back to article Now on Amazon Prime: The Amazing Shrinking UK Tax Burden

It is that time of the year again when Amazon's bean counters put into words a tale of intrigue and daring: the latest set Profit & Loss accounts for the UK Services subsidary. Spoiler: tax remains an issue. The etail-cum-cloud giant has filed a 15.6 per cent hike in revenue for calendar 2018 to £2.3bn – the numbers are …

  1. Anonymous Coward
    Anonymous Coward

    Revenue and profit

    The article gives two wildly different values for 2018 revenue - 2.3Bn and 10.89Bn - which is it?

    Meanwhile 75m profit on 2.3Bn revenue is only 3.2% which seems suspiciously low - never mind the margin if the revenue is 10.9Bn.

    And then they only pay <1m in tax? and have the cheek to point to VAT and income tax of their employees as benefits to society?

    Everything about this still stinks.

    HMRC must pull their finger out on this.

    And if we can't act unilaterally, maybe as part of Eur...damn.

    /Anyone checked if Bojo or the Mogg have Amazon shares?

    1. Chris G Silver badge

      Re: Revenue and profit

      That says everything you want to know about Amazon. Their employees pay their taxes for them.

      So called employer taxes are, in reality, a part of the employee's income for the work they carry out, it is to provide pensions, healthcare and social NB welfare, it's effectively a tax on the worker.

      As you say, a 3% gross profit is either the result of poor management or very good, tricky accounting.

      The contributions to tax revenue made by employees via such things as VAT is nothing to do with Amazon's generosity to the nation or anyone else, arguably, if Amazon didn't exist those people would be working for somebody else and paying VAT according to their individual shopping habits.

      1. DougS Silver badge

        Amazon can't count employee taxes

        How many fewer employees of brick and mortar retailers are there in the UK thanks to Amazon? Those need to be subtracted out for a fair accounting.

        Same thing with small businesses. If I opened up a restaurant in a tiny little town that had one restaurant, and drove it out of business with superior food & service, I can't say "look at all the jobs I created". I also destroyed jobs in the old restaurant, and on balance it might be a wash.

        1. Mr Slasher

          Re: Amazon can't count employee taxes

          A better analogy: you set up a drive-thru fast food outlet open 24/7 with long working hours and low wages. You chose that location because the tiny town has so few job opportunities so the council welcomed you with open arms.

          While you employ more staff than the little restaurant they have to travel from all over the region by car to serve burgers and nuggets to impatient car occupants and young people who want somewhere to hang out. Both toss their McPackaging out of the car window somewhere down the road, which infuriates the locals.

          Public transport is not possible; it's woefully infrequent, the bus stop is 1.5 miles away and services don't run at the times staff have to start and finish work. When your staff get fed up and leave it's OK as there is always somene else desparate enough to fill their shoes... for a while. Having 'Amazon warehouse worker' on their CV doesn't help their job prospects as it's the same as everyone else. They watch hours of TV and turn to binge-drinking.

          While working at the little restaurant the staff had been relatively happy/satisfied, as were the staff at the catering and other businesses that supplied and serviced them. Customers were mostly polite, the owner was not generous with wages but you got some free (real) food most days.

          The restaurant is now closed and no-one wants to rent the space as footfall is down and council rates have gone up. The landlord is poorer, the council is poorer and the local High Street is dying because they were seduced by out-of-town retail. Council services are cut year on year, as are staff and contracts. Some ex-council staff end up having to work for Amazon. Everything arrives and leaves in massive HGVs that rumble through the lanes day and night. Occasionally an driver unfamiliar with the location gets stuck in a side lane, which also infuriates the locals.

      2. jmch Silver badge

        Re: Revenue and profit

        "3% gross profit is either the result of poor management or very good, tricky accounting"

        I would add one more factor - selling certain products / services at below cost to eliminate competition

    2. Snowy Silver badge

      Re: Revenue and profit

      [quote]The article gives two wildly different values for 2018 revenue - 2.3Bn and 10.89Bn - which is it?[/quote]

      I think the £10.89bn includes good sold by third party vendors using Amazon's store front. They can say they helped generate that revenue but only the fee pay by the third party vendor is party of Amazon's revenue, this lead me to think third party vendors account for some £8.59Bn.

