Media blasts 'Scamazon' as e-retailer claimed to pay just £38m in business rates

Media blasts 'Scamazon' as e-retailer claimed to pay just £38m in business rates

Amazon pays only £38m a year in business rates in England and Wales, a Daily Mail investigation has claimed, while enjoying soaring turnover.

Since filing accounts with Companies House last week showing that turnover at its UK services arm had risen by almost 36% to £1.98bn (from £1.46bn the previous year) but it only parted with £4.6m in corporation tax, the press has condemned “Scamazon”.

Now it has been claimed the e-retailer only pays a “relatively meagre” £38m a year in business rates in England and Wales, according to a Daily Mail investigation, compared to beleaguered department store chain House of Fraser, which pays £36m a year. Amazon rakes in £9bn in sales meanwhile, 11 times the amount made by House of Fraser. Online-only retailers such as Amazon were paying market rents for their buildings while traditional retailers were forced to stump up more for their high street properties, according a spokesperson for the Altus Group which conducted the investigation.

“If left unchecked, this could lead to the extinction of the high street,”  to Robert Hayton, head of UK business rates for the property advisor, told the Daily Mail.

However, an Amazon spokesperson contested the newspaper’s figures, describing them as “misleading and inaccurate”.

"Amazon pays millions of pounds more in business rates in England and Wales than suggested by the research and our business rates bill has increased significantly in 2018," they said.

Meanwhile the Times denounced the Seattle-based giant as “Scamazon” and said it was “making a mockery of the British government, taking advantage of consumers and sucking the life out of high streets” in its leader, urging customers to shop elsewhere. Britain should follow Brussels’ proposal of taxing all tech companies on the basis of revenues rather than profits, the newspaper suggested.

“No one, not even a billionaire astride an empire of cardboard boxes, is above the law," the leader reads. "His acolytes note that they comply with the letter of the law, but its spirit is a different matter. Enraged consumers and hard-working taxpayers should take their business elsewhere.” 

Meanwhile Ruth Sutherland asked why Amazon “can’t afford some morals” in her opinion piece for the Daily Mail. She reveals that while she “adores its speed, low prices and convenience… what I don't adore are its tiny tax bills and its secrecy”.

“It's hard to be definitive about Amazon's finances here because of the complexity and lack of disclosure that surround its operations,” she writes.

Finally, political economist Richard Murphy had argued for an overhaul of the accounting system itself, in his article for the Guardian, and the company was even the subject the newspaper's cartoon illustrated by Martin Rowson.

“We might get angry with Amazon,” Murphy writes. “We may be right to do so. But frankly, we should be just as angry with our politicians. They are letting companies deliver poor quality 20th-century accounting when we need data fit for the 21st century. It’s time for a root-and-branch reform of accounting.”

The Booksellers Association's m.d. Meryl Halls told The Bookseller: “It has been deeply encouraging to see so many key figures in the retail sector and beyond calling on the government to urgently address the present disparity in the business rates system. Amazon’s business rates payments shine a light on the level of inequality that currently exists in the UK’s tax system, which is no longer fit for purpose in today’s retail environment. The current system is crippling for bookshops and other high street retailers."

She said that the Association "will continue to press the government to even the playing field, to address the unfairness of transfer pricing and to develop a new business tax framework".

The results from Companies House last week represented the second year running that Amazon UK corporation tax payment has halved, after dropping in 2016 from £15.8m in 2015.  Booksellers Association m.d. Meryl Halls called the current tax system "out of date and no longer fit for purpose."