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Chancellor considers 'Amazon tax' after HoF collapse

Chancellor Philip Hammond has indicated that he is seriously considering introducing an “Amazon tax” in an attempt to level the playing field between struggling retailers and online-only operators.

Hammond told Sky News that he was thinking of introducing a special retail tax on online businesses – if necessary without international co-operation. 

He said: “We’re changing our shopping habits. More and more of us are buying online. Indeed, Britain has the biggest percentage of online shopping of any major developed economy. That means the high street will change.

“We’re very clear that you have to support the high street through that process of change.

“The nature of the offer on the high street is going to change over time. There’s going to be less retail, more leisure, bars and community facilities.”

The news follows the relevation by Amazon last week that its corporation tax tax bill for 2017 had fallen by £2.8m to £1.7m despite profits doubling.

House of Fraser, which went into administration this morning, before being bought by Sports Direct owner Mike Ashley, tried to reduce its property costs through its company voluntary arrangement proposal in June.

John Webber, head of business rates at real estate services company Colliers, by the 2021/22 financial year, told Drapers HoF would have been paying business rates of more than £5m a year on its Oxford Street store. 

Hammond indicated that the country requires new taxation for online businesses as they currently pay far less than their high street competitors: “We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online. That requires us to renegotiate international tax treaties because many of the big online businesses are international companies.

“If we can’t get international agreement to do this, we may have to look at temporary tax measures to rebalance the playing field until we can get international agreements.”

Drapers has contacted the Treasury for comment.

 

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