Amazon UK halves profits, despite passing £1 billion in turnover

Paterniano Del Favero
Agosto 10, 2017

This is despite the fact that Amazon UK Services, the subsidiary responsible for the running of warehouses, packaging and transporting goods, increased turnover from £946m in 2015 to £1.46bn in 2016, an increase of 54%.

Revenue from its retail sales arm are funneled through a controversial separate company in Luxembourg.

Records filed on Companies House revealed Amazon made just £24 million in profits previous year, half of that made in 2015, reflecting the amount of tax paid.

Amazon has received £1.3 million credit from United Kingdom authorities which it is able to deduct from future tax bills. Amazon received this cut due to a series of deductions, including £36 million of share awards to employees.

Its total United Kingdom revenues, including its retail arm, hit £7 billion previous year.

A spokesperson said: "We've invested over £6.4bn in the United Kingdom since 2010 including opening a new head office in London and development centres in Cambridge and London this year, and creating 5,000 permanent jobs across the country in research and development, our head office, customer service and fulfilment centres, to bring our total workforce to 24,000". "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".

"We've invested over £6.4 billion in the United Kingdom since 2010 including opening a new head office in London and development centres in Cambridge and London this year and creating 5,000 permanent jobs across the country".

Will Snell, director of Tax Justice Network said that, until now, Amazon has declared just a fraction of its income in the UK. However, following the introduction of George Osborne's 'Google tax' (as reported by our sister site, The Inquirer), the company said that it would stop doing so. "People will say it's high time Amazon paid their fair share".

MPs and campaigners have expressed outrage after Amazon received £1.3m back from the United Kingdom taxman despite the company's annual sales in this country soaring to £7.3bn.

Labour MP Margaret Hodge blasted Amazon for its "blasé" attitude to paying tax in the UK.

Leader of the Liberal Democrats Vince Cable joined in condemnations of the company, echoing accusations that Amazon are manipulating the system. "We need to shift the system so that we tax real activity and the business they do here".

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