THE RATE DIVIDE
Online shops’ tax breaks as town centres suffer closures 50,000 jobs lost in six months as famous names collapse
AMAZON has been handed a generous tax boost by the Government – as 50,000 more high street workers have lost their jobs.
The US firm is among internet giants that benefitted from the Tories’ controversial shake-up of business rates last year.
Research claims Amazon’s tax bill on 11 of its gigantic “fulfilment centres” rose by less than £80,000 in total this year.
That is barely half of the £150,000 hike in business rates that just one average town centre department store suffered over the same period.
Meanwhile, there have been hundreds of store closures and in the first six months of this year, 50,000 staff have been made redundant or seen their role put under threat, with most working for high street chains.
According to the analysis by industry expert Altus, Amazon’s tax bill on the 11 properties – the backbone of its business – rose by only 0.7% in April.
Yet rates on a typical depart- ment store went up by more than 26% – or 38 times faster.
Many other town centre shops also saw increases of more than 10%. The disparity was caused by the way rents on different buildings were used to a revaluation of 1.9 million properties in 2017.
It disadvantaged town centre stores by using, in many cases, outdated information and expensive leases taken out in healthier times.
Even when shops should have seen a big fall in their rates bill, the drop was capped.
The study claims Amazon’s rates bill on the 11 sites was around £11million. But Tesco, for example, paid £700million last year in business rates, while Sainsbury’s paid £550million.
And while Amazon’s corporation tax bill halved to £7.4million in 2016, Tesco paid £143million and Sainsbury’s £72million.
Amazon branded the findings “misleading and inaccurate”. It said: “Amazon pays tens of millions of pounds more in busicalculate
Within the next five years, you could have complete ghost towns BILL GRIMSEY FORMER WICKES DIY AND ICELAND BOSS
ness 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 11 sites mentioned.”
The high street is also being hit by the failure of online retailers to charge VAT on goods sold and imported from outside the EU. MPs on the Public Accounts Committee found HM Revenue & Customs’s failure to collect enough VAT from online sellers cost the taxpayer up to £1.5billion in 2015/16.
In the past few weeks, House of Fraser has put more than 6,000 jobs at risk with a radical store closure plan, while Poundworld has plunged into administration, endangering a further 5,100. It adds to Toys R Us and Maplin, which collapsed earlier this year.
Former Wickes DIY and Iceland boss Bill Grimsey has conducted a retail review. He said: “Within the next five years, you could have complete ghost towns, devoid of any people – museum towns with practically tumbleweed rolling down the street.”
Frances O’Grady, of the TUC, said: “Government needs to up its game, boost the economy and invest in jobs people can live on.”