Amazon owed £3m tax rebate amid Rugeley floor space row Published duration 24 January

image caption A local council owes Amazon about £3m following a battle over floor space

Amazon is to get a multimillion-pound tax rebate after a legal row over the size of one of its warehouses.

Cannock Chase District Council will have to repay the online retail giant in the region of £3m and has warned this will "severely deplete" its funds.

The authority said business rates on the site in Staffordshire were revised after Amazon argued its mezzanine floors did not count as floor space.

Amazon said its payments locally were part of its £18bn UK investment.

Critics say the company, one of the richest in the world, should be paying higher not lower business rates, and complain there is no "level playing field" between Amazon and other retailers.

The firm has previously come under fire for the amount of UK corporation tax it pays.

image copyright Getty Images image caption Amazon appealed over its Rugeley site's rateable value

The local authority says while financial details are still to be ironed out, it expects to repay Amazon about £3.2m overall, with the refund back-dated to the 2011 opening of the site in Rugeley.

Council estimates also suggest Amazon's ongoing liability will reduce from £1.7m to £1.25m annually, following the revaluation.

Stuart Richards, of union GMB West Midlands, said: "It looks like Amazon is happy to rely on our vital public services, but then pay as little as possible to actually support them."

A question of flooring had unfairly skewed recalculations in Amazon's favour, the council's town centre regeneration boss said.

Citing an economic "blow", Gordon Alcott added Amazon was additionally benefiting from its site being deemed "basic".

Original rates appealed by Amazon had related to the occupied floor area, Mr Alcott said, with rent payable per square metre. But a revision was made "due to mezzanine floors not counting" as floor area.

As Amazon, he added, branded the Rugeley site a fulfilment centre - in that it supplied goods direct to the customer - the rates system saw it as a "basic" warehouse rather than a retail one.

"[This] means that Amazon is paying substantially less than retail warehouses, and a fraction of the cost per square metre of high street shops."

Saying he felt sorry for town centres, Mr Alcott said there was not a "level playing field".

image copyright Getty Images image caption The council says a fall in income generated by the local site could hit services