back to article HMRC boss defends shift to AWS, says they got 50% knocked off

HMRC's Permanent Secretary has defended the UK tax authority's decision to ditch a British cloud slinger in favour of tax-efficient multinational Amazon, citing bumper savings. As exclusively revealed by The Reg, the taxman moved its data out of Manchester-based Datacentred six months ago. HMRC was the firm's biggest client …

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Are HMRC now going to investigate themselves for tax dodging ?

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WTF?

tax dodging

indeed.

HRMC, a tax-payer funded government department for the purposes of collecting tax, is paying a tax-dodging foreign company for their IT needs over a British one, who have been pushed into bankruptcy. Welcome to Tory Britain.

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Re: tax dodging

@Tom 64

...is paying a tax-dodging foreign company.

The following happened when Gordon Brown was Chancellor

"Inland Revenue's property sold to company in tax haven"

https://www.theguardian.com/politics/2002/sep/24/uk.economy

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Re: tax dodging

yeah, NuLabour are Tories.

Good job most of them are out of labour now.

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Anonymous Coward

"and the price reduction on this was more than 50 per cent for us."

So either cloud margin is stupendous (which seems rather unlikely bearing in mind the large amount of competition) or AWS took a large loss on this? Possibly in the hope of inertia in the even of future price rises.

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Anonymous Coward

Re: tax dodging

"Good job most of them are out of labour now."

And thank God none of them have anything to do with running the country.

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Roo
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Windows

"AWS took a large loss on this"

Apparently data is worth something, AWS getting HMRC's entire dataset would be pretty valuable as far as random datasets go. Even if Amazon don't want the data themselves, I'm sure lots of organisations of varying degree of shadyness would like to buy it. Win win for everyone but the tax payer.

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Anonymous Coward

"or AWS took a large loss on this"

Yep, you wouldn't believe the "free credit" and discount you can get from Amazon if you're serious about using their services, they'll practically give you a year's free use of their services if you're deadly serious about signing up with them. Although personally I think it's like a drug dealer, it's all rainbows and happy visions to start with but once the honeymoon period is over I can imagine the freebies are long gone and you're going to be fronting up for a lot of services you've been playing with and can't easily extract yourself from.

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"or AWS took a large loss on this"

Because the customer is HMRC, the discount will be in lieu of tax.

HMRC are happy because they are effectively getting more out of Amazon and still have an option to go back for more (tax revenues).

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Anonymous Coward

Did they get that "50% knocked off" in exchange for paying cash in hand?

(Only kidding! Amazon would never do that... they dodge paying *their* taxes in a far less plebian manner).

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Anonymous Coward

"Because the customer is HMRC, the discount will be in lieu of tax."

No it wont. It doesn't work like that.

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Anonymous Coward

"the discount will be in lieu of tax."

What tax?

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Anonymous Coward

re: No it wont. It doesn't work like that.

Said someone who's never read the news ever.

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No, that's Amazon's job now ..

"Hey Alexa, where are my tax records for 2015?"

Alexa: "Let me just check my S3 Bucket for you"

What could go wrong?

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"and the price reduction on this was more than 50 per cent for us."

"AWS took a large loss on this"

That's only part of it. Sure, for reasons of reliability, scalability etc it does make sense to rely on a big cloud provider, but it's not all about money. HMRC put themselves in a position where their critical infrastructure depends on a company who it shuuld be looking very closely at for playing "jump-the-tax-loopholes".

Incidentally, it strikes me as curious that Amazon along with Google, Apple, Starbucks and a few others are often mentioned as great tax dodgers but Miscrosoft rarely gets a mention...

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Re: tax dodging

"And thank God none of them have anything to do with running the country."

Thanks withheld. They did enough damage when they were running the country.

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Anonymous Coward

You can have as much discount as you need...

... but the price remains the same.

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>"AWS took a large loss on this?"

Nope, they simply have economy of scale and don't pay any tax. Not even to Uncle Sam.

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Re: tax dodging

>"Thanks withheld. They did enough damage when they were running the country."

Oh and the tories have done so much better on the economy in the last seven years? Wake up!

http://uk.businessinsider.com/uk-economy-q1-gdp-third-estimate-brexit-2017-6

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"So either cloud margin is stupendous (which seems rather unlikely bearing in mind the large amount of competition)"

That's the thing thought isn't it, exactly how many firms do you think were certified to hold HMRC data? Given that AWS and Azure only just got certified there probably wasn't much in the way of competition before.

Or to put it another way, this is a government contract, do you really think that HMRC were paying normal commercial rates?

