Chancellor Reeves is considering a new ‘Amazon tax’ aimed at online retailers.
- The proposed tax seeks to balance competition between online and high street retailers.
- This initiative is part of a broader reform of property taxes in the UK.
- More than 70 retail CEOs have expressed support for a change in business rates.
- Labour’s manifesto includes a focus on equalising retail opportunities in England.
Chancellor Rachel Reeves is reportedly planning to introduce a new tax scheme targeting online retailers to create a more equitable environment for high street businesses. The so-called ‘Amazon tax’ would aim to increase the business rates for retailers operating predominantly online, such as Amazon.
According to reports, this potential tax reform is part of a widespread overhaul of property taxes within the United Kingdom. The objective is to rectify disparities in the business rates system and provide a level playing field for high street and online businesses.
Ahead of the upcoming Budget announcement scheduled for 30 October, it is speculated that Reeves may launch a consultation exploring various aspects of the proposal. A significant focus would likely be on examining Amazon’s tax contributions concerning its UK warehouses.
The Labour Party’s manifesto, released prior to July’s election, underscores its commitment to replacing the current business rates system in England. This change is designed to foster fair competition between high streets and online giants, encourage investment, reduce vacant properties, and promote entrepreneurship.
Following the latest consumer price index (CPI) inflation data from the Office for National Statistics (ONS), the retail sector could potentially face an additional £140 million in business rates. In light of this, over 70 leading retail CEOs have endorsed a letter advocating for a ‘Retail Rates Corrector’, which proposes a 20% reduction in business rates for retail properties.
The proposed ‘Amazon tax’ could significantly impact both online and high street retail dynamics in the UK.
