Amazon tax petition heading to Downing Street

HMRC vs Amazon Google StarbucksA petition is due to be delivered to Downing Street by independent bookshop owners Frances and Keith Smith, who run Kenilworth and Warwick bookshops.

The petition calls on Amazon to “pay their fair share of tax in the UK” saying “The unfair advantage that your tax dodge gives you is endangering many UK high street businesses” and imploring them to “Please do the right thing”.

Frances and Keith SmithThe petition reached 100,000 signatures but in the last few days has soared to almost 160,000 signatures. The Smiths say that Amazon paying little or no Corporation Tax in the UK is “not a level playing field and leaves independent retailers like us struggling to compete just because we do the right thing. Experts say if Amazon’s total UK sales profits were not funnelled to Luxembourg, it could be paying as much as £100m a year in British corporation tax“.

Amazon are of course not the only business under fire for their tax arrangements. Eric Schmidt, Google’ chairman claims that paying little UK Corporation Tax is just “the way taxes are done globally“. Google diverts most of the £3.1 billion generated from the UK into Ireland and paid just £7.3 million in Corporation Tax last year.

In a Radio 4 interview Schmidt said that the £6m Google paid in UK corporation tax back in 2011 complied with all applicable tax laws and brushed the issue aside saying that the the Google tax arrangements are similar to many of other companies. He also pointed out that British multinationals with operations in the US were using similar tax arrangements.

Starbucks famously diverted most of their profits overseas and then made a donation to the UK Exchequer to try and quell complaints, but tax should not be a voluntary donation – each company and individual should pay their dues.

The one surprise is that eBay have so far escaped the public flogging and whilst they’re probably very happy to see Amazon, Google and Starbucks taking the flack it’s not just those three companies who are avoiding UK taxation.

The blame can’t be laid at the door of the companies avoiding tax either – it’s the UK and EU legislators who write the tax code that enables them to operate internationally and it’s the legislators who should close the loop holes being exploited. If the UK public want to see more companies paying their share of tax in the UK based on profits generated within the UK then the tax laws need to be amended so that the tax can be collected.

Eric Schmidt of Google agrees saying on Radio 4 “I think the most important thing to say about our taxes is that we fully comply with the law and we’ll obviously, should the law change, we’ll comply with that as well