AMAZON FORCED TO PAY SCOTTISH ‘ROBIN HOOD’ TAX
SNP set to make retail giant pay higher business rates – with cash raised invested in struggling high streets
AMAZON will be forced to pay extra tax to provide a funding boost for struggling town centres under new government plans.
Councils would be handed powers to inflict higher business rates bills on online retail giants’ warehouses and distribution centres.
The Scottish Government wants to roll out pilot schemes allowing local authorities to impose the supplement – dubbed a ‘Robin Hood’ tax because it takes from rich internet giants and gives cash to underpressure high street stores.
Fife Council has confirmed it is interested in taking part in the trial, meaning Amazon’s biggest distribution centre in the uK, based in Dunfermline, could be affected. If successful, the initiative could be brought in across Scotland.
The Scottish Daily Mail told yesterday how Amazon is bidding to slash its business rates bill in Scotland – after already persuading assessors to reduce its rates charges by £200,000 a year. The SnP has Turn to Page 4
launched a consultation on allowing an extra levy. It proposes that a discretionary power is introduced to allow councils to impose ‘modest rates supplements from 2020 for out-of-town ratepayers or predominantly online ratepayers’.
It states: ‘The proceeds would be used to support ratepayers in town centres. This should be a pilot scheme, involving no more than three towns, and must be subject to a formal evaluation to determine whether those pilots were successful prior to any further roll-out.’
Last night, Finance Secretary Derek Mackay said: ‘The proceeds would be used to support rates relief for businesses in town centres and we are consulting on a range of appropriate safeguards, such as the need for consultation with all rate- payers who might potentially be affected. We encourage all those with concerns or comments about the current business rates system to take part.’
The consultation states the Government ‘has already committed to implementing these pilots’.
Safeguards will include a cap on the level of increases which can be applied, a requirement for ministerial approval for each scheme and the need for councils to consult fully on its proposals.
Ministers are consulting on the level of increases councils will be allowed to impose.
Scottish Tory finance spokesman Murdo Fraser said: ‘A Robin Hood-style tactic of forcing these online firms to pay their fair share, helping high street retailers in the process, is worthy of further investigation.
‘We do need to be careful, though, of putting Scottish business at a competitive disadvantage.’
The revamp of the rates system was first proposed by Ken Barclay, a former Royal Bank of Scotland chairman who headed a Scottish Government review commission.
His report proposed primary legislation be introduced to allow a maximum of three pilot schemes imposing a ‘modest supplement’ on ‘out-of-town businesses or predominantly online businesses’. His report suggested revenue be used to ‘reduce rates either right across the town centre(s) or on certain facilities within the town centre(s) such as car parks’.
Amazon, which rakes in £9billion a year in UK sales, is due to pay around £3.3million in business rates for four of its most prominent Scottish sites.
It has lodged appeals for three of them, including the Dunfermline centre. Fife Council head of economy Robin Presswood said: ‘Any opportunity to explore this further would be welcomed to help revitalise our town centres and Fife’s economy.’
Critics say the existing system means that online retailers pay comparatively lower rates than traditional ‘bricks and mortar’ operators. The Scottish Daily Mail is campaigning for an overhaul of the system to ‘Save Our High Streets’.
David Lonsdale, director of the Scottish Retail Consortium, said: ‘This new business rates surcharge will do little to aid town centres since it is not an answer to the high cost of operating on our high streets, nor to the shift in shopping habits. The Finance Secretary should knock this new tax on the head.’
When it opened in 2011, Amazon’s Dunfermline facility was valued at £4.2million. This was cut to £3.78million after the company appealed – reducing its annual rates bill by around £200,000.
The firm appealed again after revaluation last year estimated the property is worth £4.1million – leaving Amazon facing a £2.07million rates bill. Appeals were also filed for a workshop in Gourock, Renfrewshire, and a distribution centre in Whitburn, West Lothian.
An Amazon spokesman declined to comment on the proposals directly but said: ‘We pay all taxes required in the UK and every country where we operate.
‘Corporation tax is based on profits, not revenues.
‘We’ve invested over £9.3billion in the UK since 2010. This year we plan to create 2,500 permanent jobs across the country to bring our UK workforce to over 27,500.’
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