Amazon cut corporation tax bill in half despite tripling UK profits | Amazon
Amazon has revealed that its UK corporation tax bill nearly halved to £4.5million last year, days after the US company posted a record profit of 2. $5bn (£1.9bn) in its most recent quarter.
The company, which has entered a race with Apple and Alphabet to become the world’s first trillion-dollar company, revealed that pre-tax profits from its UK business had tripled from 24 million pounds sterling in 2016 to £72 million last year.
The figures were reported by Amazon UK Services, the warehouse and logistics company which employs more than two-thirds of its more than 27,000 employees in the UK, in its annual financial report to Companies House.
The company has nearly halved its reported UK corporation tax bill from £7.4 million in 2016 to £4.5 million last year. He received a £1.3million tax credit from UK authorities in 2016 and paid £1.7million in tax on his profits last year.
“We pay all required taxes in the UK and in all countries where we operate,” an Amazon UK spokesperson said.
The tax payment cuts came despite the UK firm’s revenue, which handles parcel packing and delivery and functions such as customer service, up 35% from 1.46 billion to £1.98 billion.
“Corporate tax is based on profits, not revenues, and our profits have remained low given that retail is a highly competitive, low-margin business and we continue to invest heavily,” he said. said the spokesperson.
Amazon’s UK retail revenue is reported by a separate company in Luxembourg, but its US filings reveal that UK revenue reached $11.3 billion last year, a solid 19% year-over-year increase.
For accounting purposes, Amazon Services UK reports revenue as a charge to its parent company for the cost of delivering products, which reached £1.98 billion last year. Amazon will not reveal the total amount it paid to HMRC last year, beyond what it paid through Amazon Services UK.
Amazon UK warehouse and logistics staff and management have received a one-off $164m (£125m) payout from the company’s shareholding scheme – a boost of nearly down a third from the £95m windfall of 2016 – thanks to the company’s soaring share price.
On average, the thousands of staff processing orders received around £3,000 per person last year. Senior executives will have taken home a lot more.
Amazon’s stock price has jumped 84% in the past two years. Last year the shares were acquired at an average price of $992, in 2016 it was $704 and in 2015 it was $467.
The payouts will have reduced Amazon’s tax bill as, under UK tax law, companies are required to deduct the acquisition value of shares provided to employees.
Payroll for Amazon UK’s 19,749 warehouse and logistics workers and managers was £653 million last year, bringing the average salary per employee to £33,000.
Doug Gurr, Amazon’s UK and Ireland boss, said in June that the company would create more than 2,500 jobs in the UK this year, including 650 head office positions. A month later, he reportedly told Brexit Secretary Dominic Raab that Britain would face civil unrest in the weeks following a no-deal Brexit, adding the online retailer’s voice to a growing list of companies expressing their concerns.
“We have invested over £9.3 billion in the UK since 2010, including last year opening a new head office in London alongside development centers in Cambridge and London,” said the company spokesperson. “This year we plan to create 2,500 permanent jobs across the country in research and development, our head office, customer service and distribution centres, to bring our total UK workforce to over 27,500. .”
Amazon said in 2015 it would stop using controversial corporate structures that diverted sales and profits from the UK, following a crackdown on the practice with the introduction of corporate tax. diverted profits from George’s Osborne.
Earlier this week, Amazon took its first step into public sector procurement with a five-year, £600million deal to sell everything from office supplies to medical equipment, schools in Yorkshire, healthcare providers social, local government and emergency services in 13 local communities.
The deal drew criticism from the GMB union, which said the company could do more for public services by paying more tax.
“If they really wanted to help our public services, they would pay taxes properly and treat their workforce better,” said GMB regional secretary Neil Derrick. “They’re trying to make a few million dollars off our cash-strapped tips.”
The latest accounts from UK parent company Amazon Europe, registered in Luxembourg, show the company’s total EU-wide tax bill was €54.8m (£48.8m), up from €16.5m (£14.7m) in 2016.
Total European revenue rose 15% year-on-year, from €21.6bn (£19bn) to €24.9bn (£22bn). Amazon Europe posted an overall loss of €869m (£774m), after posting a profit of €48.5m (£43m) in 2016.