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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1. 1. Thursday 29th November 2012 09:10 GMT IT veteran
    
    Re: Duty Free at the airport anyone?
    
    Because the UK has a special agreement with the Channel Islands that goods below a certain value will not be taxed on entry, originally put in place to help Guernsey's flower exporters. I think the value was reduced in the last budget because of the outcry about Amazon et al exploiting the loophole.
    
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Wednesday 28th November 2012 16:33 GMT Anonymous Coward

jobs

At least Amazon and Starbucks employ a good number of people in the UK. Amazon also provide business and thus jobs to shipping companies and Starbucks pay a lot in rent and business rates

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1. Wednesday 28th November 2012 16:34 GMT TRT
  
  Re: jobs
  
  You can't throw a brick in London without hitting a Starbucks or a McDonalds... I know, I've tried!
  
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2. Wednesday 28th November 2012 16:35 GMT hitmouse
  
  Re: jobs
  
  It's swings and roundabouts - lots of high street bookstore jobs lost.
  
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3. Wednesday 28th November 2012 16:48 GMT qwertyuiop
  
  Re: jobs
  
  And presumably they want all those people they employ to be able to read and write, count, and have other skills obtained at school? And when their employees are ill they'd like them to be able to see a doctor or go to hospital? And to be able to drive to work on a road, or get a bus which also uses the road? Presumably they'd also like some framework of laws and people to enforce those laws so that their goods don't get stolen from their warehouses, their PCs don't get stolen from their offices, etc. I could go on...
  
  Now, who are we going to get to pay for the schools, teachers, doctors, nurses, hospitals, roads, police, judiciary, prison system etc.
  
  Oh! I know! It could come out of taxation...
  
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4. Wednesday 28th November 2012 18:09 GMT Tom 7
  
  Re: jobs
  
  From what I've heard most staff in Starbucks and Amazon are so lowly paid they are entitled to claim income support while working so the tax payer pays for their staff as well!!!
  
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5. Wednesday 28th November 2012 18:13 GMT Naughtyhorse
  
  Re: jobs
  
  true true true
  
  BUT THEY DON'T PAY THEIR FUCKING TAX!!!
  
  Jeezus H. Christ on a fucking bike! how hard can it be people???
  
  it's enough to drive a man to godwin!
  
  (it's true he was a veggie and always nice to his mum!)
  
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  1. Thursday 29th November 2012 18:31 GMT Vic
    
    Re: jobs
    
    > BUT THEY DON'T PAY THEIR FUCKING TAX!!!
    
    The thing is - they *do* pay their fucking tax.
    
    They just don't pay as much tax as most of us want them to. Now we have to work out a way to increase their taxataion without doing something monumentally stupid to the tax system. And that's not an easy task...
    
    Vic.
    
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Wednesday 28th November 2012 16:34 GMT Yet Another Anonymous coward

Even the government does it.

The container port here, owned by the state government, has just had it's business rate assessment reduced from $50M to $20 (yes $20 not $20M) by the state government assessment board because it was losing money.

The city council, who the rates money goes to - still have to provide the highway, the bus service, the water, the sewage, the police, the fire service etc ....

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1. Thursday 29th November 2012 14:02 GMT magrathea
  
  Re: Even the government does it.
  
  This is where the rubber meets the road as far as taxation is concerned. The kind of taxation that can't be avoided without removing yourself from the service area - ie real estate / rate type taxation, has been marginalised in tax policy over the last several decades. We are now left providing essentially 'free' services to sites owned by entities that can easily avoid our stupid 'work taxes' by not doing much work here
  
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Wednesday 28th November 2012 16:39 GMT The Vociferous Time Waster

It's how the EU works...

The problem is, this is exactly how the EU is designed to work and with good reason. Corporation Tax is a stupid idea because the taxes either get passed on to the consumer or the shareholder and in either case it's easier to tax them at source using either income related taxes or sales taxes.

