In 2017, Amazon’s UK tax bill fell to just £4.6 million, despite pre-tax profits in the country almost tripling to £72.3 million.
This is despite the fact that in May 2015, Amazon announced that they would begin to pay a fairer rate of tax.
In a statement from the company dated May 2015 it said they would start to book retail sales through its UK branch from May 1st 2015, ending the practice which saw them route sales directly through a Luxembourg subsidiary.
So, has Amazon transferred profits to local branches?
In short, Amazon still, as yet, isn't paying much tax in the UK as well as a number of other countries. It has been suggested that this is because Amazon might be shifting around its profits to hide them.
In 2017, almost 75% of Amazon’s UK revenue for the year was registered through the company’s Luxembourg subsidiary Amazon EU Sarl. That’s £6.88bn of UK sales.
This figure implies that Amazon’s UK tax-rate in fact stands at just 0.5%.
As tax expert and campaigner Richard Murphy points out:
“Amazon’s tax looks low because we can only confirm payment of tax of £4.7m, which is paid at one third of the expected rate on about one quarter of its UK activity. That could imply more than £50m of tax needs to be accounted for.”
Amazon paid just €16.5m (£15m) in tax on European revenues of €21.6bn (£19.5bn) reported through Luxembourg in 2016.
If Amazon wants to persuade people that it is not doing anything dodgy, there is a solution, which is to institute proper country-by-country reporting, as advocated by the Fair Tax Mark, the OECD and others. Then we will all be able to get a clear picture on the state of their tax affairs.
In the meantime, we have to assume that Amazon is still shirking its tax responsibilities and therefore, our boycott against them continues.
Read our feature on 'Amazon and Tax' for more information.
What can consumers do?
Organisations campaigning for change rightly point to better regulation – such as a requirement for companies to publish ‘country by country’ tax reporting and selective public sector procurement.
But we already know that the corporate influence of regulators, through lobbying and political funding, makes regulatory solutions problematic in practice.
You can use you're spending power to send Amazon a clear message.
- Take action now and pledge to boycott Amazon in 2018 and beyond.
- Let them know you are doing it by emailing or tweeting them on our company profile page.
Support for the Amazon Boycott
Thousands of people have joined our campaign against Amazon. We took our campaign to parliament and found an array of support from MPs passionate about tackling tax avoidance.
MPs Natascha Engel, Meg Hillier, Margaret Hodge, John McDonnell, Michael Meacher, Austin Mitchell, Grahame Morris and Dennis Skinner are all backing a boycott of Amazon this Christmas.
Mark Constantine, Lush co-founder:
“The internet is a freedom tool which we all like to use. But Amazon have diminished it through their dominance and tax avoidance. They have taken a good thing and made it ugly.”
Interview with Margaret Hodge
As chair of the House of Commons public accounts committee Margaret Hodge MP has been the star interrogator of companies that aggressively avoid paying tax.
She is one of 8 MPs who are supporting our Amazon boycott call.
In an exclusive interview with Ethical Consumer, Margaret Hodge explains why she is supporting our campaign and why the issue of tax matters so much to her.