Amazon UK corporation tax bill falls to £4.6m despite profits tripling

Retailer claims its taxable profits remain low because of competitive market and its investments in the UK

Amazon founder and CEO Jeff Bezos is the world’s richest man (Getty Images)

Amazon’s UK corporation tax bill fell to just £4.6m last year despite its profits tripling, its latest accounts reveal.

The online retail giant declared an increased turnover of just under £2bn in 2017 for the division running the “fulfilment centres” handling deliveries to UK customers.

Amazon UK Services Ltd’s operating profit rose from £26.5m in 2016 to nearly £80m for 2017, while its corporation tax bill fell by 38 per cent from £7.4m in 2016 to £4.6m in 2017.

The company has actually paid only £1.7m in tax for the year, after deferring £2.9m.

Tory MP Phillip Lee said the news showed corporation tax was “no longer fit for purpose”.

Amazon, which declares the profits made from UK sales through another company based in Luxembourg, defended the lower tax bill by pointing to its heavy investment in its UK business.

“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.

“We’ve invested over £9.3bn in the UK since 2010 including last year opening a new head office in London alongside development centres in Cambridge and London.

“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.”

Amazon also reduced its tax bill by making share-based payments to staff of £55m, up from £37m in 2016.

The accounts were released just days after the company announced its international profits had increased to £1.9bn for the quarter ending 30 June this year.

Amazon has repeatedly faced criticism over its UK tax bill. Last year MPs and campaigners expressed outrage after the company received £1.3m back from the UK taxman despite its annual sales in this country soaring to £7.3bn.

Last month’s Amazon Prime day was hit by a strike by staff protesting over working conditions and customers were urged to boycott the retailer in support.

The founder and CEO of Amazon, Jeff Bezos, is the world’s richest man with an estimated net worth of more than £100bn.

Martin McTague, policy chairman at the Federation of Small Businesses (FSB), 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.”