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How will an ‘Amazon tax’ impact SME merchants? #TamebayTV [video]

By Dan Wilson August 21, 2018 - 12:03 pm

We’re still considering the various possible ramifications of the mooted online sales tax or Amazon Tax. Welcome to the latest video from #TamebayTV: one of our weekly YouTube updates and this week we look at a variety of stories including the latest announcements and news from marketplaces and the world of ecommerce.

(And if you can’t view the video above, you can find it on YouTube here.)

And don’t forget you can find loads of video content, and subscribe, on our dedicated YouTube channel.

When it comes to the so-called Amazon Tax (which is probably a shorthand term that isn’t that useful or accurate) there is is still virtually no information available about what it might mean in reality. Which does make us fairly suspicious that it could just be an ‘August silly season’ story. However, we’re certain it won’t ‘save’ the High Street: an examination of Business Rates is the better answer on that front.

Here are the stories referenced in the video on TamebayTV:

The UK government wants an international ‘Amazon Tax’ on online sales

3 unanswered questions about Hammond’s ‘Amazon Tax’

Booksellers demand Amazon Tax “quickly”

And we have reported a variety of Amazon stories:

Amazon is considering a UK insurance comparison site

And now showing at Amazon Cinemas…

Amazon Logistics express interest in Homebase stores

And if you want to take a look our recent Delivery Position paper, as mentioned in the video, you can find it here.

  • Mark
    1 year ago

    The point is – as it stands – the government can’t afford to reduce business rates (raises £26bn per year – 2016). Bring in an “internet tax” and there are more options. If the Tories don’t do it, surely Corbyn will.

    It may be sold to the public by calling it a “Save the High Street tax” (though I suspect only some will go to reducing business rates). May be some of the dosh will go to increasing the availability of high speed internet etc

    • 12 months ago

      They don’t have to reduce the amount that business rates bring in, simply get that amount in a different way.

      A very small percentage of turnover (eg. 1% of turnover from all businesses) could be the new form of business tax to replace rates. It is the simplest and most effective way and it doesn’t favour one type of business over another. It would mean a lot of small businesses having to pay something rather than nothing, but it would also remove the obstacle of rates from their expansion plans.

      An internet tax, or save the high street tax, call it what you will, would be a mass of extra work for all those businesses that sell online, which is pretty much all of them. That includes almost every high street store. Say for example Argos does 50% online trade and 50% walk in trade. They’d be paying extra tax on half their sales. How would that benefit them as a high street store?

      Then you’ve got the problem of what do you count as online sales? If someone looks at your website, rings you, comes in and pays cash, does that count? How about the same but they pay card when they come in, or they pay over the phone? There’s a massive amount of red tape and record keeping for you right there. Increased costs for businesses. Cheers, chancellor!

    • James
      12 months ago

      Gav this makes no sense either. A flat 1% tax on turnover doesn’t taken account the type of business. Some businesses are high turnover low margin etc. A turnover tax would penalise those with high turnover while not taking into consideration that they might not be very profitable businesses.

      This type of thinking is typical of Labour / Left wing economists (i.e no thinking)

    • 12 months ago

      @ James

      1% was just an example figure. Perhaps 0.5%, 0.25%, or even less than that.

      This amount could be put on corporation tax, but that wouldn’t deal with the issue of profit dodgers shifting their actual UK made profits over to subsidary divisions elsewhere in the world. That will not change, but a turnover tax on UK based business, they couldn’t avoid.

      Small businesses that currently avoid contributing business rates (like mine) would have to start paying something in, so hardly a lefty idea.

      As for the very low profit margin businesses, there are winners and losers in any taxation system, just as there are under business rates. Which system would produce more winners though?

    • james (different james)
      12 months ago

      a business with very high turnover and very little profit, is generally considered a “poor” business.
      if 1% is going to break them, then so be it. they’re probably due to break as soon as any little thing goes wrong. if they can’t adjust prices to cover (bearing in mind EVERYONE is being hit with the same tax, so they’re not suddenly going to be over-expensive) a single percentage point then something is seriously wrong there.
      Amazon aren’t poor. they deliberately remove profits by any means possible so they don’t need to pay tax, meaning everyone except Amazon loses out, a 1% across the board figure sounds at least fair to my ears.

      and as for “This type of thinking is typical of Labour / Left wing economists (i.e no thinking)” – hardly an intelligent & enlightened statement that, is it?
      they don’t agree with my thinking therefore they’re all stupid?
      excellent argument winner.

    • James
      12 months ago

      Gav, I’m pointing out that any tax on turnover is quite silly and will hit a lot of businesses with a low margin, high volume model (which is why a tax like this doesn’t really exist in most countries)

      https://www.telegraph.co.uk/finance/economics/11237039/A-turnover-tax-is-a-tax-on-investment.html

      Almost every tax is a losing situation. What we should be doing is cutting down costs so we tax less, not more. Could start with our welfare state and NHS if this government had any balls.

  • 12 months ago

    The Amazon tax is the idea of the large corporate landlords in this country ( of which there are many ) who after years of sitting there watching the profits roll in are now struggling as their precious high st golden egg properties no longer generate the income they once did despite their efforts to keep the rents where they where or even keep increasing them. This is why we see so many empty properties in high streets up and down the country. These corporations and pension funds carry a huge amount of clout in government. In many areas there are plenty of people out there with great ideas for high street based businesses but they just cant get them off the ground as the rents are simply too high. The much needed re-alignment of high st property pricing is going to take a long time but shoving in an online sales tax is just going to create more issues than its worth and its only staving off the inevitable. The retail map is changing dramatically, its not going back and cheaper rents and rates are the way to keep it alive not trying to financially punish the new wave.

    • Paul S
      12 months ago

      Spot on Jonny.

  • Paul S
    12 months ago

    People who don’t know anything about trading on the internet assume that we have no overheads. I don’t have a warehouse but many online businesses do. My Ebay, Amazon, and paypal fees would comfortably pay the rent and rates on a small shop, we also pay VAT and corporation tax. Lowering the VAT threshold from £85,000 to £40,000 might be a better idea.

    The high street will be more vibrant when smaller innovative businesses can afford high street shops. More online stores would also choose to have a high street presence. Large high street businesses have made the high street boring.

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