Amazon's UK logistics and warehouse arm tripled its corporation tax payment to £14m for 2018, the company has revealed.
An internal audit showed Amazon UK Services Ltd, its logistics and warehouse arm that employs more than two-thirds of its workforce, paid £14m in corporation tax in the year to December 2018 on pre-tax profits of £75.4m, up from £72.4m in 2017, and a £2.3bn turnover. In 2017, the division paid £4.7m in corporation tax.
Despite the increased corporation tax payment, the figure is still lower than the £15.8m it paid in 2015, after which Amazon halved the amount it paid in two successive years.
Because Amazon does not disclose profits for its retail business as well, critics have called for it to disclose more information.
Richard Murphy, professor of practice in international political economy at City, University of London, told the Guardian he would expect Amazon to pay far more in corporation tax—as much as £100m—branding the £14m figure "the square root of diddly squat".
The company also revealed it paid £220m in UK tax for 2018, after £10.89bn in revenues. According to the firm, employer taxes made up the largest proportion of its payments, followed by business rates, corporation tax, then other taxes such as stamp duty land tax. It also collected £573m in indirect taxes such as VAT from customers, employees and third parties. The company claimed this led to a total tax contribution of £793m.
In a blog, Amazon said: “Focusing narrowly on one aspect of taxation, such as Corporation Tax – which according to the Institute of Fiscal Studies accounts for only around 6% of total taxes collected from UK businesses and individual taxpayers – doesn’t tell the whole story. This is one of the reasons why PwC produces a total tax contribution study for The 100 Group (an organisation which represents the Finance Directors of the UK’s largest companies, including many FTSE 100 firms). The study highlights that, of the receipts paid over by these companies to the UK Government, over two thirds are indirect taxes (such as payroll taxes and VAT), while around one third are directly incurred taxes.
“This is particularly relevant for growing businesses like Amazon which have a high volume of sales, but where operating profits remain relatively low due to price pressure in competitive markets, intense capital investment programmes, and increasing operating costs (including those from a growing workforce). Most governments —including the UK Government—actively encourage companies to make these investments, and they often use the taxation system to do so. Capital allowances and R&D credits are designed to stimulate the kind of investment necessary to grow the economy and create jobs. On the one hand, these reduce Corporation Tax, but this is more than made up for by the increased tax revenue or lower costs for the Government in other areas.”