Billions in British sales but Amazon pays £11.9m in tax

Amazon's UK business paid the amount in corporation tax last year despite taking £5.3bn in sales from British shoppers

On UK sales of £5.3bn, Amazon paid just £11.9m in corporation tax last year (Getty)

Amazon’s UK business paid just £11.9m in corporation tax last year, even though the online retail giant took £5.3bn in sales from British shoppers.

Accounts filed at Companies House this week show Amazon.co.uk made a profit of just £34.4m in the 12 months to 31 December and so paid corporation tax of £11.9m. British customers, however, account for nearly 10 per cent of the American giant’s global turnover, although until recently these sales did not go through its UK books.

Amazon announced last month that, since 1 May, it has started booking UK sales through a British subsidiary after years of funnelling its European sales through a subsidiary in Luxembourg where it enjoys low tax rates.

Its move comes as the Chancellor George Osborne pushes ahead with a “diverted-profits tax”, dubbed the “Google tax”, designed to discourage multinationals shifting profits out of the UK to cut their tax bills.

This followed rows over how much corporation tax many multinationals pay, with organisations including the OECD, G20 and European Union looking at ways of reforming the international tax system. US tech giants such as Google, Apple, Facebook and Amazon, in particular, have come under fire for the way they route profits through low-tax jurisdictions.

This is despite the companies expanding rapidly overseas. Amazon now employs more than 7,700 staff in Britain and is nearly trebling its headquarters workforce, with new offices in London.

Meanwhile Facebook, which according to its latest UK results paid annual corporation tax of just £3,169 here, is also growing in Britain. It has just signed a lease for additional office space in the capital, three months after it nearly doubled the size of its London headquarters in Euston. The company, however, has its European HQ in Ireland, where it can currently take advantage of a controversial tax loophole known as the “double Irish”. Its results showed it made a pre-tax loss of £11.6m in the UK in 2013, although revenues rose from £34.6m to £49.8m.

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “You can understand people’s anger at organisations like Amazon perceived not to be paying their fair share, but our frustration should be focused on the politicians and bureaucrats who have created our ludicrously complicated tax code.”