Amazon confirms it pays UK business rates of only £63.4m

Amazon has confirmed it pays UK business rates of only £63.4m, almost £40m less than Next, despite clocking up more than double the sales in the UK of the clothing and home retailer.

In written evidence to a parliamentary inquiry, the online specialist said its UK sales amounted to £8.77bn and it paid business rates on about 94 buildings and on a number of locker sites in the UK.

The figures indicate that business rates amount to less than 1% of Amazon’s sales compared to 2.5% for Next, 1.8% by Marks & Spencer and nearly 3.5% by Debenhams.

Last year Next paid £100m in business rates on sales of about £4bn; M&S paid £184m on sales of about £10bn and the John Lewis Partnership, which includes the chain of department stores and Waitrose, paid £174m on sales of nearly £12bn.

Struggling Debenhams paid considerably more than Amazon – £80m in business rates on only £2.3bn of sales last year.

The extra tax burden for high street retailers is emphasised by the fact that £2m of Amazon’s rates bill, nearly 3% of its total, related to only seven UK Whole Foods Market stores, according to analysis from the real estate advisory firm Altus Group for the Guardian. Business rates on its High Street Kensington flagship alone amount to nearly £1m.

In a blogpost, Amazon said that in publishing its business rates bill it had showed it paid “tens of millions of pounds more than estimates and more than is paid by many well-known high street retailers”.

It added: “Online sales are still less than a fifth of total retail sales in the UK, and Amazon is a small percentage of that – perhaps a lot less than some people realise.

“We’ll continue working hard to earn customers’ trust and, if we’re successful and British customers choose to shop with us, we’ll continue to invest and create jobs in the UK to meet that demand. And, of course, we’ll continue to pay all the taxes owed in every community that we call home.”

At a meeting of the housing, communities and local government committee on Tuesday evening, Helen Hayes MP asked the high streets minister, Jake Berry, whether he was putting pressure on the Treasury to adjust business rates as those with high street stores were suffering.

“Businesses across my constituency tell me that they have never faced a harder trading environment than they have at the moment. They cite business rates as the single biggest contributory factor, many of them, to the particular pressures that they have faced over the past year,” she said.

Berry said the government was introducing a digital services tax to “level the playing field” but decisions on rates lay with the treasury.