What we're upset about here is this idea that money is flowing out of the UK but that is nothing to do with tax and more to do with the fact that we sold all out big businesses to the US or China a decade go. All we have left is the banks and we seem to hate them.

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1. Wednesday 28th November 2012 18:51 GMT Anonymous Coward
  
  Re: It's how the EU works...
  
  Actually, we're not upset about the idea that money is flowing out of the UK, we're upset big corporations aren't paying corporation tax. Do try to pay attention.
  
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Wednesday 28th November 2012 16:41 GMT Anonymous Coward

I'm fed up of being highly taxed to the point where I prefer to shop with people who I know are avoiding it. Sorry about your dialysis machine Mrs Miggins, I have my own family to worry about and don't feel like paying for yours anymore.

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1. Wednesday 28th November 2012 18:15 GMT Naughtyhorse
  
  then get a better job! loser!
  
  i did :D
  
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2. Wednesday 28th November 2012 18:52 GMT Anonymous Coward
  
  Sorry about your dialysis machine [INSERT YOUR FAMILY MEMBERS NAME]
  
  Not all the dialysis machines belong to Mrs Miggins you utter fitwuck.
  
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  1. Wednesday 28th November 2012 19:39 GMT TRT
    
    Mrs Miggins?
    
    That'd be pie-alysis then.
    
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Wednesday 28th November 2012 16:46 GMT Anonymous Coward

Are people forgetting something

Sorry, but all this huffing and puffing from media and MPs is really forgets a reality:

- Large UK companies are doing exactly the same thing overseas. Big banks etc write off huge globally consolidated losses in higher tax jurisdictions to negate paying tax in those countries for years if not decades. BP in fact did this recently in the US, so whilst it is being hit with a fine, it is making sure all the losses count against any future tax payments in the country. Many other large UK multinationals follow similar practices, e.g. Vodafone, Barclays, RBS, Shell, etc.

- The UK has one of the lowest corporate tax rates in the developed world so often is a jurisdiction where profits are declared and in turn hand over money to HMRC.

- The current practices are completely legal and in operation by most corporates. Changing the law cannot just happen in the UK, but will need agreement across the globe, something unlikely to happen anytime soon.

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1. Friday 30th November 2012 02:03 GMT Anonymous Coward
  
  Re: Are people forgetting something
  
  "The UK has one of the lowest corporate tax rates in the developed world so often is a jurisdiction where profits are declared and in turn hand over money to HMRC"
  
  That quite simply isn't true. If you believe it is, please provide examples of corporates who deliberately structure to declare profits in the UK, rather than elsewhere, and explain why amazon, Google, Vodafone, Starbucks etc are doing the opposite. Are they just badly advised?
  
  Here's a KPMG chart comparing corporate tax rates in major territories
  
  http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx
  
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Wednesday 28th November 2012 16:55 GMT Atonnis

And this...

....is why the UK still attracts big businesses.

Let's face it - if we really locked down all the loopholes would we really be of much value?

I suppose we would do very, very well as the world's Civil Service. We're possibly the best paper-pushers and red-tapers in the world.

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1. Wednesday 28th November 2012 18:15 GMT Tom 7
  
  Re: And this...
  
  So the only thing this big business brings to the UK are figures that make the economy LOOK more vibrant while money is just siphoned out of the country.
  
  Oh and they help keep London property prices high so making more UK business unable to compete in the wider world.
  
  It looks like the business are here for their own good not ours. We would be better off without them - unless you only live to flag wave for capitalism.
  
  1 3
Wednesday 28th November 2012 17:37 GMT All names Taken

UK Treasury too greedy shock!

Alternatively?

"

HM Treasury is so very greedy that most UK subjects do not even notice how greedy it is.

Company A with sales of £3.4 bn brought in £0.68 bn (£680 MEELLION!) to the Treasury in form of Value Added Tax returns (VAT). Yet the Treasury wants to get nasty because it just does not know how to pay itself and complete its other role as cash generator for UK civil servant perks, bonuses and top-ups.

