Amazon records UK sales of £5.3bn for 2014

Amazon records UK sales of £5.3bn for 2014

Amazon's UK website sales rose by 14% to £5.3bn last year, but the company only booked £680m of revenue through its UK accounts.

At the same time, Amazon paid just £11.9m in tax to UK authorities, while recieving more handouts in governments grants - totalling £1.8m last year.

According to accounts filed in the US, net sales for the UK website were £5.3bn ($8.3bn) to the year ending December 2014, up from £4.49bn ($7.3bn) the year before.

However, the e-commerce giant’s UK financial accounts which have just been filed at Companies House, show that Amazon’s UK turnover was just under £680m in the year to 31st December 2014, up from just under £450m the year before.

The reason for the difference is because Amazon claims its Luxembourg European headquarters sells products to British customers through the limited company and the UK figures instead refer to payments for its warehousing, distribution and administrative work, such as negotiating purchasing deals with book publishers, but not sales.

The UK accounts show operating profit at the company rose 95% to £35.6m in 2014, up from £18.2m the year before. At the same time, the retailer received £1.8m in government grants last year, according to the document, often used to subsidise UK warehouses - a figure 14% higher than in 2013.

The company also paid less corporation tax than the year before in the UK - just under £8m in 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 overall tax the UK accounts showed Amazon paid this year in the UK was £11.9m.

The company has received extensive criticism for paying low corporation tax in the UK in comparison to its very high sales over the last few years. Last month, however, Amazon began booking its UK sales through the UK, as opposed to Luxembourg. Amazon said it had been working on the move for two years, but the change also coincided with 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.

At the time, an Amazon spokesperson said: "We regularly review our business structure to ensure that we are able to best serve our customers and provide additional product and services. More than two years ago we began the process of establishing local country branches of Amazon EU Sarl, our primary retail operating company in Europe.  The local country branch for the UK became official on 1st May and Amazon EU Sarl is now recording retail sales made to customers in the UK through the UK branch.  Previously, these sales were recorded in Luxembourg."

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, while the records show that staff employed at the company has risen from 5,912 to 7,722.

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."