Turnover at Amazon's UK Services arm soared again in 2017, rising nearly 36% to £1.98bn (from £1.46bn the previous year), accounts filed at Companies House have revealed. However the warehouse and logistics arm halved the amount it paid in UK corporation tax last year, down to £4.6m (from £7.4m in 2016).
The services company - which employs more than two-thirds of Amazon's 27,000-strong UK workforce - reported profits before tax of £72.4m, up from £24.3m in 2016, and paid tax on those profits of £1.7m.
lt is 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 Booksellers Association m.d. Meryl Halls called the current tax system "out of date and no longer fit for purpose."
Meanwhile US filings show that Amazon's total UK revenues hit $11.4bn (£8.8bn) last year, up from $9.5bn (£7.3bn) in 2016. The UK is Amazon’s fourth biggest market after the US, Germany and Japan. Sales in Germany also surged in 2017, standing at $17bn (£13bn), up from $14.1bn (£10.8bn) a year ago. Sales in Japan grew to $11.9bn (£9.2bn) from $10.8bn (£8.3bn) a year earlier.
Last week Amazon revealed a 39% year-on-year total revenue rise for the second quarter (to 30th June 2018) of $52.9bn (£40.7bn), with operating income soaring to $3bn (£2.3bn), up from $628m (£483m) in the same period of 2017, and a record profit of $2.5bn (£1.9bn).
The BA's Halls commented: “It is extremely disappointing to note that, yet again, Amazon’s tax announcement illustrates the online multinational giant - possessed of a huge market share and all the associated commercial bargaining power that goes with it – entrenching its substantial commercial advantage over its competitors in the UK book trade, and more widely.
“According to papers lodged before a US court, Amazon, being a global company, has set up a whole network of companies, which seemingly gives it the potential – should it wish to do so – to transfer assets and make inter-company charges in order to end up with a low profit in a high tax domain.
“Is Amazon using such a facility so as to pay such a miniscule tax bill? If so, HM Treasury, OECD and our legislators should plug this unfair loophole as soon as possible."
She added: “The current system of taxation is out of date and no longer fit for purpose, heavily weighted against bricks and mortar retailers, who are being hammered by ever-increasing burdens in running their businesses. On average, high street retailers are paying £2.30 in Business Rates for every £1 paid in Corporation Tax, and we already know that the Waterstone’s on the Bedford High Street is paying significantly more in Business Rates than Amazon. This is self-evidently unfair.
“We want to see a situation where UK booksellers are no longer forced to compete with one hand tied behind their backs and that we see the establishment of a level-playing field, with the government recognising UK booksellers for the high street heroes they are, and, crucially, to bring forward the promised reform of the taxation of the digital economy so that UK booksellers are given a chance to compete.”
On the latest corporation tax disclosure, an Amazon UK spokesperson said: “We pay all taxes required in the UK and every country where we operate. Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment.”