The UK tax authorities are investigating the tax affairs of online giant Amazon, it has been reported. Those reports say the company is not paying corporation tax in the UK, despite turning over more than £7bn in the country in the last three years.
Amazon.co.uk is the UK’s biggest online retailer, maintaining its position at the top of the IMRG/Hitwise Hotshops List Top 100 in recent years. But although, reports The Guardian, the company turned over more than £3.3bn in the UK last year - and at least £7.6bn in the last three years - it paid no UK corporation tax on the profits from that income. That’s because the company is owned by Amazon EU Sarl, based in Luxembourg, with the UK operation, said The Guardian, classed merely as an “order fulfillment” business. That is reported to have been the case since ownership of the business was transferred from Amazon.com International Sales in 2006. Had Amazon.co.uk been based in the UK, reports The Guardian, it could have paid around £100m in corporation tax in the past three years. That figure is based on the assumption that Amazon.co.uk would have paid corporation tax on its UK profits, projected to be 3.5% of its UK sales, over that period. Its UK sales are said to have totalled between £7.6bn and £10.3bn.
In a statement, Amazon said: “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.”
HMRC said it could not comment on individual businesses’ tax affairs. A spokesman said: “We can't discuss Amazon for legal reasons, but HMRC applies the tax laws as they apply to multinationals so the UK receives the tax revenues to which it is legally entitled.
“Where there is a high risk of the UK losing out we move our resources to challenge that risk and HMRC works within the Joint International Tax Shelter Information Centre (JITSIC) on a co-ordinated global approach to prevent loss of tax through unacceptable corporate structuring.”