Before her debut Budget next Wednesday, Rachel Reeves was fielding demand from the retail sector to either cut business rates on bricks-and-mortar shops or impose a tax on e-commerce giants like Amazon.com Inc (NASDAQ:AMZN).
Reeves is exploring plans for higher rates on larger online retailers, the Telegraph reported, as part of a broader initiative to balance the tax burden between high street retailers and online businesses.
Such moves have been examined since the rise of Amazon, with the latest being a consultation launched by the Treasury in 2022 before the policy was shelved.
A British Retail Consortium spokesperson told the newspaper that problems would not be resolved by "pushing business taxes from one bit of retail to another".
Amazon, which operates over 25 warehouses in the UK to distribute parcels bought on its online platform, paid its first UK tax since 2020 after the end of a "super-deduction" tax break introduced to encourage capital spending.
The £81.3 million in corporation tax paid by Amazon in 2023 was on local sales of £27 billion, with a comparison with Marks & Spencer showing that the US online retailer made more than double the sales but did not pay double the tax.