Amazon tax bill to rise by £29m next year

Amazon’s business rates are reportedly set to rise by around £28.75m next year, as next year’s business rates are set to heavily impact online retailers, according to new analysis from real estate advisor Altus Group.  

It warned that the online giant may be faced with paying £100m in extra tax over the next three years following the chancellor’s autumn statement, taking into account inflation and before any relief is claimed. 

Altus Group’s analysis of official government data found that across Amazon’s fulfilment centres, data centres, corporate offices, tech hubs, delivery stations and headquarters in England and Wales, its total rateable value will rise by £56.16m, up 35%, from £160.64m to £216.80m next April. 

Amazon’s 7,000 sq metre delivery station located on Woodlands Industrial Storage Estate in Longtown Carlisle saw the biggest percentage increase in rateable value, up 145% from £154,000 to £377,500.

Meanwhile, its Tilbury site, the company’s largest in the UK, has seen its rateable increase by 74%, or £5.26m, to £12.34m. 

Altus Group noted that when the revaluation comes into effect next April, Amazon will have 10 large distribution warehouses with a rateable value more than £5m up from just one currently.  

It comes as occupiers of industrial buildings are at risk of financial collapse, facing “huge” hikes in tax next year amid soaring costs, with Altus Group warning that the rapid rise of e-commerce during the pandemic “hugely and temporarily” distorted the property market. 

It warned there are more than 550,000 industrial buildings across England and Wales which will see their overall rateable value, used to calculate the business rates tax, rise 27.1%, up £3.95bn from £14.57bn to £18.52bn under next year’s revaluation. 

New rateable values, which will form the basis of business rates bills from 1st April 2023 until 31st March 2026, are based upon a valuation date of 1st April 2021. 

Robert Hayton, UK president at the real estate adviser Altus Group, said: “Most industrial buildings aren’t big sheds occupied by online retailers but house economy incubators, start-ups, and employment supporting manufacturers. It feels like the valuers of the new draft lists have deployed a one size fits all approach, and this could be hugely damaging.

“It came as no surprise to see large increases for e-commerce sheds reflecting supply and demand immediately prior to the valuation date, but the suspicion is that this market distortion has been applied across all industrial buildings which is likely to lead to hardship for many struggling businesses.”