    3. Arthur the cat Silver badge

      Re: Revenue and profit

      Meanwhile 75m profit on 2.3Bn revenue is only 3.2% which seems suspiciously low

      UK supermarket profit margins are in the 2-3% range (see this BBC article, last few paras), so it's not impossible, given that Bezos uses profits to grow the business.

      1. Anonymous Coward
        Anonymous Coward

        Re: Revenue and profit

        It's easy really

        Turnover: 2.3 Bn

        Cost of stuff wot I bought: 1 Bn

        Cost of shed for stuff: .2 Bn

        Cost of autonomous stuff moving units (also known as workers) .1 Bn

        Cost of use of trademark 1 Bn

        Total Profit 0

        (the autonomous accounting units who miscalculated and left me actually paying real tax have, of course, been terminated)

        1. JetSetJim Silver badge

          Re: Revenue and profit

          You made a mistake - trademark cost should actually be 2Bn, giving a net loss that can be carried forward just in case Amazon have a good year in the near future and accidentally make more profit here than planned

    4. JohnG

      Re: Revenue and profit

      "HMRC must pull their finger out on this.

      And if we can't act unilaterally, maybe as part of Eur...damn."

      It is single market rules that allow Amazon and others to provide services in one EU country but invoice from another e.g. Ireland or Luxembourg. That particular scam will disappear once we are out of the single market and it will be interesting to see how the likes of Amazon cope with this change.

      1. Anonymous Coward
        Anonymous Coward

        Re: Revenue and profit

        While working at another large dot com, I saw how it's done (or was). Amazon UK effectively only buys services at nearly cost from Amazon LX, hence no profit made in the UK, all in LX. It will indeed be rather interesting when we leave the EU..

        1. Peter X

          Re: Revenue and profit

          Yeah I'm sure they'll pay more tax and not pass that on to the consumer... and then some. No way they'd do that.

      2. Jedit

        "That particular scam will disappear once we are out of the single market "

        Actually we'll be leaving the EU just before or just as new money laundering and tax evasion regulations kick in on January 31st 2020. That's why the Tories are so desperate not to extend again; it will cost them millions.

      3. Anonymous Coward
        Anonymous Coward

        Re: Revenue and profit

        ""HMRC must pull their finger out on this.

        And if we can't act unilaterally, maybe as part of Eur...damn."

        It is single market rules that allow Amazon and others to provide services in one EU country but invoice from another e.g. Ireland or Luxembourg. That particular scam will disappear once we are out of the single market and it will be interesting to see how the likes of Amazon cope with this change."

        No, it really won't. We are leaving the EU precisely because they are introducing laws to reduce these kind of loopholes, that the shadowy billionaires pushing brexit through want to avoid.

    5. Cuddles Silver badge

      Re: Revenue and profit

      "The article gives two wildly different values for 2018 revenue - 2.3Bn and 10.89Bn - which is it?"

      From the article:

      "Profit & Loss accounts for the UK Services subsidary... £2.3bn"

      "from all of its UK activities, not solely the services biz – generated a total of £10.89bn in revenue"

      Doesn't seem all that complicated.

  2. JDX Gold badge

    CT is daft anyway

  3. lglethal Silver badge
    WTF?

    Wait. What? You can choose to not pay taxes this year (or last year) so that you can pay them a couple of years later when the tax rate reduces???

    "Right, Gov, I would like to defer my tax to the year 2100. I will pay all of the tax I incur between now and then in one lump sum at that point. Unless of course taxes are due to go down in 2101. Then I'll pay you in 2101. Unless of course..."

    Please at least tell me that there are interest rates (at above inflation!) incurred on the unpaid taxes. Please?

    What's that? One rule for us and one rule for them? Oh right, yes well carry on then i guess...

    1. katrinab Silver badge

      What happens is that a particular item goes on your tax return in a different year to when it goes on your accounts.

      The reason you do this is because tax law tells you that you have to do it.

      The main examples are:

      Depreciation - Accounts rules say you have to estimate how long the asset will last and depreciate over that period of time. Tax rules say that you depreciate at 18% reducing balance if you expect the asset to last less than 25 years, or 6% if you expect it to last longer than that. There are different rules for cars where the tax depreciation rate depends on its CO2 emmissions.

