Retailers call for level playing field over tax

Online retail giants such as American company Amazon have been heavily criticised for paying little or no tax despite making huge sales in the UK.

‘Bricks and mortar’ retailers are calling on the Government to take action and level the playing field at a time when high street retailers are having to cope with escalating rents and rates.

The British Retail Consortium said the round table will be made up of members from all parts of the retail sector.

Its director general Helen Dickinson said: “The British Retail Consortium is looking at the relationship between the fast-developing retail landscape and the tax regime – now and for the future.

“The reality is that retail is a people and property intensive sector and, while the reduction in headline corporation tax is valuable, other taxes on both people and property have continued to rise.

“This is an ongoing discussion and it’s important to consider carefully how the tax system can best meet the interests of consumers, economic growth, stability and the retail sector as a whole over the longer term.”

The chief executives of Sainsbury’s and B&Q have met Danny Alexander, treasury chief executive, to state their case.

Ian Cheshire, chief executive of B&Q parent Kingfisher, said stores want a level playing field, otherwise the alternative is that more high street shops will close.

“The increase in rent and rates is squeezing the high street, forcing the shuttering of shops and leading to higher vacancy rates. For each £1 of sales, the online guys pay a lot less tax and we need a strategic rethink.

“We are putting together a working group to find a constructive way through this.”

Business rates rose by 2.6 per cent in April at a time when a number of retailers including Blockbuster, HMV and Jessops have all collapsed.

Gordon Singer, tax partner at PwC Leeds, said: “Governments looking for stable tax revenues have rebalanced business taxes so there is less reliance on corporation tax.

“For every £1 of corporation tax, the UK’s largest retailers now pay almost £2.40 in other taxes out of their profits. Randal Casson, retail sector leader for PwC in Yorkshire, added: “High business rates represent a significant burden for those still trying to balance physical stores with online retail.”

Edward Ziff, chief executive of Leeds-based Town Centre Securities, which owns The Merrion Centre, said: “The idea that certain online retailers can move their business to the Channel Islands or wherever to engineer a lower tax environment does seem unfair to other retailers. Any playing field has to be as flat as it can.

“The retailers who aren’t paying tax, I’m not sure they care. Amazon are humongous. The fact that these online retailers are enjoying tax-free retailing raises questions.

“We’re calling on the Government to create a more level playing field. It does seem unfair that Amazon can operate like this. They are just so powerful.”

He added that the Merrion Centre is focused on value retailers so they are less influenced by the internet. However, its biggest tenant Bradford-based Morrisons recently signed a major deal with internet grocery delivery company Ocado to launch an online food shopping operation by next January.

Trinity Leeds, the new £350m Land Securities development which opened its doors in March, is also fighting for its tenants to get a fairer tax regime.

Gerald Jennings, Land Securities’ portfolio director for the North, said: “There should be a level playing field to enable all retailers, online or physical, to compete effectively and fairly.

“One can understand their calls on the Government.”

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