The online retailing goliath Amazon’s UK business paid just £11.9mn in tax last year, despite earning £5.3bn in sales from British shoppers.
Amazon’s Luxembourg arm, called Amazon EU Sarl, took in the £5.3bn of sales, with UK sales rising by 14 per cent in 2014.
However, the British-based Amazon.co.uk Limited subsidiary recorded a profit of £34.4mn, resulting in the £11.9mn tax bill, according to results filed at Companies House.
The accounts say that Amazon.co.uk Limited does not sell goods online to British shoppers – as Amazon EU Sarl does this instead. Amazon.co.uk Limited’s turnover of £679mn comes from providing “fulfilment and corporate support services” to the group’s arm in Luxembourg, which is a tax haven.
UK sales account for 9.4 per cent of Amazon’s global turnover, while the company also takes in billions from other European countries such as Germany and France.
The accounts also highlight the UK business is continuing its rapid expansion. The document shows that 7,722 staff in warehouse, procurement, software and other roles were employed during the year, up from 5,912 in 2013.
This comes a month after Amazon opened taxable branches in its main European markets, including the UK. This is likely to see tax revenues increase for HM Revenue & Customs, as they will claim on all Amazon sales with British online shoppers.
This increase, however, is unlikely to be large, the electronic retailer has warned, as the tax will be based on profit and not revenue.