Amazon makes BEELLIONS from British customers, pays pennies in tax
Amazon paid just £1.8m in corporation tax in the UK despite racking up a pre-tax profit of £74m on £3.35bn sales in 2011, according to figures the web giant wanted to keep secret. MPs probing the company's minuscule corporation tax bill demanded to see Amazon's profit numbers as well as its sales performance, and published the …
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And these are the same companies that want you to spend more money to end the 'recession' that apparently is being created by these companies? They are as bad as the banks, if not worse.
I am remembering the names of all the companies who are exposed as tax dodgers and will stop shopping with them immediately until they change their ways. Unfortunate that it is now Amazon, I used to buy plenty from them.
But, the government / law are as much to blame, if they are the ones who set the rules then they cant exactly stand up and shout 'it's not fair' if all they have to do is change the rules?
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fuck changing their ways.
I'm gone and i aint coming back.
at least when they pay fuck all tax again next year it will be because their business colapsed this year.
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Anyone know if Amazon warehouse workers are paid more than the upper limit for working tax credits from the government?
If Amazon workers are getting top-ups from the government then the taxpayer is helping subsidise the company's profits.
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£6.19 an hour, if you google for amazon warehouse jobs and follow the links through to the agencies recruiting for additional Christmas staff;
http://www.mysouthyorkshirejobs.co.uk/Jobsite/Jobs/2331451/warehouse-staff
Re: Title here
£6.19 an hour, of course, being minimum wage for over 21 year olds.
Re: Title here
Yep.
£6.19.
And over 60 hours a week, maximum of 12 weeks, provide your own protective gear and boots (illegal), NO on-site parking (told to take a bus or train....)
But that £6.19 is what is paid to the worker, the agency gets paid rather more..and don't forget the 12 weeks.
Most agency workers register with several agencies to get continuity of work....but at 12 weeks there would be little holiday pay.
hmmm
started doing xmas shopping and trying not to use amazon. fuck 'em. i will give my money to companies that pay tax now.
Re: hmmm
Even if it means you paying more as a result - doubt it - easily said but the proof of the pudding and all that...
Re: hmmm
oooh, ive got a bronze badge!!! woop woop....
Re: hmmm
i actually saved some cash on latest purchases :)
it took a lot of shopping around though. so many websites just link to amazon these days.
if i have to pay a lot more then i will use amazon. im not rich enough to have high morals ;)
Re: hmmm
Good Luck with that.... I now never buy from Amazon, or Play.com since being gobbled up by another conglom, good old Ebuyer does me for most stuff, and its local to me so supporting good old East Yorkshire to boot.
Failing that I'l, get off my arse and nip down to an indie store if I can and give my money to the local economy instead of tax dodgers from the old colonies.
I also avoid any TV featuring Jimmy Carr and change stations when a Gary Barlow song comes on.
Re: hmmm
Costa doesn't charge any more than Starbucks, but they are paying their taxes. So I choose Costa over the other dodgers now.
A bit more tricky with Amazon though, especially now so many high street shops have gone to the wall :(
Re: hmmm
imagine that you were getting fucked over by amazon!
who'd have thought it :-)
Re: hmmm
I might order from Ebuyer a good deal more often if they didn't charge me a truly ridiculous tax for not living in one of the major cities of the UK, every time I want something delivered.
At least Amazon have that right - I live on the Mainland of the UK, no courier will have to pay parking fines to stop at my door, or congestion charges... if you're going to offer free delivery to mainland UK, PROVIDE IT or charge everyone the same rip-off rate and see how your business fares.
Re: hmmm
>Costa doesn't charge any more than Starbucks, but they are paying their taxes.
Trifling detail, but Starbucks are usually run as franchises, so it is the coffee shop owner (not Starbucks) who pays tax on a particular shop's profits.
Got to feel kind of sorry for the poor sods who put up a few hundred K of their cash to open one, only to find they are now being boycotted by people who don't understand the business model.
Re: hmmm
never used ebuyer. im based in lincolnshire so its relatively local to me too. cheers for that!
Re: hmmm
@Random Handle, it is pretty easily verifiable that Starbucks stores are virtually never run as franchises anywhere in the world...
Re: hmmm
>@Random Handle, it is pretty easily verifiable that Starbucks stores are virtually never run as franchises anywhere in the world...
Really? I thought a third of UK Starbucks outlets were now run by Euro Garages? ...also know that Magic Johnson owned over a hundred Starbucks franchises at one point.....and my local Starbucks is owned by a guy called Phil, who thinks he's going to go bust.
