Amazon nearly doubled its operating profit in the UK last year, but paid less in corporation tax and received more handouts in government grants.
The e-commerce giant’s UK financial accounts for the year to 31st December 2014 have just been filed at Companies House, and show that Amazon’s UK turnover increased 51% to just under £680m, up from just under £450m the year before. At the same time, operating profit at the company rose 95% to £35.6m, up from £18.2m the year before. After tax, its profit for the financial year was £22.5m, up 73% from £12.9m in 2013.
The accounts show the retailer received £1.8m in government grants last year, often used to subsidise UK warehouses - a figure 14% higher than in 2013.
At the same time, the results show the company paid less corporation tax than the year before in the UK - just under £8m in corporation tax in 2014, down 18% from £9.7m in 2013. The government lowered corporation tax on 1st April 2014 to 21% (from 23%). It has been further reduced this year to 20%.
The accounts will not reflect the whole picture of Amazon’s UK-generated sales and profits, because sales previously booked via Luxembourg were only redirected through the UK as of last month. The move followed the introduction of the Diverted Profits Tax, commonly known as the Google tax, a new law whereby companies which shift profit outside the UK, such as Amazon, Starbucks, Apple and Google would be charged a 25% tax on UK profits from April this year.
The company has received extensive criticism for paying low corporation tax in the UK in comparison to its very high sales.
Amazon's accounts also reveal the retailer increased its average headcount by 31% in 2014, after opening a new corporate office in central London. Wages and salaries at the group also went up, from £163m to £213m. The records show that staff employed at the company has risen from 7,722 from 5,912, but this does not include thousands of staff at Amazon warehouses on temporary contracts, The Bookseller understands.
A note in the document said: “The company’s operations generated an increase in net current assets during 2014 and are expected to do so for the foreseeable future.”