Amazon has actually been criticised for paying less in service rates than British traditionals merchants.
The online retail giant’s current monetary results exposed that UK sales for 2020 totalled $26.5 bn (₤ 19.3 bn) – a 51% jump from $17.5 bn in 2019.
Amazon added that its business rates expense for 2020-2021 concerned ₤ 71.5 m – simply 0.37% of its retail sales.
Researchers state this is far lower than what the retail sector generally pays.
Amazon insists that it pays its tax and has actually created countless tasks in the UK.
Business rates are calculated by taking a look at a residential or commercial property’s rateable value and increasing it by a tax rate set by the federal government. A new tax rate enters impact at the start of each fiscal year on 1 April.
According to figures from the Office for National Data (ONS), full-year retail sales at physical look for the 12 months ending 31 December 2020 fell 10.3% from ₤ 318.5 bn in 2019 to ₤ 285.8 bn.
Retail consultant Altus Group states that traditionals merchants would have paid ₤ 8.25 bn in service rates in 2020, had they not been provided a tax holiday due to the pandemic.
It states the figure was determined using rateable values, multiplied by the 2020 tax rate. The ₤ 8.25 bn figure amounts to 2.9% of overall retail sales, which is much greater than what Amazon pays.
For instance, Arcadia – which owns Topshop, Burton and Dorothy Perkins – would have had to pay ₤ 91m in organization rates on its 444 shops in 2020, had there not been a tax vacation, Altus Group says.
A Treasury spokesman said: “We want to see growing 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 modifications online shopping brings.
” Our business rates examine require evidence included questions on whether we must move the balance in between online and physical stores by introducing an online sales tax. We’re considering reactions now.”
Independently, the Centre for Retail Research (CRR) calculated the business rates paid by physical stores in 2019 and found that they paid ₤ 7.17 bn in organization rates, or 2.3% of their total retail sales in 2019.
The 2 organisations said that Amazon, which has near 100 websites in the UK, including circulation storage facilities and lockers on High Streets, is not paying sufficient tax.
Nevertheless, their estimations do not include corporation tax, which is currently at 19% of profits.
Debate over digital services tax
Amazon would not discuss the computations made by Altus Group and CRR.
A spokesman for Amazon stated: “We’ve invested more than ₤ 23bn in tasks and facilities in the UK because 2010.
” Last year we created 10,000 brand-new tasks and recently we revealed 1,000 new apprenticeships. This continued investment helped add to a total tax contribution of ₤ 1.1 bn during 2019 – ₤ 293m in direct taxes and ₤ 854m in indirect taxes.”
The government is presently examining the method which business rates system works, and is also individually thinking about a 2% tax on online sales and services.
But organization lobby group the Confederation of British Industry (CBI) has alerted that any tax rises would position additional pressure on services that are currently struggling due to the pandemic.