Yet another Register Headline mismatch: "AMAZON MAKES BEELLIONS" = "racking up a pre-tax profit of £74m"
Even if you consider that pre-tax figure a wee bit of a fudge, I seriously doubt that sales of £3.35bn would equate to them making more than a single BEELLION.
Well you could argue the sales figure was valid - i.e. they did make £3.35 beellion in sales - although I appreciate you effectively pay corporation tax on your profits which are much less.
The problem with Amazon is their low prices mean low profits - good for the consumer in one way but those profits head back to Amazon HQ via goodness knows where and for every job they create I suspect one or more is lost from their UK competitors.
oh fuck off
how can you seriously post on El Reg and not get its humour?!
" i.e. they did make £3.35 beellion in sales"
No, they TOOK £3.35bn in sales, they MADE £74m profit. In normal English usage, sales are takings, but you MAKE profit. (Although modern dumbed down society doesn't seem to have a clue about the difference between the two if you go by all the recent articles on this stuff.)
can anyone explain what difference it actually makes?
surely I am worse off if they transfer the cost of 26% into the cost of the goods and then I pay more VAT because the price is higher and therefore I have less money to spend elsewhere.
Is it not better for me to spread it around a bit?
beer because it is time for one.
One of the differences it makes is to other companies which are too small/honest/stupid (delete as per your opinion) to be able to wrangle out of paying as much tax as the spirit of the law requires. If Amazon payed full rate, yes their prices may go up, but that would bring them in to line with other companies who pay their tax, which makes the market more competitive, and in theory (ho ho ho) brings prices back down.
I'm thinking of beer, at least...
If they inflate their prices to cover the cost of their tax then you shop elsewhere.
The way it is now, their prices are not 24% lower than everywhere else so only amazon are winning and only the country as a whole is losing.
all depends mate
does your dear old mum need a new hip?
that'll be the sound of a penny dropping then
Still seems shifty
Unless I can't count, for a business to only make 2.2 pence on every pound of turnover is pretty rubbish, right?
Re: Still seems shifty
If you were only turning over small amounts of goods than a 2.2p off sales of £1m then it would be pretty rubbish (£22,000 per year). When you're turning over billions though them 2.2p's rack up and you end up with millions in profit.
Re: Still seems shifty
A company with outgoings in the billions that only makes double digit million profits is a company perilously close to going out of business, if the wind changes. Oddly, Amazon don't look like they're perilously close to going out of business....
hmmm.....
Re: Still seems shifty
Yes, that's because their reported profits are a function of the tax they wish to pay on any given year. The rest of their financial statement is a wonderful concoction of make-believe used in modern accounting to shift money to the lowest possible tax while gaining the maximum in government(s) assistance.
It's expensive to do but once a company is a certain size and distributed in enough countries the framework for doing this is available of the shelf.
It's amoral and completely unethical but once it's in place shareholders and senior management whose bonuses depend on it will fight to the death to keep it in place. And the only way to dismantle it would be international re-alignment of tax laws to abolish these practices.
Which is happening precisely never.
aaaand...
the MPs have room to talk when it comes to information disclosure how?
What I object to is when a US company comes over here - no problem but when a UK company (for example Tesco) wants to open up in the US they encounter a lot more resistance. Would also be interesting to see if Tesco can siphon off US profits (not that they make any) without paying tax in the US?
Tesco does the same thing in the UK - it's owned by "Cheshunt Overseas", a limited liability partnership head quartered in some mail box in the Carribean.
Tesco would first need to make some profits in the US.
At the moment, they're still making losses there.
Good..
As much as i support competition, i am SICK to the back teeth with fucking Tesco.
Its all we have here, tesco tesco and tesco..
No asda for 15 miles, no Morrisons for 8 miles, a paltry fuel less Sainsburys but 3 tescos within 1 square mile....
Oi, Tesco, NO!!!!!
No, no it isn't
Tesco is owned by Tesco PLC, listed on the stock exchange.
A joint venture between Tesco and certain pension funds which owns some of the stores is registered offshore. Tesco pays the rent which goes to Cheshunt. Then the profits come back to the pension funds which, erm, don't pay tax anyway.
Transfer Pricing...
Almost any International co with multiple sales-generating geographies will be thinking about doing something similar because their Big4 accountants tell them its a good idea (part of the value-add service you see).
