Swinney Signals Online Sales Levy: What an 'Amazon Tax' Would Mean for Scottish SMEs

Scotland's First Minister has dropped the clearest hints yet that an online sales levy — colloquially dubbed the 'Amazon Tax' — could be coming to Scotland. For independent retailers and high-street businesses, it's potentially the most significant retail policy signal in years. Here's what we know, and what you should be doing about it now.

John Swinney has indicated, in terms stronger than any previous public statement, that the Scottish Government is seriously considering an online sales levy — a charge on goods sold via large digital platforms that would, in theory, level the playing field between e-commerce giants and physical retailers. The move has been anticipated by Scottish retail trade bodies for some time, but a signal from the First Minister's office shifts this from policy speculation to live political intention.

The so-called 'Amazon Tax' concept has been circulating in UK and European retail policy circles for several years. The basic logic is straightforward: online-only retailers — particularly the largest platforms — operate with structural cost advantages over bricks-and-mortar businesses, not least because they pay significantly lower business rates per transaction. According to the British Retail Consortium, the business rates burden on physical retailers is disproportionate, with high-street shops paying approximately £7.4 billion annually in rates while their digital competitors shoulder a fraction of equivalent costs relative to revenue.

The Scottish Government has long argued that the current business rates system disadvantages independent and local retailers — a position backed by research from the Fraser of Allander Institute at the University of Strathclyde, which has consistently highlighted the structural inequities pressing on Scotland's town-centre economies. A well-designed online levy could, in theory, fund rates relief for physical SMEs or be hypothecated directly into local economic development. In theory. The design detail matters enormously, and that's precisely what Swinney has yet to reveal.

For Scottish SMEs, the picture is genuinely mixed. If you're a Leith deli, an independent bookshop on Nicholson Street, or a boutique hardware store anywhere outside a retail park, a rebalancing of the tax burden between digital giants and physical shops is welcome news — assuming the relief flows to you rather than disappearing into general revenue. But if your business model involves selling through Amazon Marketplace or other large platforms, or if your supply chain depends on those platforms for logistics and fulfilment, a new levy could translate into higher costs being passed upstream to smaller sellers. The policy is aimed at Amazon; the collateral impact could reach far wider.

Westminster has to date resisted an online sales levy despite sustained pressure from the retail sector, with the Treasury wary of its legal complexity under current trade frameworks and of lobbying from large digital platforms. Scotland's devolved tax powers — which include non-domestic rates — give Holyrood a credible route to act independently, and Swinney's comments suggest the political will may now be there. According to the Scottish Retail Consortium, Scottish high streets have faced persistently higher vacancy rates than the UK average since 2020, making action on this front both economically and politically timely for the SNP Government ahead of the 2026 Holyrood election.

What this means for you: If you run a physical retail or hospitality business in Scotland, watch this space — an online sales levy, done right, could mean meaningful rates relief for the first time in years. If you sell via Amazon or other large platforms as part of your revenue mix, start modelling what a 1–2% levy on gross platform sales might mean for your margins, because platforms rarely absorb new costs quietly. Either way, respond to any Scottish Government consultation on this when it opens — this is one policy where SME voices will genuinely shape the outcome.