Ama­zon ac­cused of ‘gam­ing the sys­tem’ on busi­ness rates

The Daily Telegraph - Business - - Business - By Ash­ley Arm­strong

AMA­ZON has been ac­cused of “gam­ing the sys­tem” af­ter it emerged the on­line re­tail giant paid just £63m in busi­ness rates last year, de­spite rak­ing in £8bn sales in the UK.

About £2m of that bill was gen­er­ated from its hand­ful of Whole Foods shops, which are all in prime Lon­don lo­ca­tions in­clud­ing off Pic­cadilly and Kens­ing­ton High Street, ac­cord­ing to fig­ures by busi­ness rates ex­perts Al­tus.

The on­line re­tailer was fi­nally forced to dis­close its rates bill by MPs ex­am­in­ing the fu­ture of the high street.

In a sep­a­rate blog post, the com­pany said that “the story of Ama­zon’s con­tri­bu­tion to the UK econ­omy, through jobs, in­vest­ments and busi­ness rate pay­ments, hasn’t al­ways been clear”. It said pre­vi­ous es­ti­mates of £38m did not take into ac­count its 100 sites across the UK and Ire­land, in­clud­ing its ful­fil­ment cen­tres, Lon­don of­fices, Ama­zon Lock­ers and Whole Foods shops.

Ama­zon’s bill is still seen as un­fair by bricks-and-mor­tar ri­vals suf­fer­ing from the rise of on­line shop­ping but fac­ing ris­ing fixed prop­erty costs in the form of busi­ness rates.

In com­par­i­son, Tesco paid about £700m in busi­ness rates last year while Deben­hams and Next faced bills of £80m. John Lewis paid £172m to the Trea­sury and Marks & Spencer handed over £184m. HMV blamed a “tsunami” of re­tail chal­lenges when it called in ad­min­is­tra­tors last month. The mu­sic re­tailer said it paid £15m on sales of £277m – mean­ing £1 in ev­ery £18.50 go­ing through the tills went on prop­erty taxes.

Paul McGowan, boss of Hilco which owns HMV, took to Twit­ter to ex­press his frus­tra­tion: “I rest my case … tax should be levied on in­come, not lo­ca­tion. And busi­ness rates is a tax.”

The Book­sell­ers As­so­ci­a­tion, which rep­re­sents in­de­pen­dent book­shops, said Ama­zon was “gam­ing the sys­tem”.

Meryl Halls, its man­ag­ing di­rec­tor, said: “The sys­tem needs to change, and the Gov­ern­ment needs to act to rein­vent a rates and tax­a­tion sys­tem that is now bro­ken be­yond re­pair, anachro­nis­tic, no longer fit for pur­pose – and to act quickly and de­ci­sively if we are to avoid see­ing the demise of more high street re­tail busi­nesses, and the longterm jeop­ardy of all high streets.”

Ama­zon said: “On­line sales are still less than a fifth of to­tal re­tail sales in the UK, and Ama­zon is a small per­cent­age of that – per­haps a lot less than some peo­ple re­alise.”

How­ever, re­cent in­dus­try fig­ures have shown the grow­ing shift of shop­pers to on­line, par­tic­u­larly when buy­ing elec­tri­cal and fash­ion items.

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