      Share options and bonuses - Accounts rules say you put them in the accounts in the period where the staff-member did the work to earn them. Tax rules say you put them on the tax return when the employee receives the money and pays income tax on it.

      1. lglethal Silver badge
        Go

        <i<Of course, there is more to the story: Amazon UK noted the tax bill for 2018 was actually a hair under £14m, but was able to drop £13m of that into a bucket marked "deferred tax". It did the same trick last year, tossing £3m into the same bucket.

        ...Not that it seemingly matters, but Amazon also noted that the UK rate of corporation tax will be dropping from 19 per cent to 17 per cent for the year beginning 1 April 2020, and that "any deferred tax assets and liabilities existing at 31 December 2018 reflect this rate change".

        </i>

        I'm aware of Depreciation and the like, but being able to defer 13 out of 14 million tax, as well as 3 million last year seems excessive for a retailer.

        The additional statement that they are taking into account a reduced tax rate as part of this is what inspired my comment.

      2. fwthinks

        I am not disagreeing with your statements, but these miss the point. The rules are to ensure consistency across all businesses. However companies like Amazon have processes which are designed to specifically maximize the ability to benefit from these rules.

        You may argue that this is something that all companies could do and also represents good financial management, but I suspect that many of these internet companies are using artificial structures which do not align with the real world reality of how the company is structured.

        The bottom line is that the tax collection models are still based on 20th Century (and before) business model and the Internet has fundamentally thrown that model on its head. It will take years before a new tax model is developed that is able to cope with the way these companies operate.

        The issue for me is not the level of tax that is levied, but ensuring that the tax burden for each company/person is fairly distributed. So local companies can compete fairly with multi-nationals.

        1. gerdesj Silver badge
          Pirate

          Reality

          " ... are using artificial structures which do not align with the real world ..."

          Quite. My boring old little IT company pays 19% Corporation Tax. I suspect if you add up the CT paid by all IT companies in Yeovil, which is a pretty small town, we'd have paid more than Amazon!

          1. SkippyBing Silver badge
            IT Angle

            Re: Reality

            Genuinely surprised they have IT in Yeovil to be honest.

            Hugs and kisses from across the border in civilised Dorset.

            1. JetSetJim Silver badge
              Coat

              Re: Reality

              Someone's got to run around connecting the bits of string between properties...

            2. gerdesj Silver badge

              Re: Reality

              We have very few actual customers in Yeovil. Quite a few in Dorset though 8)

        2. SundogUK

          "Fair" has nothing to do with it. Is it legal? Yes. Don't like the law? Change the law.

          1. Steve Kerr

            But the tax laws are written by "advisors" to the government who just so happen to be the same "advisors" to the same big companies who seem to be able to skirt the rules to be just enough legal .

            Fox helping design and build the chicken coop it seems.

          2. batfink Silver badge

            Not heard of "Regulatory Capture" then?

  4. Anonymous Coward
    Anonymous Coward

    "This cannot go on! We must pay more tax!"

    I'm sure they're happy to declare it at any point, after all, tweets come cheap, or free, and don't come with a *

  5. TRT Silver badge

    Waiting...

    for them to develop an AI that puts their tax accountants out of work. At least one could take some small comfort from that bit of irony.

    1. Anonymous Coward
      Anonymous Coward

      Re: Waiting...

      god yeah imagine how awesome that'd be developing a model of the whole worlds tax laws and customs and then using that model to get an ai to dream up a ludicrously contrived but legal flow of movements and profits and loses and loans and writeoffs and transfers and currency adjustments and hedges and deemed values and intracompany goodwill valuations that sort of just pumps profit out somehow when you grind it around and for some awful AWFUL american hedge fund fuck to build the thing and run it until the money runs out and then get bailed out cos they gummed up too much of the economy to take the world down with them

      1. TRT Silver badge

        Re: Waiting...

        Or just get the current tax accountant team offices at the top of a very tall building with a roof terrace easily accessible. Rent an office on the first floor, in a block adjacent to the building, one with a good view, then grab popcorn, sit back and relax; enjoy the show.

  6. DavCrav Silver badge

    "We contacted UK MP Margaret Hodge, chair of the All Party Parliamentary Group on Responsible Tax, to get her take on things, but we imagine she's bit a busy at the moment."

    Try again tomorrow.

