Over the last 3 years Amazon UK sales have totalled over £7.5 billion, some estimates put the figure as high as £10.3bn. All this income has resulted in a tax bill from HMRC of zero, nothing, nil. This is quite a revelation. As it follows news of so many other people in Britain being squeezed for more tax including Channel Islands based online retailers like Play and 7DayShop who only avoided the VAT on small purchases like CDs and DVDs, under the threshold value, currently £18 per packet. If I remember correctly my son bought his Xbox 360 from Amazon.de and saved a lot, it was a very hot deal at the time. Amazon.co.uk is the UK’s most popular online retailer and winner of best customer service awards. Often buyers prefer to use Amazon when prices match between online retailers.
Looking at the profit margins at Amazon.com in the US, said to be approximately 3.5 per cent, if this also applied to UK sales then Amazon would owe the treasury £100,000,000 - count those zeros! Also in the US Amazon is currently disputing a tax bill approaching $1 billion. This is to do with Amazon transferring goods between its multinational constituents to avoid tax charges. In addition to this Amazon uses the difference in US state tax regimes to its advantage, a loophole that is tightening right now. Incidentally Amazon is under investigation for its tax contributions in other countries, nearly all the countries it operates in, including; China, Germany, France, Japan and Luxembourg.
Amazon argues, in a statement to The Guardian that its UK operation is only for fulfilment of orders taken by its Luxembourg business: "Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages, dispatching products to all 27 countries in the EU. We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation." Figures from 2010 accounts show a skewed picture - the Luxembourg operation employs just 134 people yet generates £6.5 billion, whereas the UK operation employs over 2,000 employees with a turnover of just £147 million...
Many people will feel that since Amazon and the other off-shore retailers have managed to contribute to the demise of several high street chain stores it really is their duty to pay up the tax they owe.