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Joke

And in other news

AWS says they got nearly all their tax bill knocked off by HMRC

Actually, they didn't. I just made that up. I am absolutely sure AWS & Mega Corp pay all taxes due and more besides in order to occupy the moral high ground.

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Of course not

"He said the data would be held in the UK and would not be shared with the US."

The relevant agencies will just take a copy of what they want.

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Big Brother

Re: Of course not

ROFL

I soon won't matter what that [redacted] says. Once the USSC says yes to the Feds then it will be open season on all data held by US companies anywhere in the world. They'll be able to collect it all and Amazon/MS/Google/Oracle/Rackspace/Apple/whoever won't be able to stop them.

Uncle (sic) Sam is indeed the top Big Brother these days. Google and Facebork are mere also rans.

The only difference is that the clock won't strike 13 as US times never go beyond 12.

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Re: Of course not

This is a crucial point. US judges can order US companies to release data even though it is held on servers entirely outside the US and have done so in the past (search for Microsoft Dublin).

- 50% savings are good

- Outsourced infrastructure good

- UK tax payer data at the mercy of the US Trumptatorship - sad. Very, very sad.

Also, is this just IaaS, or are HMRC locking themselves in to the entire proprietary Amazon application stack, in which case two suppliers just narrowed down to one. Bend over the barrel HMRC .... this is going to hurt. That 50% was just an introductory offer.

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Re: Of course not

"Uncle (sic) Sam is indeed the top Big Brother these days. Google and Facebork are mere also rans."

Perhaps. But they do have the excuse of stopping bombers, organized crime, and other criminal activities. Whereas Google, facebook et al, slurp up your life firstly the better google up your bandwidth in order to try to sell you shit you don't need, and secondly to manipulate your opinions and dull your senses.

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Anonymous Coward

Re: Of course not

"US judges can order US companies to release data even though it is held on servers entirely outside the US and have done so in the past (search for Microsoft Dublin)."

Microsoft refused to release that data and subsequently redesigned their security so that remote access to local data requires local approval. So it doesn't matter anymore what a judge in the US says about data in Ireland. If a request isn't legal in Ireland, it's not happening...

Unlike Google who's security isn't as good (presumably largely because they are built on *Nix and you can't block root access to a file system like you can block admin access in Windows as *Nix doesn't have a very good ACL / security model in comparison) and they CAN access remote data from the US...

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Big Brother

Re: Of course not

" If a request isn't legal in Ireland, it's not happening..."

Maybe. Unfortunately Ireland is not the UK. Remember, the UK like the US is part of the "Five Eyes" intelligence group and it's a good bet that if one of the members wants data held by another member it will be passed on.

Being a smaller, non-aligned country certainly has its advantages when you want to say no to the likes of the US.

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Re: Of course not

@Dr Who

Apart from the US companies involved told the judge to jog on. google are paying 10k a day in fines (or at least accruing that amount) while fighting it. MS are still fighting, and will win i'm sure.

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Anonymous Coward

Re: Of course not

The Microsoft Dublin case isn't over - its just been accepted by the US Supreme Court. It also only concerns interpretation of the US Stored Communications Act. The US has an arsenal of legislation that enables it to grab data from overseas - not least FISA (Foreign Intelligence Surveillance Act) 702 which Congress is reauthorizing to 2025

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Re: Of course not

Its called Extraterritoriality :-)

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Anonymous Coward

Re: Of course not

"The Microsoft Dublin case isn't over"

It is as far as accessing the data directly from the US in breach of EU law. They can fine Microsoft all they want, but it's no longer physically possible without approval from a local data custodian in Ireland.

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Re: Of course not

The CIA do not need a court approval to spy abroad they will just ask MI5/6 to install the necessary equipment and then start monitoring. The UK Government will be happy because when they ask MI5/6:

- have any foreign governments accessed the UK AWS data centers? the answer will be NO!

- are you accessing data held in the UK AWS data centers? again the answer will be NO!

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Anonymous Coward

Re: Of course not

"and it's a good bet that if one of the members wants data held by another member it will be passed on."

Intelligence access is a different matter. But for use in a court evidence generally needs to have been obtained by legitimate means...

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Re: Of course not

"But they do have the excuse of stopping bombers, organized crime, and other criminal activities"

with the key word there being "excuse"

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Re: Of course not

"They can fine Microsoft all they want, but it's no longer physically possible without approval from a local data custodian in Ireland."

Is this actually the case? The only thing I've read on these lines is about this arrangement being put in place in relation to the new DC in Germany. It's possible they've rolled this out elsewhere and I've missed it.

