09/09/20

UK: Amazon pays only £293m in tax despite racking up sales of £14bn.

As published on inews.co.uk, Tuesday 8 September, 2020.

Amazon paid just £293m in UK tax last year despite racking up sales of almost £14bn, a move certain to reignite resentment of the US tech giant from across the political spectrum.

While the tax payment was a 33.2 per cent increase on Amazon’s £220m payment into Treasury coffers in 2018, the group, which has its European base in the tax haven of Luxembourg, will once again face accusations of not paying its fair share.

The company said its corporation tax payment was reduced as a result of increased capital spending, as well as research and development expenditure.

The online retail giant defended its tax payment, claiming it contributed £1.147bn in “total tax” from its UK operations last year, although the majority of this was from indirect taxes such as national insurance contributions, business rates and stamp duty – bills every company in the UK has to pay on top of the standard 19 per cent corporation tax on profit.

Amazon, which is valued at around £1.24 trillion, is also set to avoid a new tax imposed on US tech giants operating in the UK earlier this year.

Last month it revealed it will pass the cost of the Treasury’s digital services tax onto its UK sellers via additional fees for placing their products on its online store.

Amazon added it has now directly invested more than £23bn into its UK operations since 2010.

The company has accelerated its expansion efforts in the UK this year after the coronavirus pandemic stoked demand. Last week, it announced plans to hire another 7,000 staff this year to aid its growth strategy and is set to launch robot deliveries to customers front doors.

On Monday, the firm also announced John Boumphrey as the new boss of its UK operations, taking over from current country manager Doug Gurr in November.

Amazon’s founder Jeff Bezos is estimated to have amassed a personal fortune of almost £150bn.