Then the accountants hand the work to organise the necessary compliance documentation to make it fly to their in house Tax Team & generate a fee. Easy Peasy. Pretty creative to get it down so low from such large revenues in this case...
Ref @Jediben you're right, doesn't pass the smell test does it...
What we need is a bunch of people we can vote for, these people then represent us in some form of government. These people then can make the laws of the land which people and companies need to obey or be punished?
Nice one Guv.
I like that they chose to publish the figures as they are entitled to do. Sends a good message. Too long have government types been scared by these guys. I suspect only public shame will bring their position round - all loophole legislation gets steered round if there is a will to do so. It levels the field for the other, smaller players who pay tax and don't squirrel it away into Bermuda. I don't care if amazon leave the UK market (the "deadweight" argument advanced elsewhere) - the same goods will still be sold, but with a small premium to the taxman that falls pretty fairly on those with the disposable income for these inessential items.
Re: Nice one Guv.
The problem is that the people on this site can all complain and say they'll not shop at Amazon again, but in reality Amazon are getting tons of free marketing. Notoriety is not as good as fame, but it's heaps better than obscurity - as they say.
The sad reality is that no matter how Amazon got into the news, in a couple of weeks when people are starting to think 'oh crap, I really need to get the Christmas presents in, but where can I get all this stuff and have it delivered within a day or two so I can keep going to work?', they'll be back on Amazon justifying themselves with 'well, compared to their 3+ billion I'm not really spending much of a dent am I?'. They'll end up on Amazon because the company is a name recently in their minds, and the anger over the tax loopholes will have faded away.
Sales Tax ?
How about passing a law imposing a sales tax of say 20% on all UK sales for companies that sell direct to the public in the UK and are not registered for tax in the UK. That way they'd have to either register for tax promptly or lose out on all UK sales as they would instantly be 20% less competitive. With the added benefit of shoring up the high street.
Re: Sales Tax ?
That was so well written I stared at the comment and still even now wonder if you were being sarcastic or serious.
I think that people tend to forget that UK.gov still gets the VAT on sales. Corporation tax may not have taken vast amounts from them, but the government isn't going to raise too much of an outcry because such big business and numbers of sales means that they're already pocketing a lot.
Unless, and I freely admit it's very likely, my knowledge is severely lacking in this area. In which case I'll be pleased to hear non-condescending corrections.
@Atonnis
Unless, and I freely admit it's very likely, my knowledge is severely lacking in this area. In which case I'll be pleased to hear non-condescending corrections.
I believe books are currently zero rated - i.e. they don't attract VAT.
But, as noted above, Amazon have attempted 'end runs' round VAT, too.
Re: Sales Tax ?
> UK.gov still gets the VAT on sales
Not necessarily, as the location of the goods at the time of supply plays a factor in determining the VAT rate and to whom the VAT is paid. Also VAT liabilities are different if the supply is between two VAT registered businesses rather than to a consumer.
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/vat_on_services/index_en.htm
Re: @Atonnis
True, but Amazon's sales aren't down to just books, otherwise they'd be nowhere as big as they are now.
I'm sure that every company tries to find the best workarounds they can (ahah! see what I did there - once a 'loophole' is referred to as a 'workaround' it suddenly seems so much more acceptable...well, to an IT guy anyway). To me it's always been about the big question.
The question goes - have I got enough money coming in to be able to pay for the best and most clever accountants and solicitors who can get me around enough paying taxes that the rewards both pay for them AND earn me an extra-large padded envelope later on this year?
Once a company does have enough, then they seem to hit the sweet spot and take off. Just in my small, narrow view of the world.
Duty Free at the airport anyone?
All the hypocrites who decry legal tax avoidance [not criminal tax evasion] while doing it themselves feel free to downvote me.
Re: Duty Free at the airport anyone?
God I hated that "sitcom".
Re: Duty Free at the airport anyone?
duty free at the exit from the country point is exporting the product, and may be taxable at the point of entry into another country (it certainly is when I return to Canada from the US). However, I noticed complaints about product being shipped VAT free from the Channel Islands to the UK. Why is HMC not collecting tax as these items come into the country - Revenue Canada does as product comes into Canada from outside the country - both provincial and federal sales taxes as appropriate. Probably we cannot get at the profits Amazon (or others) make when selling from outside our countries - heck, US states have that problem, but definatly Gov't Revenuers should be able to get hold of some of it.
Re: Duty Free at the airport anyone?
Sit as in sitdown and "Com" as in commit suicide...Yes, it was a dreary dreary program...
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