One Council Chief Executive declared that the private sector is atrocious in many respects and mostly in how it does or more importantly does NOT pay taxes. The same commentard forgot to mention he/she/its package amounted to some £250,000 per year on top of the company car, pension perks and luscious relocation arrangements.

"

I could go on but I think you get the picture?

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1. Wednesday 28th November 2012 21:03 GMT nsld
  
  Re: UK Treasury too greedy shock!
  
  You are forgetting the VAT reclaims on rents, stock etc etc, the figure in VAT will be much smaller.
  
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2. Thursday 29th November 2012 15:04 GMT Anonymous Coward
  
  Re: UK Treasury too greedy shock!
  
  "UK civil servant perks, bonuses and top-ups"
  
  What might these be? Top level execs maybe, but for the majority of public sector employees no medical or health insurance, supply your own tea & coffee, definitely no bonus, and a good chance of being sold off in an outsourcing deal. Oh and that top exec will have been taxed on his salary & company car, so even if he is earning a fair bit he's also paying a fair bit back at top tax rates.
  
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Wednesday 28th November 2012 17:58 GMT Graham 25

Too many outraged Muppets with low IQ's

You buy from a website hosted in a foreign country, owned by a foreign company, and you pay on a credit card whose offices are overseas, on a clearing system also overseas. The goods are made in a foreign country, and are shipped to the UK by a foreign courier, until they arrive in the UK, when the Royal Mail or equivalent, delivers them. They might stay in a storage unit in the UK for a couple of days before delivery and the staff are paid in the UK, pay UK taxes, the warehouse owner pays taxes, and the company pays NI.

So no, Amazon is not a UK company and doesn't pay much in the way of taxes. If they wanted to be awkward, they could pull out of the UK, close down the distributions centre, and move it to Calais, and post the goods from there, and there still won't be aUK company. there will alos be 10,000? less employees in the UK paying taxes, several more empty factory units, a whole lot less NI payments but at least no "UK companies' are avoiding anything.

Karma.

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1. Wednesday 28th November 2012 18:54 GMT Anonymous Coward
  
  Re: Too many outraged Muppets with low IQ's
  
  Uh, no they couldn't, or they would have done. You understand that France and other countries are also pursuing these same companies, for the same reasons, right?
  
  1 1
Wednesday 28th November 2012 18:03 GMT Big-G

Easy Money!

There's more than one way to fleece a punter, and Amazon use every trick in the book .

Running a small Microbakery, I buy Flour from them. The Invoice shows them charging Cat at 20% on the goods (Flour), P&P is nil , therefore product = Price+20% vat. But Flour, being a basic ingredient food stuff is not subject to VAT. Complain to Amazon and they quickly refund, as they have done, EACH and EVERY TIME for the past 12 months. Why hurry to change the systems if only a small percentage of punters notice, and those that do , are offered profuse apologies and a refund.

I wonder what happens to the VAT collected from those who don't realise that such goods are not subject to VAT?

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1. Wednesday 28th November 2012 19:04 GMT Big-G
  
  Re: Easy Money!
  
  Oh and by the way, you wont know you're being charge VAT (as opposed to CAT ;-0) until you buy some and see your invoice ! How's that for a hoodwink?
  
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2. Thursday 29th November 2012 10:28 GMT Tim Worstal
  
  Re: Easy Money!
  
  I suggest you report them to your local HMRC office. They would be very interested indeed in such practices.
  
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Wednesday 28th November 2012 18:15 GMT Piro

Honestly, eh

If it's cheap on Amazon, I'll buy from Amazon. They have great service.

Here's the thing: I'm done looking down on people and companies for dodging tax in this manner.

We need to stop screwing around and completely disallow trading of foreign companies in this country. That is to say, if you are to trade as a business here, any and all money needs to be taxed as if it was a company in this country, no exceptions.

