A union leader yesterday accused online giant Amazon of paying a pittance in tax at a time when the government is grappling with a huge black hole in the public finances.
Amazon yesterday revealed that it generated revenues of more than £27billion from around 20 of its UK businesses last year – £856 every second. That was £3bn more than in 2022.
The figure includes everything from online shopping to Amazon Web Services, its cloud computing arm, which has a string of taxpayer-funded contracts.
But the bumper haul led to renewed allegations that Amazon is less than transparent about its tax affairs. The US firm cherry-picked details in a blog published on its website yesterday.
Amazon said it paid £932m in direct taxes, including corporation tax, business rates and employer national insurance but did not break that down any further. While the tax paid is £151m more than in 2022, it still represents just 3.45% of its UK turnover.
Andy Prendergast, the national secretary of the GMB union, said: “Amazon rakes in billions from UK customers yet pays a relative pittance back in tax thanks to financial chicanery. “It’s an affront to the British public.”
While Amazon’s coffers are bulging, Chancellor Rachel Reeves warns the government is having to make tough decisions to deal with the legacy of the previous Tory government, including a £22bn shortfall between spending commitments and revenue.
The government blames the “black hole” for its decision to means-test winter-fuel payments. And spending cuts and tax rises are expected in next month’s Budget.
Amazon, which has made founder Jeff Bezos, 60, one of the world’s richest people and has a stock market value of £1.5trillion, has long been criticised over its tax secrecy. But one business it did give details of was Amazon UK Services, which runs its vast fulfilment centres.
Accounts showed it paid just £18.7m corporation tax on its £250.7m profit, meaning the rate paid was less than a third of the standard 25%. Amazon said it was lower because of the “super deduction” perk the Tory government introduced as well as other tax breaks for investments.
Paul Monaghan, chief executive of the Fair Tax Foundation, branded the amount paid pitifully low. Amazon said it collected £3.4bn in tax for the Treasury, including VAT. But Mr Monaghan said: “The public are not interested in how much VAT Amazon has collected.
“They want to know how much corporation tax they pay in the UK, and how much profit they actually account for in the UK from the £27bn of revenue they collect here.
“One can only surmise that the lack of transparency is connected to the sizeable chunk of UK revenue that is still shunted to the historically ‘loss-making’ subsidiary in Luxembourg.”
Sales from Amazon’s shopping website and Amazon Web Services are funnelled through Luxembourg and then booked in the UK, though not made public.
Amazon said: “As we continue to invest in our UK operations and workforce, we help fund public services and vital infrastructure and create jobs.
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“Amazon ranks in the top 10 largest taxpayers in the UK for direct taxes – taxes we collect – and our overall total tax contribution, which was more than £4.3bn in 2023. We invested £12bn across the UK in 2023 alone, creating an additional £10bn benefit to UK GDP.”
