Amazon UK pays just £10m tax on sales of £4.3bn
The UK arm of internet shopping giant Amazon paid corporation tax of less than £10m last year despite generating sales of £4.3 billion.
Details of the American firm’s tax contribution, which were revealed in filings at Companies House, sparked fresh controversy over its arrangements.
Consumers buy from the company’s UK website and the items are delivered from British warehouses but these transactions are mostly with a company called Amazon EU Sarl in Luxembourg.
This allows the company to legitimately lower its tax bill. It is taxed at the lower rate in Luxembourg and then pays less corporation tax where the rate is higher in the UK.
Amazon says it follows the tax rules in all countries where it operates but Margaret Hodge, who chairs the Commons Public Accounts Committee, renewed her attack on the company, saying it should pay its fair share of tax.
Ms Hodge said consumers should follow the case of Starbucks last year, when direct action persuaded the coffee chain to resume UK tax payments last year.
The results filing for Amazon.co.uk shows that its corporation tax bill almost doubled to £9.7 million from £5.1 million a year earlier.
This reflected a sharp rise in pre-tax profits to £17.1 million as the UK business generated more money from the provision of fulfilment and corporate support services to other Amazon group undertakings.
Revenues were 40% higher at £449 million. Results from the US company at the end of January showed Amazon generated revenues from UK trading of 7.3 billion US dollars (£4.3 billion) last year.