Sadly, political will is flaccid as an 90 year old with a heart condition, but there it is.

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1. Wednesday 28th November 2012 19:40 GMT Anonymous Coward
  
  Re: Honestly, eh
  
  Taxation really is a piece of piss, isn't it? Why do folk make such a song and dance about it, when you've got it sussed, beats me.
  
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Wednesday 28th November 2012 18:35 GMT Anonymous Coward

This is a disgrace to end all disgraces.

How far is the UK willing to stoop? What legal or moral justification do they have, for disclosing a companys private, confidential, and commercially sensitive financial affairs. Particularly when there is no evidence that there has been any relevant laws broken by the company in question.

What the hell is going on?

Also from the comments side, the snide idiot count seems to have risen dramatically. One ignorant idiots sarcasm particularly stood out

> And presumably they want all those people they employ to be able to read and write, count, and have other

> skills obtained at school?

Yes, and those peoples parents would have paid income tax, much like Amazon deduct income tax from their staffs salaries to support such noble ends.

> And when their employees are ill they'd like them to be able to see a doctor or go to hospital?

Which is why Amazon provide them with private health insurance.

> And to be able to drive to work on a road, or get a bus which also uses the road?

Are you suggesting that Amazon employees don't pay road tax? Or tax on their car fuel? Or a fare to board a bus?

> Presumably they'd also like some framework of laws and people to enforce those laws so that their goods

> don't get stolen from their warehouses, their PCs don't get stolen from their offices, etc. I could go on...

Please do. Your self-righteous stupidity and ignorance is quite entertaining.

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1. Wednesday 28th November 2012 19:51 GMT Anonymous Coward
  
  Well
  
  It's a publicly listed company. Their financial records are already, well, on record. What amazon have done is deliberately obfuscate monies earned in specific EU countries (which all have different tax laws), to make it more difficult for anyone to show they're deliberately avoiding corporation tax in different EU countries. UK MPs, trying to establish what tax is due in the UK have said bollocks to that, show us the UK breakdown. That's the moral justification.
  
  Amazon provide warehouse workers with private health insurance? The same warehouse workers being paid £6.19 an hour (UK minimum wage for over 21 year olds). You sure about that? Lets even go along with that lie, and say they do. Private health care doesn't cover every health situation. In many circumstances private health care backs "difficult" cases out to the NHS. It's not an either/or situation, you go NHS or you go private. An example, if you intend to have a baby in a nice private water birth suite, but it's premature, who nurses the baby back to health? It goes to the nearest SCBU unit, run by the NHS.
  
  Calling people stupid and ignorant is easy, but hollow if you don't know what you're talking about.
  
  0 1
  1. Thursday 29th November 2012 01:11 GMT Anonymous Coward
    
    Re: Well
    
    Their financial records are public record, because they're required to be under US law where amazons shares are listed. Any detail not in those records is confidential unless Amazon decides otherwise. Whatever moral authority HMRC, or UK MPs have for asking for records to look at themselves, I unequivocally fail to see their moral justification for publishing them, and making market specific, non-public information available to amazon competitors.
    
    Im not sure about specific UK positions (and you'll notice I didnt mention any), but I know for the most part, healthcare is part of amazons standard offering for permanent full time employees. Heres their US page http://www.amazon.com/Benefits-Careers-Homepage/b?ie=UTF8&node=239369011. I have no evidence that its the same in the UK, but I also have no reason to suspect otherwise. Besides, even if patients are refered from private care to the NHS, the employee will have paid income tax and national insurance to cover that.
    
    Finally, I think I know what I'm talking about, or at least you've provided no evidence to the contrary.
    
    1 2
    1. Thursday 29th November 2012 09:21 GMT IT veteran
      
      Re: Well
      
      I think you will find if you are earning 6.19 an hour, you will pay little if any income tax (and may even get tax credits, which means the job is being subsidised by other tax payers). And, as someone pointed out above, the jobs are not permanent, they are 12 week contracts with no holiday entitlement or paid sick leave.
      
