Ex-Sainsbury’s boss calls for Amazon tax clampdown

Britain's tax system should be radically changed to stop pureplays like Amazon having an unfair advantage and being subsidised by the taxes of their rivals.

That’s according to Justin King, former Chief Executive of Sainsbury's, who has called for business rates to be halved, with the lost revenue replaced by a 2% increase in VAT. Another way, he believes, is a delivery tax – “you tax the channel, which is unique when you bypass retail space”.

Speaking to Sky News, he said: "Business rates are arcane. We need to find a different way to tax business activity, one that doesn't fall so heavily on a business like traditional retail, that uses a lot of space.”

"The present system creates an imbalanced playing field. Non-retail businesses don't pay that tax because they don't have stores - internet business is obvious example. When an Amazon delivery comes to your home in that cardboard box, which we all think is a bit excessive, then that box goes in the bin, or to the tip.”

He added: "The process is paid for by business rates - by the retailer who lost that sale, and was out-competed by Amazon, and who paid the tax for the services that Amazon used for free. It is unfair. And the tax system should never be part of the competitive advantage for a business. They should compete on a level basis - that is all the High Street is asking for."

King also claimed that the pressure on British retailers was causing "good businesses to do things they shouldn't have to do in order to survive…We are seeing, for example, Sainsbury's completely change its employment service, going away from paying people for breaks. Waitrose has given its lowest level of bonus for 50 years.”

“Good well-run businesses are not able to commit to their employees in the way they have in the past. These companies still pay people in the proper way, but they are competing with the so-called gig economy, and ultimately that is a massive cost advantage.”