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UK: Amazon online sales tax mooted amid calls for retail reform


Amazon saw sales in the UK increase by 51% to almost £20b last year as consumers relied heavily on online shopping during the pandemic.

The Sunday Times has reported that the chancellor is considering targeting companies who have cashed in during the coronavirus crisis, according to Treasury sources. Plans are reportedly being considered for an ‘excessive profits tax’ on companies which have seen a spike in profits such as Amazon, which saw sales in the UK climb by 51%. Online retailers, food delivery firms, supermarkets and parcel delivery firms could be also be subject to a one-off Covid ‘windfall tax’.

A Treasury spokesman said: “Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an online sales tax. We’re considering responses now.”

The comments have reopened the debate on how to fairly tax retailers.

Former minister Tobias Ellwood has urged the government to make Amazon and other internet giants ‘pay their fair share’, warning that high streets were being emptied of shops, while Amazon paid ‘derisory amounts of tax’. He said: “The task may be daunting. But what better time than now, when governments seeks ways to repair the huge economic damage caused by coronavirus?”

Chief executives from 18 businesses, including Morrisons, Asda and Waterstones, have written to the chancellor demanding a level playing field when it comes to tax. The retailers say the current system puts those with large estates at a disadvantage to their online competitors. Tesco CEO Ken Murphy has gone a step further and supported a 1% sales tax be levied on online competitors.

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