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Amazon UK halves corporation tax to £7.4m as sales soar to £7bn

Amazon UK halves corporation tax to £7.4m as sales soar to £7bn

LONDON: Amazon UK’s corporation tax bill halved to £7.4m last year despite its retail sales soaring past £7bn. Amazon UK Services – the company’s warehouse and logistics operation that employs almost two-thirds of its 24,000 UK staff – saw its UK corporation tax bill plunge from £15.8m to £7.4m year-on-year in 2016. The cut came despite turnover at the business, which handles the packing and delivery of parcels and functions such as customer service, rising from £946m to £1.46bn. Overall, Amazon UK received a £1.3m credit from the UK authorities, which it will be able to deduct from future tax bills.

The company, whose stock market value recently soared to more than $500bn (£386bn), received a tax credit due to a series of deductions including £36m of share awards to managers and staff. This meant its pre-tax profits halved from £48m in 2015 to £24m last year. “We pay all taxes required in the UK and every country where we operate,” said a spokesman for Amazon 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.” Last month, Amazon’s soaring share price briefly made founder Jeff Bezos the world’s richest man, just ahead of Microsoft’s Bill Gates, worth £70bn. Revenue from the company’s UK retail sales are reported through a separate company in Luxembourg and are aggregated as part of its overall European operations. However, in its US filings the company reveals that UK revenues hit £7.3bn ($9.5bn) last year. Amazon Services UK makes its money by charging Amazon’s retail business for delivering products, last year accounting for £1.4bn revenue.