Amazon UK outfit pays less than £4m more corporation tax despite £1.9bn sales rise

Amazon’s UK outfit paid less than GBP4m more corporation tax last year compared to 2019, despite a GBP1.9bn increase in overall sales in 2020. According to recently filed accounts at Companies House[1], corporation tax contributions of Amazon[2] UK Services – the online giant’s warehouse, delivery and logistics operation, believed to employ the majority of the firm’s UK workforce – increased by 26 per cent, to GBP18.3m in the year to December 2020, from GBP14.5m the year before. Over the same period, sales increased by 64 per cent, to GBP4.85bn with profits rising by a quarter to GBP128m.

These increases helped boost Amazon’s total revenues in the UK from retail, logistics and IT services to GBP20.63bn in 2020, a rise from GBP13.73bn a year before. The online retail giant has consistently been marred in controversy around its UK tax bill, as the group officially reports its British retail sales through Luxembourg, with Amazon UK services representing only a small proportion of its wider UK operation. Nonetheless the company insists its UK retail sales, related expenses, profits and taxes are recorded in the UK and therefore reported and paid directly to HM Revenue and Customs[3].

The online retail giant has tried to avoid criticism related to tax avoidance by issuing a statement that said its UK business paid GBP492m in “direct taxes” in 2020, up from GBP293m in 2019. However, this figure includes Amazon’s national insurance contributions – which rose dramatically in 2020 due to increased employment – as well as business rates, stamp duty, and corporation tax.

The firm also said that it paid GBP1.06bn in indirect taxes in 2020, driven by VAT on increased sales and higher employee taxes as staff levels rose. When combined with direct taxes, Amazon’s UK outfit has argued that that its total tax bill came to more than GBP1.55bn, more than doubling the GBP690m spent in 2019.

Amazon currently employs more than 55,000 people across the UK, including 10,000 who were hired this year to meet skyrocketing demand. Last week the firm announced it would be adding another 2,000 UK-based jobs as part of a big expansion. The new positions will mainly be among offices in London and Manchester[4], as well as “tech hubs” in Cambridge and Edinburgh.

The online retail giant is also looking to hire more staff for its UK fulfilment centres and is offering new warehouse recruits a GBP1,000 signing bonus in an effort to attract new staff amid a mounting recruitment crisis in the UK. Since 2010, the company has said that it has invested more than GBP32bn in its UK warehouses, delivery stations and workforce. In a statement, the company said: “We are proud of the significant economic contribution we are making to the UK economy.

“Looking ahead, we know that the UK remains full of opportunity, and we continue to be excited by the potential to continue to invest, create jobs, develop talent and have a positive impact in communities across the country.

References

  1. ^ Companies House (www.independent.co.uk)
  2. ^ Amazon (www.independent.co.uk)
  3. ^ HM Revenue and Customs (www.independent.co.uk)
  4. ^ Manchester (www.independent.co.uk)