BID challenges Chancellor about Amazon paying only twice as much tax as Southampton businesses alone

Ahead of Wednesday’s budget announcement, GO! Southampton is urging the Government to abolish the current business rates system in the city to throw its high street businesses a survival line post pandemic.

The city’s Business Improvement District (BID) is now ramping up efforts to persuade the Chancellor to make urgent reforms of business rates in his Budget Statement after revealing its members pay over £36million per year on the tax. Controversially, online giant Amazon pays just twice that, £70million for its operations across the entire country.

GO! Southampton has already written to the Chancellor with a list of eight requests to relieve Southampton businesses of the taxation rates that are having a detrimental effect on the city’s businesses and introduce further financial help in the form of loans and grants. Other requests listed in the letter included extending furlough and continuing VAT relief.

GO! Southampton Chair, Tim Keeping said: “Our members are facing a real struggle. Many had already seen massive increases in their business rates, including an average 31% for night-time economy operators, following the 2017 revaluation. We want to see business rates relief extended for a further financial year as an absolute minimum– but would far rather see this time used for the old, outdated business rates system to be torn up completely and replaced with a system that better reflects the value of the business operating from a premise. High Street retail has experienced a permanent change in shopper behaviour during this pandemic and a key component of a return to vibrant city centres will be the affordability of bricks and mortar for new and exciting businesses to establish themselves, the current Business Rates system just isn’t flexible enough to allow this to happen.”

Giles Semper, Executive Director at GO! Southampton said: “The business rates system has always been unfair and heavily weighted in the favour of online businesses – who often pay very little or in some cases nothing at all.

“We have already written a letter to the Chancellor on behalf of our members, asking him to seriously consider offering further financial help to businesses – or face losing them and closing down the city he grew up in. Now we can see the real figures, and how these compare to the likes of big online businesses, we would like to see the current business rates system torn up and replaced with a system that recognises the fundamental changes in the way that businesses now operate, particularly in the retail, hospitality and leisure sectors, which have been hit hard by the pandemic.”

GO! Southampton states that 82.5% of its 600 member businesses are temporarily closed as a result of the Covid-19 pandemic. The bar and pub industry in Southampton has been hit hard, but it is one of the biggest contributors to the local economy paying £29.7 million in wages and £25.3 million in taxes every year, according to the British Beer & Pub Association.

Giles adds: “The government must step in now before it’s too late and implement a system that’s proportionate, fair and transparent so that businesses are treated more equally.”