The Booksellers Association has expressed "dismay" at the suggestion HMRC was told to "go easy" on Amazon by ministers reluctant to bring the retail giant to task over the amount of tax it pays.
The comments follow the publication of a covert recording in which HMRC's then-deputy director, Guy Westhead, is heard telling VAT tax campaigner Richard Allen at the end of 2015 that the Treasury didn't want to "annoy" the e-commerce giant.
The recording was published on the website of Jolyon Maugham QC, barrister at Devereux Chambers. Responding to Allen's suspicions "ministers have some kind of agenda to basically not annoy Amazon", Westland is heard confirming: "I’ve heard of that. I’ve heard from the Treasury; the Treasury didn’t want us to be too hard on Amazon. But I think that was a brackets ‘yet’ close brackets."
According to the Times, the Treasury is now under scrutiny for allegedly trying to influence HMRC's treatment of Amazon, while HMRC stands accused of allowing Chinese companies selling through Amazon to flout VAT rules, believed to have cost the exchequer £1.5 billion a year.
In his post accompanying the recording, Maugham writes: "The issue is that the powerful and highly politicised Treasury thought it appropriate to seek to influence how HMRC exercised its statutory functions to cause it to go easy on one large and powerful US tech company (here, one accused of facilitating tax evasion)."
A government spokesman has said it "would never give a company or individual preferential treatment". But the recording, made in December 2015, suggested to Meg Hillier, chairwoman of the Commons public accounts committee, that the government had "a lack of urgency to tackle the big platforms".
In an open letter to Chancellor Philip Hammond, Tim Godfray, chief executive at the BA, called for "an accurate and authoritative account" of the matter, saying if HMRC was told to go easy on Amazon it would be both "deplorable" and "grossly unfair".
Godfray said further that he would encourage greater transparency in the system - including "public disclosure as to how these sums are reached" for the largest of companies - and for parliament to improve its scrutiny of HMRC.
"We were dismayed to read the article in the The Times yesterday ... suggesting, as it does, that HMRC have been deliberately 'going easy' on Amazon," the letter read. "We feel, if true, this is grossly unfair and undermines the Civil Service’s Code of Impartiality.
"Whilst we do not in any way condone the methods reported as being used to obtain this story – indeed, privately I consider them to be pretty shabby - I feel it would be remiss were I not to write and ask in the frankest terms possible for the truth in this matter."
As background, Godfray said the BA already viewed the advantages Amazon enjoys as "both unfair and immoral":
"Unfair because it means our members are competing on an uneven playing-field with the commercial advantage tilted heavily in favour of Amazon, and immoral because our members are paying an awful lot more in tax as a % of turnover than Amazon is, and Amazon is benefiting from the largesse of the state in all its many forms – roads, rail, you name it, without contributing in the same way as our members," he wrote.
The development comes after booksellers demanded a tax law change in response to Amazon's filings last August. The BA said then that the UK’s current taxation system was “out of date” and “discredited”.
Godfray went on to pay tribute to UK booksellers, saying he was "proud" of the way they have "risen to the many challenges of the 21st Century – not the least of which has been Amazon".
He added: "To read of the allegation that our own government and tax authorities have, in effect, seemingly been helping to skew the playing field that little bit harder against us, would be deplorable."
Amazon declined to comment.
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