Amazon pays just £293m tax on sales of £13.7 billion

Amazon came under fire last night after admitting it paid less than £300million in taxes in Britain last year, despite racking up almost £3billion in extra sales.

The online retail behemoth published details of its finances in an effort to be more transparent after being criticised for years for not paying its fair share.

But it incurred just £293million in ‘direct taxes’ last year – an increase of only £73million on 2018, despite the huge increase in sales.

The figures showed business was booming even before the coronavirus crisis fuelled a dramatic surge in online shopping, which has helped make its founder Jeff Bezos the first person worth more than $200billion (£154billion).

But one critic said they were a ‘million miles away from true tax transparency’ while an mP said Amazon should be ‘shouldering more of the burden’ after benefiting from the pandemic.

The retailer, which last week announced plans to hire 10,000 staff in the UK this year to cope with soaring demand, said sales jumped by more than a quarter to £13.73billion last year – up from £10.89billion in 2018.

Direct taxes include corporation tax, business rates, and other levies including stamp duty land tax.

Amazon – which employed more than 30,000 people in the UK last year but is set to employ more than 40,000 by the end of 2020 – said the biggest direct tax bill incurred was employer’s national insurance.

In total, these direct taxes accounted for just over 2 per cent of its sales.

The firm stressed that its total tax contribution to the UK, including indirect taxes such as VAT on sales, surged to £1.15billion last year, up from £793million the year before.

But it refused to disclose how much profit it made in the UK, and how much corporation tax

‘They benefited from pandemic’

it paid. The firm, which channels sales through its European arm in in Luxembourg, has been accused of under-paying corporation tax in the UK for years.

Its complex structure has made it impossible to prove this, with the Luxembourgbased company Amazon EU only reporting EU-wide figures.

Yesterday, Amazon did reveal what the corporation tax bill was for its warehouse and logistics division.

Amazon UK Services made a profit of £101.94million last year on sales of £2.96billion.

But it paid just under £14.5million in tax – an effective tax rate of just 14.2 per cent.

Corporation tax is levied at 19 per cent in the UK.

Amazon said it paid a smaller proportion of its profits as tax last year because its investment of more than £690million on new warehouses and a new office in manchester meant it qualified for tax breaks.

But Dame margaret Hodge,

Labour mP and anti-tax avoidance campaigner, said: ‘I’m fed up of highly profitable companies like Amazon implying that because they pay business rates and employers’ national insurance contributions they should not pay their fair share of corporation tax on profits they make from UK citizens.

‘If they’re paying the right amount of corporation tax, then show us the numbers. Amazon has benefited fantastically from the pandemic, they should be helping to shoulder more of the burden.’

Richard murphy, professor of accounting at Sheffield University, said: ‘This is just the usual waffle and a million miles away from true tax transparency.’