Tax internet giants to help ailing shops, says Tesco boss

INTERNET giants such as Amazon should pay a new sales tax to support shops on the struggling British high street, the boss of Tesco has said.

Dave Lewis, who has been the CEO of the supermarket chain since 2014, warned that the current business rates system is “unsustainable” as many shops are facing crippling bills on their properties while battling competition from online rivals who pay much less.

Mr Lewis called for high street stores to get a 20 per cent reduction on their business rates, to be paid for with a 2 per cent levy on online retail sales.

He suggested the move could raise £1.5 billion at no extra cost to the Treasury and would reduce the current financial pressure on small shops.

His comments come as a report has found that the level of vacant shop units has hit a four-year high. Retail research firm Springboard said the vacancy rate rose to 10.2 per cent in the first three months of 2019, compared with 9.9 per cent at the end of last year.

Writing in the Daily Mail, Mr Lewis said: “Billions of pounds have shifted online, but the rates system was never devised to account for this. Because the bill is linked to property – not profit – shops struggling to keep the doors open have to pay up, while larger online businesses pay just a fraction. Our business rates system has barely evolved since 1988, yet the way people shop has changed profoundly.”

Amazon paid just £63 million in business rates in Britain last year, despite reporting sales of £8.8 billion. By comparison, M&S pays about £184 million in rates on annual sales of £10.7 billion, while Tesco pays £700 million on sales of £63.9 billion.