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Amazon tax avoidance will hit UK businesses – John Lewis MD

Tax avoidance schemes like Amazon's could seriously hurt UK businesses, says John Lewis MD Andy Street

15 Nov 2012 Accountancy Age

By Calum Fuller

amazon-box

THE "AMAZON TAX ISSUE" will damage UK-based businesses unless the government takes decisive action, according to John Lewis managing director Andy Street.

Without action against avoidance, Street said Amazon would be able to "out-invest" and "out-trade" UK companies.

"There is less money to invest if you are giving 27% of your profits to the Exchequer," Mr Street told Sky News's Jeff Randall. "Clearly, if you are domiciled in a tax haven, you've got much more [money]. They [Amazon] will out-invest and ultimately out-trade us. And that means there will not be a tax base in the UK."

He added that multinationals should be taxed on earnings on a country-by-country basis.

This week, Amazon's director of public policy Andrew Cecil appeared before the Public Accounts Committee alongside representatives of Google and Starbucks.

He was reproached for his lack of "serious" responses to their questions and was told a more senior executive who could provide more detail would be ordered to appear.

The online retailer has drawn substantial criticism for driving its UK sales through Luxembourg, despite employing 15,000 people across several warehouses in the UK.

Amazon's UK profit was £207m last year, Cecil told the committee, on which it paid just £1.8m.

Visitor comments

government apathy

is it any wonder that these companys get away with not paying their proper amount of taxes when our own bbc staff do exactly the same thing get after these people take an example from france who dont mess about and have already took one of these large companys to task . thank you .

Posted by Andrew, 15 Nov 2012

AMazon Tax avoidance hits UK taxpayer's interests

Amazon, among other multinational companies, are allegedly avoiding corporation tax through transfer of what would normally be regarded as profits to their Luxembourg HQ by the use of tricks such as invoices for servcies or other in-house mechanisms. Any company genuinely making no profit would not survive for long. Responses such as 'Amazon provide employment' and 'Amazon pay VAT' are not adequate.

UK urchasers of goods from a "UK" company expect that the inevitable business taxes from profits built into the prices they pay will go to the national coffers to support the nation.

These non-tax paying companies are causing UK Taxpayers to pay more for their national needs or receive less by way of education, health care etc, than would be the case of such multinational companies paid their taxes in the country of purchaser.

The residents of Luxemburg and similar tax havens are no doubt doing very nicely out of the taxes paid there by such companies at the expense of UK taxpayers.

Of course, one way to minimise this is to refuse to buy from these companies which is precisely what I have done. There are many other competitve sources. Don't be mislead by Amazon's slick internet marketing or there undoubted capability to reaching the market place, there are others out there that do pay the taxes we should expect them to pay.

Posted by Leo, 14 Dec 2012

 

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