      0 1
      1. Thursday 29th November 2012 12:51 GMT Anonymous Coward
        
        Re: Well
        
        > I think you will find if you are earning 6.19 an hour, you will pay little if any income tax [snip]
        
        > the jobs are not permanent, they are 12 week contracts
        
        Are you smoking crack? Seriously? You think Amazon have no UK staff earning more than £6.19 per hour? Do any of these jobs in Slough look like they're 12-week minimum wage jobs ( http://uk-amazon.icims.com/jobs/search?pr=1&searchLocation=32963--Slough )? That's one page out of 5 of jobs that they're recruiting for in Slough - not including existing staff, or staff elsewhere in the country.
        
        I do not have sufficient information to talk meaningfully about Fulfilment Centre short-term contractors( since I've never worked as one), but I would imagine that if they're available to work for Amazon for 12 weeks, then they're probably on the dole outside of that 12 weeks, in which case, even this one job role contributes to the UK economy by saving the country 12 weeks worth of dole payments.
        
        1 1
    2. Thursday 29th November 2012 18:28 GMT Anonymous Coward
      
      Re: Well
      
      Let me get this right - we're talking about whether UK employees get paid health care as part of their UK employment package with amazon, because we're discussing whether Amazon should pay corporation tax, for one reason, to help support the NHS.
      
      You asserted that Amazon employees get paid health care. I said no they don't. To bolster your position, you provided a link saying Amazon US staff get paid health care. This would be the same US that doesn't have a national health service, and is a different country, on a different continent from the one we've been discussing till now.
      
      D'you really need hand holding that badly? Sit down, let's see if we can find a way to simplify this for you. Imagine this block is America. And this piece of cheese is the UK. See how they're not the same?
      
      1 1
      1. Friday 30th November 2012 04:17 GMT Anonymous Coward
        
        Re: Well
        
        Umm no, we're discussing whether Amazon should have to pay corporation tax to support the services that their employees need. I'm arguing that no, these services should come from income tax, and that for health in particular, that Amazon provided private health insurance.
        
        You then raised the possibility without backing it up in any way that Amazon don't provide health insurance. Accepting that as possible, but unlikely. I could find no evidence of amazon paying or not paying for health insurance in the UK, but I'd be surprised if they didn't since that page shows they provide it in the US, and I know for a fact(from having worked there a few years back), that they provide it in Dublin. To get back to your chalk and cheese analogy, as much as we try to deny it, Ireland and UK are more like Edam and Mozarella. I bolstered that argument with the fact that Amazon employees paid income tax ( and I think national insurance )
        
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Wednesday 28th November 2012 18:39 GMT Anonymous Coward

transfers

Unless somethings changed recently the UK has had rules about transfer pricing and tax for a long time, basically you have to prove transactions are arms-lenghth fair market value, so not sure how Starbucks are getting around the coffee bean costs unless HMRC isnt prepared to challenge them on it?

Personally I'd just ask someone like Amazon to justify why their UK proft and subsequnet tax is at such a different rate from their global company results, if they can explain it by pointing to higher local costs (staff, rent, etc.) then alls good else assess their profit on the same ratio as their global business

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Wednesday 28th November 2012 18:49 GMT David Barr

Only half the story...

Companies pay tax in the country they have their Headquarters, it's very easy to move the profit to that country. Loads of companies choose to pay tax in the UK on profits generated outside of the UK. But of course there's no half witted journalist reporting that because there's no army of morons clambering over each other to be outraged.

Corporation tax is in a race to the bottom, and eventually there will be none, governments will raise money from taxing at the point of sale, or taxing individuals, or wealth etc.

1 1
1. Wednesday 28th November 2012 18:55 GMT Anonymous Coward
  
  Re: Only half the story...
  
  Give us some examples of these companies who pay tax in the UK on profits generated outside the UK please.
  