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Anonymous Coward

Re: Of course not

Am sure that the data custodian arrangement in Germany with Deutche Telekom has not been replicated elsewhere. It was a very local and specific response to the requirements of the German regulators

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Re: Of course not

"Unlike Google who's security isn't as good (presumably largely because they are built on *Nix and you can't block root access..."

That's an amazing pile of ground axes and bad assumptions you've got there. Bravo.

Out of interest, what is The MS equivalent of a Container, and how many reboots does it requires to use?

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Re: Of course not

You mean something like this https://azure.microsoft.com/en-us/overview/containers/ ?

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Roo
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Windows

Re: Of course not

"*Nix and you can't block root access to a file system like you can block admin access in Windows as *Nix doesn't have a very good ACL / security model in comparison) and the"

You fail at UNIX, OTOH you excel at talking smack and making stuff up. Just a few pointers for you:

1) root is not an "Admin Account", and it shouldn't be used as such - we've known better for several decades now.

2) chroot was available in UNIXland at least a decade before WinNT was even on the drawing board (Win 3.1, 3.11, 95, 98, ME et al didn't really have anything like that). Better and more comprehensive mechanisms have been implemented many times over since over the past *three* decades as well.

3) As for MS "redesigned their security so that remote access to local data requires local approval" - they have been doing that off and on since NT was released and quite frankly the CVE reports speak volumes for their fallibility when it comes to securing a machine running Windows.

Being cynical I doubt you'll be taking any of the above to heart given that you are probably just shilling or trolling - where the truth or rational arguments aren't actually relevant.

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Re: Of course not

You mean something like this https://azure.microsoft.com/en-us/overview/containers/ ?

Yes, except on your own PC, like chroot on Unix, jails in BSD, Zones in Solaris...

I've been given a commercial binary to run which I don't trust. I'm putting it in a Zone, and confining its cpu/mem/network/filesystem access. What do you do?

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Where will AWS get the other 50% from ?

Is the NSA paying the other 50%, if so will they get a sly copy of all HMRC data in the AWS cloud?

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Anonymous Coward

Using small companies for data-storage is becoming less and less popular.

SME-IT companies will focus more and more on connectivity, maintenance, software, etc. and less and less on storage.

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Competition is great!

But 50% off? That sounds like predatory pricing - using past profits / profits made elsewhere to push a smaller competitor out of business.

That's a bad thing.

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Re: Competition is great!

Nope small companies just can't compete at cloud level.

They would have to build several DC's with all the costs, have to buy all the equipment in at near normal pricing and then pay the staff.

They may have 10 staff looking say after 100 racks, where as Amazon may have 10 staff looking after a 1000 racks.

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Re: Competition is great!

It's only a bad thing if you can prove it. Which can get tricky when commercial sensitivity trumps disclosure. Or it should be a simple decision because AWS doesn't (for tax purposes) make any money in the UK. And if it's bought this business at a loss (Finance can do that), it would be an even more tax efficient deal. And if anyone complains, well, a 150% increase to put the deal on par in an equally efficient (not tax avoidance) manner wouldn't be in the public interest now, would it? And competitors are free to use the same tax strategies as Amazon, because HMRC believes in a level playing field, and treats SMEs and multinationals with armies of lawyers the same way.*

But both carefully selected partners share similar flaws, ie US disclosure requirements, and getting your systems & data into AWS/Azure is easier than getting it out again. So much for government 'open source'. The IRS will no doubt be happy if they can subpoena UK tax records from Amazon US though, especially for an US nationals living & working here who're trying to escape their clutches.

*Yes, that was sarcasm..

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TRT
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Re: Competition is great!

Government sponsorship of private enterprise. 250% tariff.

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Anonymous Coward

Re: Competition is great!

Nope small companies just can't compete at cloud level.

They would have to build several DC's with all the costs, have to buy all the equipment in at near normal pricing and then pay the staff.

Well given the number of data centres HMRC currently operate, Amazon will be having to build several new DC's in the UK to satisfy the HMRC requirement: "We need resilience in data centres and we need someone who can hold that data for us."

Which raises the question whether part of the deal is that Amazon takeover a few of HMRC's datacentres.

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Devil

A darker shade of dark

"Is Amazon the only one who can handle its cloudy needs? No, there is one other..."

On the Dark Side.

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Re: A darker shade of dark

Always two there are, a master and an apprentice

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Anonymous Coward

Re: A darker shade of dark

"On the Dark Side."

Apparently Oracle didn't bid.

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