The online retail giant is likely to be among the companies facing big tax hikes in the UK following the Chancellor’s autumn statement, according to Altus Group
Amazon could see its tax bill jump by £29 million next year as a result of changes to business rates that is set to hit warehouses and online retailers the hardest.
The online retail giant is likely to be among the companies facing big tax hikes in the UK following the Chancellor’s autumn statement, according to new analysis from real estate adviser Altus Group.
Meanwhile flagship department stores and hotels could shave millions off their tax bills as bricks and mortar retailers receive greater support.
This is because the Government is shaking up the business rates system and revaluing more than half a million retail properties across England and Wales.
New rateable values, which are used to calculate the business rates tax, will be based upon property values as of April 1, 2021.
One of Amazon’s delivery stations in Longtown, Cumbria, will face a surge in its rateable value by 145%, from £154,000 to £377,500, Altus said.
Amazon’s overall business rates will rise by around £28.75 million next year and could cost the online giant about £100 million in extra tax over three years, taking into account inflation and before any tax relief is claimed.
Amazon has already reported an escalation in the amount it handed over to the taxman after the pandemic-fuelled online shopping boom.
In July, it said its total tax contribution lifted to £2.77 billion from £1.55 billion a year earlier.
However, Altus warned that smaller occupiers of industrial buildings and warehouses are at risk of financial collapse as a result of tax hikes piled on top of soaring costs.
Its UK president Robert Hayton said: Most industrial buildings aren’t big sheds occupied by online retailers but house economy incubators, start-ups, and employment-supporting manufacturers.
It feels like the valuers of the new draft lists have deployed a one size fits all approach, and this could be hugely damaging, he said.
He added that the ‘market distortion’ following the unusual Covid period is likely to lead to hardship for many already-struggling businesses.
In a letter to Chancellor Jeremy Hunt, the UK Warehousing Association said: The antecedent valuation date of April 2021 is unfair: warehousing was supporting the economy during lockdown and consequently values were disproportionately high compared to other sectors.