  0 0
  1. Thursday 29th November 2012 10:29 GMT Tim Worstal
    
    Re: Only half the story...
    
    Vodafone famously paid £1 billion and more on money it had made in Germany, recall?
    
    1 0
    1. Thursday 29th November 2012 18:35 GMT Anonymous Coward
      
      Re: Only half the story...
      
      No. I do remember them avoiding £1 billion's worth of tax they allegedly should have been liable to pay in the UK through high interest loans repayments to other divisions of the Vodafone group though;
      
      http://www.reuters.com/article/2012/06/26/us-vodafone-tax-idUSBRE85P0GH20120626
      
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      1. Thursday 29th November 2012 18:39 GMT Anonymous Coward
        
        Re: Only half the story...
        
        Also, that statement about companies paying taxes in the country their headquarters are located - what was that all about? They will do, but they're also liable to pay taxes in all the other countries they operate in. I'm not even going to bother googling, just go out on a limb and guess Vodafone's headquarters aren't to be found in Luxembourg.
        
        0 1
Wednesday 28th November 2012 20:17 GMT Anonymous Coward

I'm doing all my christmas shopping at Amazon

As long as they're the cheapest that is. Debenhams and John Lewis are actually cheaper sometimes.

You've as much chance of making Amazon pay 26% tax as you do of taxing drug dealers.

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Wednesday 28th November 2012 20:34 GMT All names Taken

Seemplz but shtoopeed?

You Breeteesh ar so seemplz an so shtoopeed no?

Your seeveel servants flees you an you want to geev em more no?

You work hard for your pennies an want to geev them to meeleeonairz such az fooballerz, seengerz an feelm starz but not for elth or keepeen you kleen.

Per'aps you erthleengz get wot you deserv yes?

0 0
Wednesday 28th November 2012 20:44 GMT Anonymous Coward

Increase minimum wage?

So why not abolish corporation tax and significantly increase the minimum wage? If this was done to make the change for UK companies like John Lewis almost neutral, then those paying fair now would be no worse off, and those dodging their share would see an increase in employment costs, bringing in more cash. If it is not enough then increase minimum wage further still, based on a companies turnover, a large corporation should be able to pay more. Employees would then pay more income tax, have more cash to spend and hopefully keep the cash in the UK economy and not overseas.

There would also then be no need for all the different tax credits and the bureaucracy that goes with it, saving central government more money.

1 0
Wednesday 28th November 2012 20:44 GMT hughy

Not much profit! Seems Amazon need a tax break!

Isn't the most surprising thing here the absolute pittance that Amazon make! 3.35Bn sales vs 74m Profit! Seems like Amazon work hard for not much, given the scale of their operation and the number of people involved. I suppose this is post wages and bonuses etc.

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1. Thursday 29th November 2012 15:11 GMT Corinne
  
  Re: Not much profit! Seems Amazon need a tax break!
  
  Well that is sort of the definition of profit - income minus all necessary costs, which includes wages, consumables, stock purchase, rent, accommodation etc.
  
  1 0
Wednesday 28th November 2012 21:27 GMT Jolyon Smith

They aren't breaking the law, it's all legal etc etc

Slavery used to be legal.

It also used to be legal to rape a woman [in the UK] as long as you married her first (as recently as 1991!)

Laws can be changed, and they often are when the behaviours that they permit are deemed to have become intolerable by the society governed by those laws.

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1. Thursday 29th November 2012 13:05 GMT Anonymous Coward
  
  Re: They aren't breaking the law, it's all legal etc etc
  
  There's one big difference there. Slavery and rape are immoral. Tax efficiency isn't.
  
  Besides not that it's relevant ( since tax is a legal rather than a moral issue ), but Amazon pay plenty of UK taxes ( including Income tax and VAT ).
  
  In fact Amazon NOT taking measures to optimise their tax liability would be in violation of laws requiring them to optimise value for their shareholders.
  
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