The upcoming October Budget may impose higher taxes on online retailers like Amazon, as Chancellor Rachel Reeves considers reforming business rates for tech giants.
In a move targeting online tech giants, the Chancellor is reportedly examining disparities between the business rates paid by Amazon warehouses and those of high street stores. This investigation aligns with the government’s plans to overhaul a system they claim “disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
The proposed changes have garnered support from the grocery sector, with Stuart Machin, CEO of a major supermarket chain, urging the government to continue their ambitious plans to reform business rates. He also called for more flexibility in how businesses can use apprenticeship levy funds.
However, the potential tax hike has intensified speculation about the government’s intentions to target warehouses used by online retailers like Amazon Fresh. Despite Amazon’s announcement of an £8 billion investment in the UK over the next five years, the company, which ranks among the top 10 largest UK taxpayers, could still face significant tax increases.
This is not the first time Amazon Fresh has faced scrutiny. In July, it was threatened with a formal investigation from the Groceries Code Adjudicator due to supplier concerns over compliance with the Code.
The forthcoming changes to business rates could significantly impact online retailers like Amazon, highlighting the government’s focus on creating a fairer taxation system for both digital and physical businesses.
