin Entertainments and holiday park chain Butlin’s.

It was also signed by Stone- gate, owner of the Slug And Lettuce pub chain, whose chairman Ian Payne attacked the rates regime as unequal. He told The Daily Telegraph that his firm paid 20 times more tax than Amazon in Britain, but that its turnover amounted to only a third of the online retailer’s.

Fellow signatory Keith Knowles, chief executive of the budget hotel group Beds & Bars, said: ‘The Government needs to decide if it wants to create the environment for recession or an environment for stability and growth.’ In the CBI’s preBudget letter to the Chancellor, director general Carolyn Fairbairn said: ‘The business rates system is stifling growth and investment in commercial property across sectors from retail to manufacturing and energy storage.

‘ For some retailers, their business rates bill is over double their corporate tax bill.

‘For one manufacturer, their business rates bill is almost 50 per cent of their operating expenditure, making them unprofitable.

‘It is imperative that urgent action is taken.’

The CBI wants Mr Hammond to copy the Scottish government, which is giving firms 12 months of relief when they build a new commercial property or renovate a store, factory or office. The lobby group wants a review of rates before 2019-20 to make the model fit for the internet age.