Britain’s business rates regime needs ‘policy change’, warns eBay boss

Ebay's European chief has called for reform to the business rates regime in the UK

Credit: Reuters

Britain must reform its business rates and "tighten up" the digital services tax to help small retailers thrive in a digital age,  the head of eBay Europe says today.

Writing in the Telegraph, Rob Hattrell warns that "we need to think about the kind of businesses we want to see on our high streets – and incentivise a new kind of economy. "

He claims an urgent reform of business rates — which are charged on most non-domestic properties, including pubs, restaurants, and shops — is the first step. The taxes are calculated based on a property’s “rateable value”, or the estimated price the property would fetch on the open market.

Chancellor Rishi Sunak has implemented a holiday on tax rates until April but business groups have called for the stay to be extended.

"The small businesses who use our platform want to keep running physical shops and told us that Rates was one of the biggest bills they have to pay," says Mr Hattrell. 

“We have to help more small businesses succeed offline as well as online.”

The eBay chief also believes the Government must “tighten up” the digital sales tax. The levy, which was introduced in April, charges 2pc on revenues generated in the UK from search engines, social media websites and online sales by internet companies like Google, Facebook and Amazon. It applies on revenues over £25m for companies with more than £500m in sales worldwide

The tax has been criticised after reports suggested that businesses would just pass the cost onto their consumers. In September, Amazon increased its fees to sellers by 2pc.

Ebay Europe chief Rob Hattrell has called for reforms to both the digital services tax and the business rates regime

Credit: Doug Peters

 Mr Hattrell says his company had instead “absorbed the tax” despite it costing the business more money.

“This was brought in to rebalance our economy and ensure platform businesses were contributing fairly,” he says.

“So it’s extraordinary that some platform businesses have simply passed the tax down onto small UK businesses who trade on their websites.”

Retailers faced significantly lower footfall in 2020 as the number of shoppers on British streets fell by more than two-fifths, according to figures from the British Retail Consortium.

Mr Hattrell questions the assertion that ecommerce had killed the High Street and says that there was “no doubt” consumers had been “empowered” by smartphone retailing.

“But for every Debenhams and Arcadia, there’s also a Greggs or a Next,” he says.

“These are firms that have adapted, not just once, but again and again in the face of economic change and new consumer habits.”