  7. katrinab Silver badge
    Windows

    "Not that it seemingly matters, but Amazon also noted that the UK rate of corporation tax will be dropping from 19 per cent to 17 per cent for the year beginning 1 April 2020,"

    Corporation Tax will reduce to 17% in April 2020 if Philip Hammond is still Chancellor, which is unlikely given that he isn't even a member of the Tory party any more.

    The most likely scenario is that Corporation Tax will go up to 26% (Corbyn wins the election). The next most likely scenario is that it will go down to 0% (Johnson wins the election). Or it might stay at 19% (hung parliament / zombie government). 17% is very unlikely.

    1. TRT Silver badge

      Are you forgetting the scenario where Brexit is such an appalling cock up that the corporations move out of the UK altogether and thus aren't eligible to pay the tax at any rate, 0% or otherwise?

      1. Anonymous Coward
        Anonymous Coward

        At least a pint of shit ale will be 20p cheaper again though?

        1. Anonymous Coward
          Anonymous Coward

          Downvoted as unlikely.

  8. G R Goslin

    As I've said before....

    It's not the Company that pays the tax. It's the customer. The Company is merely the (unpaid) tax collector for the Government. If Amazon doesn't pay tax, then they have the opportunity to drop their prices. Whether they do, or not, of course is up to them, but they certainly have the means.

    1. Snake

      Re: As I've said before....

      ...because Corporations are People, Too, and apparently (by your standards) have the right to use publicly-funded infrastructure without paying into said infrastructure's costs of [re]construction and maintenance.

      Thank you for allowing Big Corp. to freeload off the rest of us.

      - John Q. Public

    2. Dr. Mouse Silver badge

      Re: As I've said before....

      "As I've said before.... It's not the Company that pays the tax. It's the customer."

      I've argued this point before, too. IMHO, with the structures available to avoid corporation tax it would be better to drop it entirely and tax at the point the funds leave the company. Individuals are much easier to tax than corporations, and individuals (shareholders, employees and customers) effectively pay the taxes anyway in the form of reduced dividends and wages and increased prices. They may as well cut out the middle man and collect directly from those who are paying it.

      1. jmch Silver badge

        Re: As I've said before....

        "with the structures available to avoid corporation tax it would be better to drop it entirely and tax at the point the funds leave the company..."

        Correct. The only thing is that behaviour adapts to the environment (tax laws). I think that if money is only taxed when it leaves a company through dividend or salary payments, it would just stay in the company, and only leave through non-taxable means eg acquisitions. And many shareholders are OK with not getting any dividends as long as the growing cash pile or new acquisitions push up the stock price. The other possibility (which might sound far-fetched but is certainly within the realm of probability) is that megacorporations introduce their own de facto scrip currency based on the value of their cash holdings. So for example Amazon could give each of their shareholders a $100 gift voucher peer share to spend on their site. If that became widespread enough it could start getting accepted in lieu of real currency.

        So you would need to add a few things to the mix: (1) careful auditing to make sure that employees or shareholders are not being 'paid' through dummy corporate acquisitions, benefits, vouchers etc (2) Introduce a 'hoarding' tax on cash reserves that are more than X% of turnover. (3) make the tax rate the same on capital gains, dividends and earned income. Taxing Dividends and CG at 15% and salary at 40%+ is extremely regressive. Put ALL income into a single pot, and tax that pot in increasing rate bands as is done now for Income Tax (but you can lower the rates on each band because you get more people in the higher bands)

        1. Dr. Mouse Silver badge

          Re: As I've said before....

          "make the tax rate the same on capital gains, dividends and earned income"

          I agree with that.

          The main (justifiable) reason for a lower rate of tax on dividends is that they have already been taxed (CT), where wages (for instance) haven't. If they haven't, they should be taxed as income.

          I don't know enough about capital gains to comment, but I certainly agree with the principal of taxing all income the same.

        2. DavCrav Silver badge

          Re: As I've said before....

          "So for example Amazon could give each of their shareholders a $100 gift voucher peer share to spend on their site. If that became widespread enough it could start getting accepted in lieu of real currency."

          That is a payment in kind, and taxable.

      2. batfink Silver badge

        Re: As I've said before....

        ...assuming that the funds leave the company somewhere the local tax authorities at the point of operation/sale can get at it.

        1. Dr. Mouse Silver badge

          Re: As I've said before....

