Amazon UK paid £3m tax on £4bn sales last year
A Guardian investigation has revealed that Amazon's UK subsidiary paid £3.2m in corporate taxes last year on sales of £4.3bn - a rate of less than 0.1%.
Margaret Hodge, chair of the Public Accounts Committee, said the tax payment was “just a joke”.
The tax bill almost matched the £2.5m in government grants Amazon received over the same period, according to the annual accounts published at Companies House.
But Amazon has always insisted that it pays all required taxes in every jurisdiction that it operates in. Companies only have to pay tax on any profits they make rather than the value of their sales.
The taxes are relatively low compared to sales because the company earns its profits in Luxembourg. Amazon.co.uk is thought to have classified itself as a service provider to its Luxembourg business, Amazon EU Sarl, in order to reduce its tax bill. Its UK business employed 4,200 people at the end of 2012, compared with 380 in Luxembourg.
The £3.2m tax bill was just over the £2.5m aid it received from the Scottish government last year to expand its warehouse operations in Dunfermline and Gourock.
Some business commentators say that Amazon have operated within the laws and rules and regulations and so the onus is on the authorities to change the rules, rather than on Amazon to pay more tax.
But we disagree. We think that the onus is on Amazon to pay a fair share of its profits in tax. It is their responsibility which is why we are running a boycott of Amazon until they pay their fair share.
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