NEWS

Possible tax for online retailers as Amazon called to account over delivery claims

Published on: 13th August 2018

Philip Hammond is considering introducing a special retail tax, while the ASA will rule that Amazon’s offers of “unlimited one-day delivery” are misleading.

Philip Hammond has said that he is strongly considering introducing a so-called “Amazon tax” on online businesses, in an effort to aid struggling high street retailers. He warned that the high street would have to make long term changes, saying: “We’re changing our shopping habits. More and more of us are buying online. Britain has the biggest percentage of online shopping of any major developed economy. That means the high street will change. We’re very clear that you have to support the high street through that process of change.”

While the chancellor has steered clear of any plans to reform business rates, as has been widely called for by both business owners and his political opponents, he indicated an intention to level the playing field between online businesses and their high street competitors. which tend to pay far more in taxes and rates.

Philip Hammond stated: “We want to ensure 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. The EU has been talking about a tax on online platform businesses, based on value generated. That’s certainly something we’d be prepared to consider.”

Meanwhile, there is further bad news for Amazon, as The Times has reported the retailer is to be banned from claiming guaranteed next-day delivery via its Prime service.

The Advertising Standards Authority (ASA) is set to rule that the company’s offers of “unlimited one-day delivery” are misleading, and such claims must be removed from the website and advertising messages.

In its ruling the ASA said it had found evidence that a “significant proportion of Prime-labelled items were not available for delivery the next day”.

Amazon will be forced to change how it markets Prime, or face further action from the watchdog.

Amazon said that Prime still offered “fantastic benefits”. “The expected delivery date is shown before an order is placed and throughout the shopping journey and we work relentlessly to meet this date,” claimed a spokesperson.

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