          This could be dealt with by the tax code. For example, if dividends are paid to individuals (or any non-UK registered company) they should be run through PAYE, and any paid where there is no record of taxpayer details taxed at the highest rate (with the onus on the recipient to claim back what is not owed).

          International transactions would present a tougher nut, but could be dealt with.

  9. codejunky Silver badge

    Interesting

    Good on Amazon. And while this article seems to moan for more tax I am sure there would be more backlash at the loss of tax, jobs and the freaking service of Amazon in this country.

    1. Anonymous Coward
      Anonymous Coward

      Re: Interesting

      If we 'lost' Amazon we would presumably still want tat. It's hard to see that there would be a loss in either jobs or taxes. I'm as hypocritical as the next person (unless I'm standing next to a politician) and I buy from Amazon. Doesn't mean I don't think that the world might be a better place if I got all my tat from a local neighbourhood tat shop - one that might pay rent to a landlord, fair wages to it's employees and tax to the government. And one that might reinvest its profits buying goods or services from its neighbours, rather than squirrelling it away in a tax haven.

      1. codejunky Silver badge

        Re: Interesting

        @AC

        "If we 'lost' Amazon we would presumably still want tat. It's hard to see that there would be a loss in either jobs or taxes"

        Really? We want but because its cheap, available, easily checked up on and reviewed and of course this employs not just the many people working in efficient warehouses but also the delivery companies/logistics/etc feeding off the increased business. We would lose jobs and tax's and considering how easy Amazon make it to order from the world it would have a large impact.

        "Doesn't mean I don't think that the world might be a better place if I got all my tat from a local neighbourhood tat shop"

        At greater price? Less choice? Why does a can of beans cost more in a small shop? Because it costs more than a supermarket. Amazon have gone much further than that. Local shops may not stock what you want. Nor the numerous alternative outlets. If tat was better bought locally we would, but we prefer Amazon because its better, cheaper and has more choice.

        "one that might pay rent to a landlord, fair wages to it's employees and tax to the government."

        They do. They put their warehouses where its cheaper. They pay wages equal to what the job is worth (or nobody would turn up). And they pay their tax's otherwise they would be jailed for illegal activity.

        "And one that might reinvest its profits buying goods or services from its neighbours, rather than squirrelling it away in a tax haven."

        Actually one of the complaints against Amazon is the lack of profit, which is because it gets reinvested into growing the company.

        1. Denarius
          Unhappy

          Re: Interesting

          AC, The few times I have tried to use Amazon the suppliers web pages have said they don't send to my country of domicile. I have to use the usual local specialist distributors. So much for selling to world.

      2. Wandering Reader

        Re: Interesting

        "I'm as hypocritical as the next person (unless I'm standing next to a politician) and I buy from Amazon."

        It's not really hypocrisy, it's choice. You have decided that your life is better with Amazon's prices, guarantees and convenience than with any of the alternatives. If you sacrifice Amazon on the altar of disapproval, you lose those benefits - you make yourself worse off.

        Of course, if you chase Amazon out of the UK, you might get the benefit of tax paid by the alternatives that arise. Yep - tax off cluttered bookshops, failed startups, failing legacy companies, scam artists and cowboy outfits. Don't count on that adding up to very much, though.

    2. Dr_N Silver badge

      Re: Interesting

      "Good on Amazon"

      Is that the official view of the Add-a-myth Institute?

      Tax avoidance: one of the main reasons the brextremists need a no deal.

      LOLZ

    3. Dan 55 Silver badge

      Re: Interesting

      Here's a thing, there are alternatives to Amazon. Stop your Prime subscription, use Amazon as a directory for 3rd party stores but buy direct from them. You'll find you can do just as well without Bezos' money making machine which seemingly only exists just to take his ego to the stars on the back of money saved by paying the least amount of tax and wages possible.

      1. codejunky Silver badge

        Re: Interesting

        @Dan 55

        I dont bother with a prime subscription, it is a fantastic way of convincing people to part with money for an incentive to part with more money. Also it is a good idea using them to get reviews on a product you could get elsewhere if you like (I do if its cheaper elsewhere).

        But that money machine is here and providing that facility as your directory because it is worth providing their service here. They are paying the tax they are ment to. And most businesses work on the basis of not paying more tax than they have to and same with wages.

