Why is Amazon being given £1m by the taxman?
It notched up £7billion worth of sales last year, so...
AMAZON has received £1.3million back from the taxman – despite annual sales in the UK soaring past £7.3billion.
The internet giant has recently joined an elite group of companies worth more than $500billion (£385billion) but its tax bill in the UK has fallen despite vast growth.
Amazon has embarked on a huge expansion spree, promising to recruit thousands more staff and develop vast new warehouses in the country.
But accounts just filed with Companies House show that its UK Services arm, which used to be known as Amazon.co.uk, received a £1.3million tax credit for 2016.
The sum is not given to the firm as a payment from the Treasury but knocked off future tax bills. The news has enraged MPs and business owners, who are calling on the Government to rethink the way it taxes foreign technology firms.
Small businesses also complain that Amazon is able to avoid crippling business rates as it does not have a high street presence and its warehouses are low-value properties that get a lower bill.
Liberal Democrat leader Vince Cable accused the firm of ‘manipulating’ the system to avoid paying the true extent of its tax. He said: ‘This is yet another example of how companies are taking the Government for a ride and we’re going to have to look at the way we
‘Taken for a ride’
charge these companies tax. We need to shift the system so that we tax real activity and the business they do here.’
Revenues from sales made by Amazon in the UK are listed in a separate company that has not filed accounts yet, but the most recent figures for last year for its main US holding company show revenues in Britain soared above £7.3billion.
Accounts filed for Amazon show its official UK services division declared a turnover of £1.4billion, but other British sales go through other parts of its European operation.
It managed to write most of this off as administrative expenses to leave the business with a profit of £25.6million. This was down from the previous year’s £38.7million.
Amazon’s recorded corporation tax bill for last year was £7.4million. However, a complicated series of deductions including £35million of share awards to managers and bosses knocked this down so that its total tax on profits was a credit of £1.3million. Overall, Amazon’s total tax bill for the year fell from £9.79million in 2015.
Amazon’s main European holding company is in Luxembourg but it reports results for its warehouses, deliveries and lorries arm in the UK.
Amazon said: ‘We pay all taxes required in the UK and every country where we operate. Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, lowmargin business and our continued heavy investment.
‘We’ve invested over £6.4billion in the UK since 2010.’