The great tax charade: Amazon plays the system while businesses like ours suffer

Clearly, Amazon do their business here. So they should pay tax here too

Frances,Keith Smith
Friday 17 May 2013 12:03
Third-party traders on Amazon are not happy at the new seller fees
Third-party traders on Amazon are not happy at the new seller fees

Tax is in the news again. Reports this week have revealed that Amazon has paid only £3m on £4bn sales, while Google executives were hauled up in front of the Public Accounts Committee to explain how they manage their tax affairs. It seems that tax has become the issue of the day - and quite right too because, far away from the corridors of power and the gleaming HQs of Amazon and Google, it's people like us who are feeling the pressure caused by tax avoiders - but it's also people like us who are fighting back against them.

Last December we started a petition on calling on Amazon to pay a proper rate of corporation tax. We own a pair of independent book shops in Warwickshire. All around us the high street is, essentially, collapsing. It’s too simplistic to say that this is just because of online retail - online is a reality and we compete as best we can. It’s simply not fair that Amazon starts at a an advantage on every sale because it’s not paying its fair share of tax. We love competition, we love making our shops inviting for customers. We are not happy to sit by and watch our high streets fall to pieces because of the sharp practice of a few companies and the inaction of our government.

Our petition, quite unexpectedly, took off. Celebrities including Charlie Higson and Stephen Fry got behind us; we had other book retailers get in touch as well as the Booksellers Association and many, many others. Margaret Hodge MP, Chair of the Public Accounts Committee who gave Google, Amazon and Starbucks their infamous grilling last Autumn, also got in touch. We took our petition to Downing Street with 150k signatures. Now we have nearly 170,000 in a huge outpouring of support from across the country.

Governments all over Europe are concerned about the levels of corporation tax they've been receiving. More and more huge corporations have found ways by clever accounting to reduce their tax liabilities and vast amounts of cash are accumulating in the Cayman Islands and other tax havens - some under the jurisdiction of the British government. Billions and billions of dollars, pounds and euros are being taken out of our economies and we are all feeling the results.

David Cameron intends to discuss the issue at the G8 conference, but will any real action be taken?

The UK government is very concerned that we should encourage big business to come the UK, which is all well and good if appropriate taxes are paid here. We need to investigate carefully if such businesses are really adding to UK wealth or merely using our good name, secure employment laws, banking system etc and then leeching money from our financial base. The bare facts are these: When you buy a book from Amazon on the Amazon UK site and pay for it, the book is dispatched from a warehouse in the UK, delivered to you using either Royal Mail or a UK distributor, but your purchase is not registered in the UK so no corporation tax is due to the HMRC. On the other hand when Warwick Books and Kenilworth Books sell a book, we pay corporation tax on our profits and add a few thousand pounds per year to Government coffers as a result - thus paying our bit towards the infrastructure we all enjoy in a civilised society.

It doesn't seem too much to expect from our leaders that they stand up equally for small retailers like us as they seem to do for bigger companies. It seems perfectly clear to us that Amazon do their business here and they should pay tax here like we do. It’s also absolutely clear that there are lots and lots of voters out there who agree with us.

We don’t know whether, ultimately, our campaign will have an impact. We are just two people who were fed up with seeing our local high streets ruined by the Amazon behemoth. But there does seem to be a growing feeling that, while these companies are welcome to trade here, it’s high time they started putting their hands in their pockets, the way we have to. A strong society relies on a fair tax system.

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