Amazon UK tax payment falls to £1.7m

Online retail giant Amazon paid far less tax in the UK last year, despite seeing a jump in profits.
Amazon Services UK paid tax of £1.7m, down from £7.4m in 2016, but operating profits rose to £80m from £48m.
One reason for the lower tax bill was a rise in share-based payments for staff. Its full tax bill was £4.6m, but it has deferred paying the remaining £2.9m.
An Amazon UK spokesman said it paid all the tax it was required to “in the UK and every country where we operate”.
“Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment.”
Over the past five years, full-time staff in the fulfilment centres have received, on average, shares worth more than £1,000 a year, the spokesman said.
As Amazon’s share price has risen so sharply, these are often worth more when they are sold to the open stock market. That sale price is the one on which the tax bill, for both the company and the individual, is based.
Amazon Services UK is the division that runs the fulfilment centres which process, package and post deliveries to UK customers.
It employs more than two-thirds of the 27,000-strong UK workforce. It does not include Amazon businesses engaged in cloud computing services, which provide remote data storage, and Amazon Marketplace.
Turnover for Amazon UK Services jumped from £1.43bn to nearly £1.98bn.
Dominic O’Connell, Today business presenter
While the numbers are big, this set of accounts gives only a glimpse of the true state of Amazon’s tax affairs. Amazon Services UK runs customer service and warehouses in the UK – actual retail sales are routed through a different company.
Turnover was just under £2bn, operating profits nearly tripled to just under £80m, but the company was able to reduce its tax liability by deducting part of the payments it makes to staff in the form of company shares. Any company can do this – it is not an Amazon-specific tactic. It then deferred some of the tax, and ended up paying just £1.7m.

Source: BBC

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