Amazon could face online sales tax problem
Internet retail giants such as Amazon and Asos could soon be hit with an online sales tax.
In a move designed to claw back money the United Kingdom owes after heavy borrowing during the pandemic, it is understood Chancellor Rishi Sunak is considering targeting companies that have done well out of the coronavirus enforced lockdown.
Amazon sales in the UK soared by 51 per cent to almost £20 billion last year, while Asos also saw profits spike.
Amazon and other internet retail giants could be hit with an online sales tax in a move designed to claw back money the UK owes after heavy borrowing during the pandemic.
Treasury sources confirmed Chancellor Rishi Sunak is considering targeting companies that have done well out of the pandemic in order to pay back UK Government debts incurred while supporting industries through the coronavirus crisis.
The move is being considered as part of a review into business rates following a consultation last year.
Amazon sales in the United Kingdom soared by 51 per cent to almost £20 billion last year as lockdown restrictions buoyed the e-commerce giant, with people forced to buy online due to Covid restrictions.
Delivery companies such as Deliveroo and t he online retailer Asos were also among those to see profits spike during the lockdowns of the past 12 months.
The Sunday Times reported that leaked emails showed Treasury officials had summoned tech firms and retailers to a meeting this month to discuss how an online sales tax could work.
The move could be part of a double raid on Amazon as the paper said that Downing Street officials were working up proposals for an "excessive profits tax" on companies that have seen profits surge as a result of the crisis.
A Treasury spokesman said: "We want to see thriving high streets, which is why we've spent tens of billions of pounds supporting shops throughout the pandemic and are supporting town centres through the changes online shopping brings.
"Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an online sales tax. We're considering responses now."
Despite Amazon's booming sales, real estate adviser Altus Group said the retail giant had a tax to turnover ratio of just 0.37 per cent.
Altus said, when looking across Amazon's UK estate including warehouses, offices and its pick-up and dropoff lockers - its overall business rates liabilities were estimated to amount to around £71.5 million at the start of the 2020/21 financial year.