        Compare that to people. Lots of socialist yahoos will spout off about people needing to pay more tax, and then they dont. Owen Jones was on camera having such moral compass tested and he failed. Just as we dont shop at the corner shop but go to the supermarket, because it reduces our costs even if the corner shop pays more out. Who wants to pay more for nothing? No better service or quality.

    4. Anonymous Coward
      Anonymous Coward

      Re: Interesting

      Tax on profits mean profits are being made. Amazon would not leave. Don't be so hysterical.

      1. codejunky Silver badge

        Re: Interesting

        @AC

        "Tax on profits mean profits are being made"

        Most of which get reinvested into the company creating more jobs and providing more services.

        1. Androgynous Cupboard Silver badge

          Re: Interesting

          What? No they don't. You missed a step. "Most of which are funnelled offshore to a low tax jurisdiction" is more accurate.

          Tax on profits (which is capped, of course, thanks to a forecefully negotiated sweetheart deal) is paid there, and at that point what remains reinvested, or distributed, or whatever.

  10. Anonymous Coward
    Anonymous Coward

    Funny how corporations can be people

    for the purpose of law, but people can't be corporations for the purposes of tax ....

    1. Cxwf

      Re: Funny how corporations can be people

      Actually they can (at least in the US - I’m not familiar with how it works in the UK). The paperwork is a little complex, but it’s definitely a thing you can do.

      You can’t do that AND be a conventional employee at the same time though. You either have to be a small business owner, or a contractor, meaning you give up on the various labor laws that protect conventional employees. (I gather US labor laws aren’t held in high regard here, so you may feel that’s a good trade).

      1. Anonymous Coward
        Anonymous Coward

        Re: I’m not familiar with how it works in the UK

        It doesn't.

  11. Anonymous Coward
    Anonymous Coward

    Just avoid Amazon

    Their mission is very simple. It is to drive every other retailer out of business.

    They have a monopoly on book selling and almost one on publishing.

    People rant on about the 30% that Apple (and others take for their app store). Want to self publish that novel you have been writing for years?

    Amazon will take 30% but would much prefer to take 65% of the revenue and their exchange rates suck big time so watch out if you sell abroad. You might end up with 20% of the selling price as revenue.

    If you think that Google is Evil then Amazon is in a different league of evil. They are IMHO the devil incarnate.

    1. TRT Silver badge

      Re: Just avoid Amazon

      Cold. Not like ice is cold, but like a wall is cold. Impersonal. Not like a fist thrown in a crowd is impersonal, but like a computer-issued parking summons is impersonal. And it was deadly. Again, not like a bullet or a knife is deadly, but like a brick wall across a motorway is deadly.

    2. DavCrav Silver badge

      Re: Just avoid Amazon

      "You might end up with 20% of the selling price as revenue."

      That's double what I get from royalties from my publisher. And that's their receipts, not retail price.

    3. Anonymous Coward
      Anonymous Coward

      Re: Just avoid Amazon

      yeah, avoid Amazon - buy fro ebay! :D

  12. Alister Silver badge

    etail-cum-cloud

    EEEWWWW!

  13. Allonymous Coward
    IT Angle

    Ironically enough

    HM Govt probably send a wodge of whatever tax they manage to squeeze out, straight back to Bezos via huge AWS bills.

  14. JimJimmyJimson

    Still not sure why any of this is an issue

    Unless you're voluntarily handing over money to the taxman in excess of that required by law, then you're not realy in a position to critiscise Amazon here.. They are operating legally and paying tax as required. Many of the mechanisms that are critiscised that allow for reduced tax payments in the UK are very much neccesary for functioning international commerce.

    In any event, its not like the government is spending money so well that you'd be wantng to give them more...

    1. Anonymous Coward
      Anonymous Coward

      Re: Still not sure why any of this is an issue

      Didn't Al Capone argue that his protection rackets were necessary for functioning commerce in Chicago?

    2. JohnG

      Re: Still not sure why any of this is an issue

      Amazon provide services in the UK but invoice from Ireland or Luxembourg (the goods and/or services have no connection with the country in which the invoice is generated), due to the favourable tax conditions there. My company provides services in France and the UK and invoices in the UK. If I tried setting up a scheme to invoice from Ireland, my company would be accused of tax evasion and treated accordingly.

