A York business leader has launched a campaign to save the High Street – by making the online retailers pay their fair share.
York Retail Forum chair Phil Pinder says Amazon and the other online stores should pay business rates, just like physical stores.
He says this will end the injustice which sees smaller shops paying more in taxation than these giant conglomerates – and raise billions for a cash-strapped exchequer.
Phil was talking on the first episode of BizMix – his new weekly show on YorkMix Radio.
He said that councils in the area, and organisations like the York BID, have done an enormous amount to help businesses in the last year.
“But to be honest, it’s all going to be for nothing if we don’t fix one crying out issue, and that is business rates,” he said.
“Today, we’re going to start campaigning on YorkMix to level that playing field with one simple idea. And that’s that websites should have a rateable value.
“Business rates are sort of based on footfall – so the busiest shopping centres like Oxford Street in London, that’s where you pay the highest business rates.
“So why shouldn’t the websites that are getting the busiest footfall in terms of clicks pay the highest business rates based on the number of hits that their website gets?”
Generate billions
Phil says that Amazon, the biggest online retailer, paid only 0.37% tax on its UK turnover in 2020. A supermarket chain would pay 4-5%.
“Amazon generates sales around £20 billion a year and avoids business rates by not having many physical shops on the High Street. Business rates for smaller shops, for example, would be around 5% of their turnover.”
If Amazon was made to pay this too, “that’d be a billion pound in extra tax for Rishi Sunak at the Treasury. That’s around 40,000 nurses on a fully qualified rate for the NHS.”
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Chains like John Lewis were closing stores – including their one in York – “simply because they feel they can make more money online where there are no such taxes.
“Let’s get them back into the shops and level that playing field and we will save the High Street.”
In the coming weeks he will reveal more about how everyone can get involved in the campaign.
“We’re even going to try it and see if we can get it to a local MP who happens to be the Chancellor of the Exchequer as well – see if we can get a meeting Rishi Sunak and chat this idea free with him.
“It’s a simple idea. It’s going to generate him millions – who wouldn’t want to hear it?”
Fundamentally unfair
Business rates are fundamentally unfair, Phil argues. “The more prominent position you’re in, the more you will pay.
“A typical smaller shop in York Shambles will have a rateable value of about £15,000 to £20,000 a year. That means you have to pay about 45% of that as tax – it might even be 48%.”
At the bottom end, there is a small amount of rates relief. “But the top end, you can basically negotiate what you want and end up paying very little.
“This hinders smaller businesses who end up paying lots more than bigger businesses. And if you trade online, you don’t pay business rates at all.”