AMAZON WILL BE FORCED TO PAY SCOTS TAX
Online giants to be hit with new levy – to help ailing High St
AN ‘Amazon tax’ forcing online retailers to pay more is set to be introduced next year in an attempt to rescue ailing Scots high streets.
The Mail can reveal that the Scottish government is to press ahead with plans that will allow councils to impose the business rates levy.
Money raised from the scheme – dubbed a ‘robin Hood’ tax because it takes from rich internet giants and gives to struggling high street stores – will help to fund initiatives aimed at reviving town centres.
An SNP minister said it was time the multinationals paid their ‘fair’ share.
The legislation will allow three local councils to pilot a business rates levy for online retailers or out-of-town operators. if judged a success, the scheme will be rolled out across Scotland. The move was recommended by an independent review of business rates headed by former royal Bank of Scotland chairman Ken Barclay.
A new levy would be a victory for the Mail’s Save Our High Streets campaign,
which has called for a fair tax on internet retailers and reform of business rates.
Public Finance and Digital Economy Minister Kate Forbes confirmed that a Bill will be introduced early next year.
She said: ‘Amazon, like every other retailer, should be paying its way and should be paying fair taxes. The purpose of the Barclay Review of business rates is to make sure that anybody doing business in Scotland is paying its way.’
A Scottish Government consultation on the issue recently closed. The Barclay Review proposed that from 2020, a small number of councils should be able to increase rates paid by ‘out-of-town or predominantly online businesses’.
A decision is still to be made by ministers on whether to also allow councils to make retailers based out of town, such as in retail parks, pay an extra levy.
Miss Forbes said she could not ‘dictate’ what local authorities ‘choose to tax and what they use the proceeds for’ but added that she was excited about making ‘a far more level playing field’.
Fife Council, where Amazon has its giant Dunfermline distribution centre, is interested in being involved in the pilot. 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, according to publicly available documents.
It has lodged appeals for three of them, including the Dunfermline depot, its biggest distribution centre in the UK. When it opened in 2011, the facility was valued at £4.2million. This was cut to £3.78million after Amazon appealed, reducing its rates bill by around £200,000. It appealed again after revaluation last year estimated the site’s worth as £4.1million – leaving the firm facing a £2.07million rates bill.
Appeals were also filed for a workshop in Gourock, Renfrewshire, and a distribution centre in Whitburn, West Lothian.
Critics say the rise of the digital economy has created an uneven playing field on tax. The Jenners store in Edinburgh, for example, saw its rateable value jump from £1.6million to £2.2million last year.
But Ray Charles, of the Chartered Institute of Taxation, said: ‘The real issue would come from what would we tax? It could range from half a per cent on their transaction value, if you like, but you still wouldn’t get a situation where you easily identify an amount levied on the taxable profits of that business.’
Mari Tunby, of CBI Scotland, warned: ‘The reality is that designing a tax that is so narrow it only hits a handful of global companies is virtually impossible.’
A spokesman for Amazon said: ‘Amazon pays substantially more in business rates to the Scottish Government than suggested by the research, and our business rates bill increased in 2018. We pay all taxes required in every country where we operate.’
THE Mail’s Save Our High Streets campaign has been warmly welcomed by public and businesses alike and so there has to be recognition that SNP plans to apply additional charges – a so-called Robin Hood tax – to online retail giants are a step in the right direction.
After all, internet-based businesses have done much to suck the lifeblood from traditional shopping streets, leaving so many as wastelands of charity shops and to-let signs, as they benefit hugely from their lack of expensive ‘bricks-and-mortar’ premises. But there must also be some caution. Nothing in the past 11 years of SNP rule indicates the party grasps the complexities of how businesses operate and tax is a very blunt instrument.
It would be unfair in the extreme if global giants banking billions each year simply passed on any additional charges direct to their customers, and we must remember that they are also employers themselves.
Meanwhile, the SNP’s track record on tax is less than reassuring. It proudly declared the Land and Buildings Transaction Tax was the first levied by a government in Edinburgh in 300 years.
Barely had the back-slapping finished than LBTT was subject to an embarrassing rejig and has since been plagued with overestimates of how much it will raise, leaving black holes in budgets that have to be filled from elsewhere.
Similarly, Finance Secretary Derek Mackay has saddled workers with the highest income tax rates in the UK, while running an overall underspend. And he has the cheek to call this approach ‘progressive’. Our high streets need help – but are the SNP adroit enough to deliver?