      1. JimJimmyJimson

        Re: Still not sure why any of this is an issue

        They can't simply invoice from Ireland and avoid UK tax. They must in fact be an irish company that is invoicing from ireland, and ultimately be the company that the buyer contracted with. There is very little stopping you from setting up an Irish or Luxembourg based company and doing the same thing.

        If the UK wants to attract more tax revenue then it needs to reduce its tax rates.

        Tax is a marketplace - companies will do business where conditions are favourable.

  15. jonfr

    Tired of tax avoiders in form of a company

    I am really tired of tax avoiders in form of a tax company. This is costing the public a lot of money and this needs to change.

    1. This post has been deleted by its author

  16. Nick Kew

    Not fit for purpose

    Once again, we have an illustration of why corporation tax is not fit for purpose and should be replaced with an alternative tax structure.

    Of course, direct alternatives ain't easy: they are all flawed. One the UK has moved towards - reducing corporation tax but introducing a new tax on dividends - is linked to the shareholders' tax status and thus easy to avoid (though the minority who can't avoid it will be among the well-to-do). VAT, income tax and employment tax (NI) are valid alternatives and would be more so with a level playing field, but are historically overtaxed as easy pickings for HMRC.

    Here's a better idea we won't see in the foreseeable future.

    1. JohnG

      Re: Not fit for purpose

      One approach would be to abolish corporation tax and all forms of income tax, to be replaced by higher sales tax i.e. tax consumption, not earnings. You wouldn't allow any entity to reclaim sales tax. We already have VAT and evasion is difficult.

  17. N2 Silver badge

    Amazon avoiding tax through accounting

    What ever next?

    TAAAS - Tax avoidance as a service?

  18. Tom Paine Silver badge
    Thumb Down

    Down

    ...with this sort of thing.

    1. Mark #255

      Careful

      ...now.

  19. IvorTE

    Tax Revenue

    A thought......At some point the government (we) need to do something about the huge profits that these companies are making at the expense of the high street and our society. The problem with taxing profit is that it can be manipulated and moved around the world, taxing revenue is harder to move around the world and harder to manipulate. The easiest way to do that is to have a higher VAT on online shopping that can be re-invested into helping our society change to match a new internet world.

    1. Nick Ryan Silver badge

      Re: Tax Revenue

      Stop hankering after the past for the sake of the past. The high streets twenty years ago were not the same as they were one hundred years previously; Does this make one better than the other. Things change, get over it.

      This doesn't mean that things shouldn't be fair, but needlessly attempting to punish online retailers with a higher VAT rate helps nobody. In particular it would not help all the smaller businesses who operate online in some manner, would you suggest forcing all of these offline instead?

      If what Amazon is doing is legal, as in taking the profit and reinvesting it, that is fine and this is a perfectly fair and ethical way to operate. If they are instead using tax loopholes to move the money out of the country to where it can be taxed at a cheaper rate, aka a "tax haven" (one of BoJo's "great plans" to encourage the remnants of the UK economy once he's finished destroying it), then that is very different. The UK operates a couple of these tax havens already anyway so why not extend them to the mainland? If Amazon is paying such low wages that staff have to supplement their income and food using government subsidies then that is very bad and indicates a thoroughly broken social and economic model. Raising the minimum income will not fix this, as the increased wages will generally just loop back in the system increasing costs for the recipient and in the end nobody really benefits. None of these problems can be tacked in isolation.

  20. Robert D Bank

    a transaction tax, graduated on the value of the transaction may be more equitable. Mr cash-in-hand business excluded of course.

  21. Anonymous Coward
    Anonymous Coward

    HMRC allows this sort of thing to willingly continue and yet still carries on trying to decimate contractors and one-man-bands with IR35 because they don't have the legal clout amazon do.

    What a country.

  22. TeeCee Gold badge
    Joke

    Obvious solution.

    The Inland Revenue should modify their tax processes so that if a corporate doesn't uncheck or check as appropriate a differently placed, sized and coloured box on each page[1], they automatically charge the full whack ignoring deductions for the following year and install a copy of Google Chrome on all their PCs.

    [1] Instructions for which are held in a separate document which is updated hourly.

  23. sabroni Silver badge

    obvious solution

    Stop buying things from Amazon.

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