Amazon pays a pittance on £4bn sales

The e-tail giant's UK division paid just £2.4m in corporation tax on sales of £4.3bn last year - a rate of less than 0.1%. And that's despite Amazon receiving £2.5m in government grants...

by Rebecca Burn-Callander
Last Updated: 30 Aug 2013
Jeff Bezos could succeed Bob Diamond as Britain's public enemy number one after it was revealed that Amazon has paid a miserly amount of tax in the UK, despite raking in billions in revenue.

According to Amazon's latest filing with Companies House, its UK division, which is classified as a 'service business', funneled its 2012 sales through to Amazon EU Sarl in Luxembourg, where corporation tax rates are among the lowest in the world.

This means that Amazon UK, which employs 4,200 people, paid just £2.4m in corporation tax. When MT called the Amazon press office to find out how much tax was paid in Luxembourg, where the firm employs just 380 staff, the team hung up the phone. Twice.

In addition, that £2.4m tax bill is £100,000 less than the £2.5m in Scottish government aid it received to expand its warehouse operations in Dunfermline and Gourock.

Labour MP Nick Smith has branded the tax payment as 'pathetic', adding, 'HMRC should be going through this company's tax arrangements with a fine-tooth comb.'

Amazon, alongside Apple, Starbucks, Google and Microsoft have all come under fire for their tax arrangements in recent months (check out MT’s handy inforgraphic). However, founder Jeff Bezos has always insisted that his firm plays within the rules.

HMRC has yet to make any significant progress in tying up the these gaping loopholes. And while it’s clear that consumers are unhappy about the tax avoidance, what's much less clear is whether they care sufficiently to vote with their wallets and shop elsewhere. So far, that seems unlikely...

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