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Amazon now pays 20 times LESS tax than struggling High Street firms

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Amazon has declared its lowest UK corporation tax bill in five years as the web giant was accused of killing the high street, reported Mirror (UK).

The online retailer paid £4.6million last year – or just over 6% on profits of £72million – despite the firm’s UK sales soaring by a quarter to £8.8billion in 2017.

Meanwhile, British retailers with similar UK sales paid up to 20 times as much tax.

One campaigner said: “We need to rebalance the system.”

Amazon rang up record UK sales last year as its declared profits here soared three-fold – yet slashed its corporation tax bill by over a third.

A Mirror investigation has found the online giant pays just a fraction of the corporation tax of its High Street rivals, levied at 19% on company profits.

Similarly sized retailers such as Marks & Spencer, John Lewis and Dixons Carphone declare paying over 20 times as much corporation tax while shelling out more than double on staff wages.

Amazon’s biggest UK firm, Amazon UK Services, paid £4.6million in corporation tax last year, its lowest since 2012.

It was down 36% on the £7.4million it paid the year before, despite declaring £72million profit, triple that of 2016.

The revelation comes after boss Jeff Bezos, 54, was last month revealed to be the richest man in modern history, with a fortune of £113billion, leaping £41billion ahead Microsoft’s Bill Gates.

The Mirror’s High Street Fightback campaign is calling for a level playing field for high street shops struggling against online competition.

Alex Schlagman, founder of SaveTheHighStreet.org, said: “The high street is the UK’s largest private sector employer, representing hundreds of thousands of independent businesses not using complex offshore structures to reduce their tax bills.

"It’s in the interest of all UK citizens that we support the high street and level the playing field with large online-only retailers.”

Martin McTague, of the Federation of Small Businesses, said: “We need to rebalance the taxation system. As things stand, business rates are rising while corporation tax is coming down.

“If we want to breathe life back into our high streets, that needs a rethink.”

Filings by Amazon Inc in the US revealed the firm’s UK sales hit a record £8.8billion in 2017, up 25% in a year.

But its biggest UK company, Amazon UK Services which runs the firm’s warehouses and support services and employs nearly 20,000, only declared £2billion of revenue.

It is believed much of the rest goes through its larger Luxembourg subsidiary, and it is not known how much UK corporation tax it pays.

Tax expert Professor Richard Murphy of City, University of London, said: “Amazon are still playing games in the UK.

“In the only accounts they publish for the UK they’re declaring less than a quarter of the sale they really make here.

"It looks as though they pay less tax here than they should as a result. But we don’t know if that’s the whole story, or not. Amazon is still leaving us in the dark.”

Shadow Business Secretary Rebecca Long-Bailey said: “Our high streets are falling to their knees as a result of lack-lustre public investment, crippling business rates and no support or strategy from this Government.

“At the same time they let corporations like Amazon get away with paying so little in tax.

“This morally bankrupt Government also watches on as Amazon’s profits continue to soar whilst its workers are forced to endure Victorian working conditions.

“The next Labour government will implement thorough measures to crack down on tax dodging by the super-rich and big corporations.”

Amazon insists it pays more corporation tax than the £4.6million after stopping billing UK customers through Luxembourg. But it is refusing to reveal its total UK tax bill.

The firm said yesterday: “We pay all taxes required in the UK and every country where we operate.”

Amazon also claimed that its corporation tax bill has been reduced as a result of generous share payments to staff, worth £1,000 a year to warehouse operatives.

It also points to billions of pounds’ worth of investment in the UK which has hit its profits.

A spokesman said: “In May 2015, to ensure we had the best business structure to serve our customers going forward, we established a local country branch of [Luxembourg subsidiary] Amazon EU Sarl in the UK, with all retail revenues, expenses, profits and taxes due now accounted for in the UK.

“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 have invested over £9.3billion in the UK since 2010 including last year opening a new head office in London alongside development centres in Cambridge and London.”

Working conditions in Amazon’s warehouse in Tilbury, Essex, were revealed after an undercover investigation by the Sunday Mirror last year.

A reporter found timed toilet breaks, impossible targets and workers falling asleep on their feet.

Ambulances were regularly called to the depot, where workers faced the sack if they failed to pack at least two items per minute.

Amazon said: “Amazon provides a safe and positive workplace with competitive pay and benefits from day one. We are proud to have created thousands of permanent roles in our UK fulfilment centres in recent years.

“As with most companies, we expect a certain level of performance. Targets are based on previous performance achieved by our workers.”

High St rivals pay their way
High Street shops, already struggling under punitive business rates, are often paying much more in corporation tax, wages and national insurance than their online rivals, a Mirror investigation found.

For every £100 spent at Britain’s five biggest online chains, just 9p goes to the Treasury in corporation tax, £6.40 on staff wages and 63p for national insurance payments.

But at five of the biggest High Street stores, it is £1.50 in corporation tax, £13.20 on wages and 99p for national insurance – more than twice as much.

From the accounts of Amazon UK Services, it appears that for every £100 spent by UK Amazon customers, 0.5p goes on corporation tax, £6 on wages and 61p for social security.

Amazon insists the tax bill is higher but is not revealing how much.

John Lewis plc made £10billion in UK sales last year, £1.2billion more than Amazon. It declared a corporation tax bill of £99million – more than 20 times higher than the £4.6million Amazon declared.

Its wage bill was £1.42billion – nearly three times higher than Amazon UK Services’ £530million.

An Amazon spokesman said: “This year we plan to create 2,500 permanent jobs across the country in research and development, our head office, customer service and fulfilment centres, to bring our total workforce in the UK to over 27,500.”

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Reporter: Denes Osvalt
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