Amazon has reported that its UK corporation tax bill nearly halved to £4.5 million last year, even as pre-tax profits at its UK business tripled to £72 million. The figures, disclosed in the annual filing of Amazon UK Services, the company's warehouse and logistics arm, come days after the US giant posted a record $2.5 billion profit globally.
Turnover at Amazon UK Services rose 35% to £1.98 billion, driven by increased activity in packing, delivery, and customer service. However, the company's tax liability fell from £7.4 million in 2016 to £4.5 million in 2017, after receiving a £1.3 million tax credit the previous year. Amazon attributed the low tax bill to slim profit margins in retail and heavy ongoing investment.
An Amazon UK spokesman stated: 'We pay all taxes required in the UK and every country where we operate. 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.'
The reduction in tax came despite a surge in employee share scheme payouts, which rose to £125 million from £95 million in 2016, benefiting from Amazon's rising share price. Under UK tax law, companies can deduct the value of vested shares from their tax bill. Average pay for warehouse and logistics staff stood at £33,000 per year.
Amazon has invested over £9.3 billion in the UK since 2010 and plans to create 2,500 new jobs this year. However, the company has faced criticism from unions over its tax practices and treatment of workers, particularly after securing a £600 million deal to supply public sector organisations in Yorkshire.
