UK tax for Amazon falls to £1.7m from £7.4 two years ago

Published on: 3rd August 2018

Amazon’s accounts reveal that it made an operating profit of almost £80m, up from £48m in 2016.

As reported by the BBC, the online retailer’s full tax bill was £4.6m, but it has deferred paying the remaining £2.9m. One reason for the lower tax bill was a rise in share-based payments for staff, up from £37m in 2016 to £55m last year.

An Amazon UK spokesman said it paid all the tax it was required to “in the UK and every country where we operate”.

“Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment.” he said in a statement.

Amazon UK Services is the division that runs the fulfilment centres which process, package and post deliveries to UK customers. It employs more than two-thirds of the 27,000-strong UK workforce.

Turnover for Amazon in the UK jumped from £1.43b to nearly £1.98b as the Seattle-based giant attracted more customers to its online shopping and entertainment offerings.

Earlier this week, Amazon reported record quarterly profits of $2.53b (£1.9b) worldwide for the three months to 30th June.

According to Dominic O’Connell, Today’s business presenter, explained how the tax calculation has come about. “Amazon Services UK runs customer service and warehouses in the UK – actual retail sales are routed through a different company,” he wrote in an article on the BBC’s website. “Turnover was just under £2bn, operating profits nearly tripled to just under £80m, but the company was able to reduce its tax liability by deducting part of the payments its makes to staff in the form of company shares. Any company can do this – it is not an Amazon -specific tactic. It then deferred some of tax, and ended up paying just £1.7m.”

He added: “This will be a bitter pill for high street retailers, which are struggling to survive under an exodus of shoppers of online yet are unable so easily to minimise their tax burden. They also claim their physical location means they carry an extra burden of high business rates.”


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