Amazon forked out just £10m extra in UK corporation tax in 2018, despite a £358m surge in revenues from the company’s UK warehouse arm to over £2.3bn.
Figures contained in a Companies House filing show that the US giant’s logistics wing paid a total of £14m in UK tax in 2018, up from £4.6m the previous year. The rise came as the division’s total revenues increased to £2.345bn in 2018, up 18pc from £1.987bn in 2017. Profits before taxation for the UK division also increased to £75m from £72m in 2017.
Firstly, taxes are charged on profits, not turnover. So, the rise in turnover is irrelevant as compared to the tax bill.
Secondly, paying the workers is one of the expenses of running a company. And there’s a tweak to the manner in which we record payments to the workers. If the company pays them in cash, or through PAYE, or in the use of a car and all that, then the cost of paying the workers comes off the revenue numbers before we calculate the profit. If the company pays them in shares – you know, that inclusive capitalism, including labour in the profits of the organisation – then that cost comes off after we’ve calculated the profit but before we calculate the taxable profit.
Thus anyone who distributes profits – by shares and equity – to the workers will appear to have a low tax bill. But we like people distributing profits and equity to the workers.
Thirdly and finally – in order not to mimic the Senior Lecturer – there’s that issue of a company not making much profit on a vast turnover. This could be the result of one of two things. Perhaps they don’t mark up their goods and services very much. This means consumers are getting a good deal – we like this. Or, perhaps, they are reinvesting their current profits in current investment. Sure, they’re making 20% on selling us a wok stirrer but they then spend 90% of that margin on building the system to sell us the wok too. We like business investing in the future.
But the current narrative is that big business just doesn’t pay enough tax. Thus we get these lies – lies in their implications and meaning, even if not with the specific facts – about the taxes being paid.
Yea, even at the Telegraph. So what was that you were saying about Britain’s right wing media?
Speaking of the Senior Lecturer:
Murphy said he would expect Amazon to pay at least £100m in corporation tax alone at its UK business, assuming that it made profits at a similar rate to the group as a whole. “There is clearly an underpayment to explain,” he said, calling the payment by Amazon UK Services “the square root of diddly-squat”.
That’s rather one of those fundament calculations rather than fundamental, isn’t it? Given, you know, that he complains that he’s not got the numbers to do the calculation. Say, the stock grants?
Paul Monaghan, chief executive the Fair Tax Mark, which accredits businesses which are fair and transparent in the tax they pay, said: “The numbers sound like pennies down the back of the couch.” He said Amazon UK Services’ £14m UK current tax bill did not compare well with the Fair Tax Mark company Lush, which paid only about £1m less in tax on profits of £23.4m, less than a third of that made by the Amazon division.
And how much equity is Lush handing to staff?
Lush is a privately owned company with a small number of shares available on an invitation basis only.