Amazon's 0.1% tax bill: MPs call for boycott after firm rakes in £4bn in UK... but hands taxman just £4m

• Amazon made sales of £4.3bn last year but paid just £4.2million in tax
• That means company paid a nominal tax rate of just 0.1 per cent
• Margaret Hodge, chairman of public accounts committee, calls for boycott
• Added figures were an 'outrage' and said she has stopped using company

By Peter Campbell, City Correspondent

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Margaret Hodge, chairwoman of the public accounts committee, has called for a boycott of Amazon after the company paid tax of just £4.2million on UK sales worth £4.3billion

Amazon paid just £4.2million in corporation tax last year despite record UK sales of £4.3billion – meaning it paid a nominal rate of just 0.1 per cent.
Margaret Hodge, Labour chairman of the Commons Public Accounts Committee branded the figures an ‘outrage’, and called on shoppers to boycott the firm.  
She said: ‘Amazon should pay their fair share of tax. I no longer shop at Amazon, people should shop elsewhere.’
Mrs Hodge recalled a boycott of Starbucks two years ago, after it emerged the company paid just £8.6million in corporation tax in 14 years of trading in Britain.
The action prompted the coffee chain to offer to pay the taxman £20million over two years – a move that has not yet been repeated by Amazon.
But Mrs Hodge suggested the firm could be pushed into reviewing its tax bill, saying: ‘What we demonstrated with Starbucks is the power of the consumer voice.’
Although British shoppers buy from Amazon’s UK website and purchases are delivered from UK warehouses, the company registers transactions in Luxembourg with a company called Amazon EU.
The arrangement, which has been branded ‘immoral’ by MPs, allows the company to legitimately lower its tax bill because the rate is lower in Luxembourg than in the UK.

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Amazon delivers from UK depots liek this one in Fife but payments are settled in Luxembourg.

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Despite customers buying products from a UK site which are delivered from UK warehouses, Amazon registers its sales in Luxembourg where tax is much lower

Last year the company’s UK division reported sales of £449million, up from £320million the year before. It posted a pre-tax profit of £17million and paid corporation tax of £4.2million.
But documents filed by Amazon in the US reveal the true size of its business in the UK, where sales rose 13 per cent to £4.3billion last year.

 

It means the company is now in a similar league to Argos, Dixons and the non-food arm of Marks & Spencer.
Amazon’s UK accounts, filed yesterday at Companies House, also show the company used a multi-million pound tax credit to reduce its bill even further.
It had been due to pay £9.7million in corporation tax – but used a £5.6million tax credit to slash its bill in half.
On top of this it received a £2.1million government grant – although it did not say what it was for.

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Ms Hodge recalled the boycott of Starbucks after it emerged the company paid £8.6million in tax in 14 years, saying it had shown the 'power of the consumer'

And despite coming under public scrutiny, it decided to hike the pay of a top director, believed to be UK managing director Chris North, from £211,000 to £413,000 a year.
John O’Connell, director of the TaxPayers’ Alliance, said: ‘Our 17,000-page tax code makes it too easy for large companies to exploit loopholes and run rings around the taxman.
‘The power to make our tax system simpler and fairer lies squarely in the hands of politicians.
'They must stop pontificating about tax avoidance and actually do something to fix the system that they created and have been tinkering with ever since.’
A spokesman for Amazon said: ‘Amazon pays all applicable taxes in every jurisdiction that it operates within.
‘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 28 countries in the EU.
'We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation.’