How Amazon, China and the HMRC are erasing the British High Street

Is there such thing as a level playing field in business anymore?

The announcement in June that Amazon has increased its turnover and global profitability, but reduced the tiny amount in tax previously paid to the UK’s HMRC annually still further, comes as no surprise. This international behemoth does not believe in contributing to the local infrastructure used by their staff and their transport network. It takes a disproportionate level of income away from our High Street and delivers less in taxation terms.

It further appears from recent press reportage, that the European Union has its own reservations over the voracity of the HMRC to collect the correct amount of VAT and the corresponding Import Duty due from the many Chinese manufacturers shipping goods to the U.K. via, amongst others, the Amazon sales network. The EU suggests that HMRC has failed to collect some £2 Billion in VAT, which infers that some £10 Billion in goods has been imported, the equivalent of the turnover from some 50,000 independent High Street shops, each turning over £200,000 annually.

It was particularly interesting to see Amazon Business, recently provide the opportunity to select VAT applicable pricing options for display, as though paying this tax was optional.

Add to this the little known anomaly the United Nations operated, Universal Postal Union that globally decides on postage rates, which means that both here in the UK and the USA, goods can be shipped by post in packets under 250g from China for as little as 1p and the perfect storm for international competition has been created. Compare this with the cost of a second class stamp for letters at a bare minimum of 56p and you must wonder why such an advantage exists?

Expedited demise of the High Street

It’s no wonder that our High Street businesses are being filleted by these activities. Forced to pay Business Rates disproportionately, within the same High Street in many cases, independent retailers continue to struggle and collect VAT and eventually lose custom to the mighty online retailers whom in turn boost the volume of road useage, road wear and commensurate air pollution with little regard for any attributable cost.

If we cannot tax profit fairly, then we need to modify the taxation methods we use. After all, if there is nothing more certain than Death and Taxes, let’s at least have a level playing field where a fair game of Cricket can be played.

Read more articles about business in the new issue of Insight

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