Amazon UK arm pays £3.8m more in corporation tax despite £1.9bn sales boost | Amazon

Amazon’s key UK business paid just £3.8m more last year than in 2019, even as sales rose by £1.89bn.

Accounts filed at Companies House this week show that the corporation tax contribution of Amazon UK Services – the group’s warehouse and logistics company, which is supposed to employ the majority of the group’s UK workforce – was of £18.3m in the year to December 2020, up 26% from £14.5m the previous year.

Profits in the division rose by a quarter in the same period to £128m, while sales soared 64% to £4.85bn.

The performance helped boost Amazon’s total UK revenue, from retail, logistics and IT services, to £20.63 billion in 2020, roughly double the revenue of Marks & Spencer and an increase of just over 50% on the previous year’s £13.73 billion.

The company, which made its founder and outgoing chief executive, Jeff Bezos, a fortune of more than $200 billion, tried to brush off accusations of tax underpayment by releasing a statement that its UK business as a whole paid £492m in ‘direct taxes’ last year, up from £293m the year before.

This figure includes the employer’s national insurance, professional fees, stamp duty and corporation tax. The company did not break down its total corporate tax bill, but at least half of the ‘direct tax’ figure is believed to be attributable to national insurance and company tariffs.

The group also said it had invested £1.6bn in the UK, more than double the £690m spent a year earlier, as the group expanded operations to meet high demand during the pandemic. . Investments include 11 on-site solar power projects to help run its facilities and a 350MW wind farm project off the coast of Scotland.

Amazon now employs more than 55,000 people in the UK, with 10,000 jobs created this year, and more staff are being recruited to meet growing demand. Amid a recruitment crisis across the UK, Amazon has resorted to offering new recruits to the warehouse a £1,000 sign-up bonus in a bid to attract staff.

The company said in a statement: ‘We are proud of the significant economic contribution we make to the UK economy. Looking ahead, we know the UK remains full of opportunity and we continue to be excited about the potential to continue investing, creating jobs, developing talent and positively impacting communities. Across the country.

Paul Monaghan, head of the Fair Tax Foundation’s campaign group, described the company’s figures as “more smoke and mirrors from Amazon, who still refuse to disclose exactly the total amount of profit they make to the UK, and how much tax they pay on that”.

He continued: ‘Much of their UK income continues to be diverted to Luxembourg, where there is a ‘loss-making’ subsidiary which not only pays no tax but generates huge tax breaks which can be used in the future to ensure that little or no tax continues to be paid. Amazon is increasing its market dominance across the world through largely untaxed revenue, allowing it to unfairly undermine local businesses that take a more responsible approach.

Amazon officially reports its UK retail sales through Luxembourg, with Amazon UK services representing only a small part of the wider UK operation.

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New questions have been raised about Amazon’s tax planning this spring after its latest corporate filings in Luxembourg revealed the company had collected record sales revenue of 44 billion euros (38 billion pounds). sterling) in Europe last year, but did not have to pay corporation tax in the Grand Duchy.

Accounts for Amazon EU Sarl, through which it sells products to hundreds of millions of homes in the UK and across Europe, show that despite collecting record revenues, the Luxembourg unit has recorded a loss of 1.2 billion euros and therefore paid no tax.

This story was edited September 8, 2021 to correct the Fair Tax Foundation name in the 10th paragraph

Luisa D. Fuller