Treasury Minister warns the EU could block moves to impose an ‘Amazon tax’

Treasury Minister warns the EU could block moves to impose an ‘Amazon tax’ amid mounting concern online giants are killing Britain’s high streets

  • Minister Mel Stride warned that Amazon tax could fall foul of EU state aid rules 
  • Chancellor is under massive pressure to slap internet giants with bigger tax bills
  • Britain’s high streets have been plunged into turmoil as chains close their doors 

EU rules could block moves to impose an ‘Amazon tax’ – amid mounting fears online giants are killing Britain’s high streets.

There are growing demands to introduce a new ‘online sales tax’ after it emerged Amazon paid a meagre £1.7m – despite profits hitting nearly £2billion. 

The 20 per cent tax would be slapped on companies which make at least 20 per cent of its sales on the internet. 

It comes as many of Britain’s high streets have been turned into ghost towns as businesses close – squeezed between falling footfall and rising business rates.

But Treasury Minister Mel Stride has warned that strict Brussels’ rules on state aid could block attempts to impose the new tax.

In a letter to the Treasury select committee, he said: ‘The government considers there is a high risk that such a tax would be found to be a state aid.’

EU rules could block moves to impose an ‘Amazon tax’ – amid mounting fears online giants are killing Britain’s high streets (pictured, Amazon)

He said the EU could deem the tax unfair because it would penalise a retailer which sold 21 per cent of its goods online – while letting one that sold 19 per cent on the internet avoid the new tax.

He warned: ‘This could distort competition. The extent of this would need to be judged on the basis of a detailed proposal.’ 

Britain’s high streets have been plunged into turmoil as many of the country’s leading retailers have closed down.

But Treasury Minister Mel Stride (pictured) has warned that strict Brussels' rules on state aid could block attempts to impose the new tax

But Treasury Minister Mel Stride (pictured) has warned that strict Brussels’ rules on state aid could block attempts to impose the new tax

House of Fraser was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley. 

But the well-known department store chain has shut down many of its shops as it scrambles to cut costs.

Toys R’Us, the UK’s largest toy shop went into administration last year, leading to an estimated 2,000 redundancies. 

The electronics Maplin giant has gone bust, closing shops across the country and putting thousands of jobs at risk. 

The baby and toddler chain Mothercare closed 60 shops across the UK putting up to 900 jobs at risk. 

But despite the bloodbath, business rates are set to soar by 14 per cent over the next five years.

 The bill paid by British firms will rise from £29.6billion last year to £33.8billion in 2022-23, according to the Treasury’s official forecasts.

That will spell misery for thousands of shopkeepers and other businesses facing fierce competition from online rivals.

Chancellor Phillip Hammond last year announced that he is looking at introducing new taxes to help save Britain’s high streets. 

He said: ‘I want to ensure that the high street remains resilient and that we also make sure that taxation is fair between businesses doing business the traditional way and those doing business online.

‘That requires us to renegotiate international tax treaties because many of the big online businesses are international companies.’ 

Which high street retailers in Britain closed shops in 2018?

House of Fraser nearly plunged into administration but was rescued at the eleventh hour by Mike Ashley 

House of Fraser nearly plunged into administration but was rescued at the eleventh hour by Mike Ashley 

Last year saw a bloodbath of Britain’s high streets – with many of the nation’s retailers shutting stores and axing jobs. 

Here are some of the big name retailers which lost out as they face fierce competition from the rise of online shopping

Carpetright: The carpet retailer is closing 92 stores across the UK. These closures represent nearly a quarter of all UK Carpetright stores.

Toys R’ Us: The UK’s largest toy shop went into administration leading to an estimated 2,000 redundancies.

House of Fraser: The department store chain was on the verge of heading into administration but was rescued at the eleventh hour by Sports  Direct owner Mike Ashley.

Maplin: The electronics giant has gone bust, closing shops across the country and putting thousands of jobs at risk.   

Mothercare: The baby and toddler chain is closing 60 shops across the UK putting up to 900 jobs at risk.  

Poundworld: Poundworld announced it was going into administration on June 11 after talks with potential buyer R Capital broke down, putting 5,100 jobs at risk. 

Homebase: The DIY chain set to close 42 DIY outlets shut, putting around 1,500 jobs at risk.

Marks & Spencer: The retailer announced in May it plans to close 100 stores by 2022, putting hundreds of jobs at risk. In August stores in Northampton, Falkirk, Kettering, Newmarket, New Mersey Speke, Stockton and Walsall all ceased trading. 

 

 

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