// Amazon to hand over £2m worth of savings from business rates holiday to the UK Government
// The savings was made across its estate of Whole Foods grocery stores in the UK
// It follows similar moves from the Big 4 grocers plus Aldi and Lidl
Amazon has reportedly agreed to pay the UK Government £2 million worth of business rates relief from its bricks-and-mortar grocery chain Whole Foods.
According to real estate advisory firm Altus Group, Amazon would have received a business rates holiday of £2 million for its seven-strong chain of Whole Foods stores located in London and Surrey, despite being classified as an “essential” retailer and remaining open during the two national lockdowns this year.
Half of that total derives from Whole Foods’ Kensington High Street store in London, which was entitled to £1 million in business rates relief, according to Altus Group.
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Amazon’s network of depots and warehouses are not eligible for the one-year business rates holiday.
A source from Amazon has told Retail Gazette that the online giant has now decided to hand over the savings its network of UK Whole Foods shops have made through the Chancellor’s one-year business rates holiday.
Retail Gazette has contacted Amazon UK office for further details.
The move comes after German discounters Aldi and Lidl, and Big 4 grocers Tesco, Sainsbury’s, Morrisons and Asda, all announced this week that they would hand back a combined total of almost £2 billion in business rates relief to the UK Government.
Two other retailers that have been allowed to stay open through lockdown as they were classed as “essential”, Pets at Home and B&M, have also announced they would hand over their savings from the business rates relief.
Despite pressure mounting for other essential retailers to follow suit, Waitrose, Marks & Spencer and Co-op have said they would not hand over what they have saved because they were needed to offset Covid-related costs.
The one-year business rates holiday was announced in March by Chancellor Rishi Sunak, aimed at helping retailers and hospitality firms forced to close their high street premises due to the Covid-19 pandemic.
Last month Altus Group projected the UK’s Big 4 grocers and their German rivals would save about £1.87 billion as a result of the one-year business rates holiday.
Altus Group added that the total saving for all “essential” retailers is about £3.03 billion, from a total business rates bill of £10.1 billion.
Amazon’s decision to pay back its tax relief from Whole Foods comes after it told a parliamentary inquiry last year that it paid just £63.4 million in business rates in 2018 – on the back of sales of £8.77 billion.
In written evidence last January, Amazon said it paid business rates on about 94 buildings and on a number of locker sites in the UK.
Nonetheless, its business rates payment was almost £40 million less than high street giant Next, despite clocking up more than double the sales in the UK than the fashion retailer.
It also compares to M&S’s £184 million of business rates on annual sales of £10.7 billion.
B&M has called on the UK Government to create a level playing field that requires all “essential” and online retailers to contribute proportionately in terms of taxation and business rates.
Meanwhile Tesco has previously urged the government to impose a two per cent online sales tax to help pay for a cut in business rates for shops, saying the current system is unfair and was damaging communities across the country.
“It is crucial that government ensures future support is targeted to where it is needed including funding the Valuation Office so it can expedite settlement of the tens of thousands of formal Challenges against business rates assessments that must now be reduced to reflect the impact of Covid ahead of next year’s bills,” Altus Group head of property tax Robert Hayton said.