Making stacks.. paying less tax
Amazon deliver just 6% on declared profits as UK sales soar to £8.8bn
AMAZON rang up record UK sales last year as their declared profits here soared three-fold – yet slashed their corporation tax bill by over a third.
An investigation has found the online giants pay just a fraction of the corporation tax of their High Street rivals, levied at 19 per cent on company profits
Similarly sized retailers such as Marks & Spencer, John Lewis and Dixons Carphone declare paying more than 20 times as much corporation tax while shelling out more than double on staff wages.
Amazon’s biggest UK firm, Amazon UK Services, paid £4.6million in corporation tax last year, their lowest since 2012.
That was down 36 per cent on the £7.4million they paid the year before, despite declaring £72million profit, triple that of 2016.
The revelation comes after boss Jeff Bezos, 54, was last month revealed to be the richest man in modern history, with a fortune of £113billion, leaping £41billion ahead Microsoft’s Bill Gates.
Alex Schlagman, founder of SaveTheHighStreet.org, said: “The high street is the UK’s largest private sector employer, representing hundreds of thousands of independent businesses not using complex offshore structures to reduce their tax bills.
“It’s in the interest of all UK citizens that we support the high street and level the playing field with large online-only retailers.”
Martin McTague, of the Federation of Small Businesses, said: “We need to rebalance the taxation system. As things stand, business rates are rising while corporation tax is coming down.
“If we want to breathe life back into our high streets, that needs a rethink.”
Filings by Amazon Inc in the US revealed the firm’s UK sales hit a record £8.8billion in 2017, up 25 per cent in a year.
But Amazon UK Services, who runs the firm’s warehouses and support services and employ nearly 20,000 people, only declared £2billion of revenue.
It is believed much of the rest goes through their larger Luxembourg subsidiary, and it is not known how much UK corporation tax it pays.
Tax expert Professor Richard Murphy of City, University of London, said: “Amazon are still playing games in the UK. “In the only accounts they publish for the UK, they’re declaring less than a quarter of the sale they really make here. “It looks as though they pay less tax here than they should as a result. But we don’t know if that’s the whole story, or not. “Amazon are still leaving us in the dark.” Shadow Business Secretary Rebecca Long-Bailey said: “Our high streets are falling to their knees as a result of lacklustre public
investment, crippling business rates and no support or strategy from this Government.
“At the same time, they let corporations like Amazon get away with paying so little in tax.
“This morally bankrupt Government also watch on as Amazon’s profits continue to soar while their workers are forced to endure Victorian working conditions.
“The next Labour government will implement thorough measures to crack down on tax dodging by the super-rich and big corporations.”
Amazon insist they pay more corporation tax than the £4.6million after stopping billing UK customers through Luxembourg. But they are refusing to reveal their total UK tax bill.
The firm said yesterday: “We pay all taxes required in the UK and every country where we operate.”
Amazon also claimed that their corporation tax bill has been reduced as a result of generous share payments to staff, worth £1000 a year to warehouse operatives.
They also point to billions of pounds’ worth of investment in the UK, which has hit their profits.
A spokesman said: “In May 2015, to ensure we had the best business structure to serve our customers going forward, we established a local country branch of [Luxembourg subsidiary] Amazon EU Sarl in the UK, with all retail revenues, expenses, profits and taxes due now accounted for in the UK. “Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment. “We have invested over £9.3billion in the UK since 2010, including last year opening a new head office in London alongside development centres in Cambridge and London.” Working conditions in Amazon’s warehouse in Tilbury, Essex, were revealed last year.
A reporter found toilet breaks were timed, staff were given impossible targets and workers were falling asleep on their feet.
Ambulances were regularly called to the depot, where workers faced the sack if they failed to pack at least two items per minute.
Amazon said: “Amazon provides a safe and positive workplace with competitive pay and benefits from day one.
“We are proud to have created thousands of permanent roles in our UK fulfilment centres in recent years.
“As with most companies, we expect a certain level of performance. Targets are based on previous performance achieved by our workers.”