Amazon to start paying tax on profits in the UK

Amazon have started to record sales in the UK since the 1st of May according to The Wall Street Journal. On Saturday they reported that Amazon will book sales in the UK and pay UK tax on their profits in a move which will doubtless delight George Osborne, not to mention every UK business who pay their taxes in the UK.

Previously Amazon has insisted that “a single European business is going to need a single European headquarters” as a justification for paying their tax in Luxembourg, including tax on the portion of their sales made within the UK. The Guardian quotes Amazon’s new stance as that they are “now recording retail sales made to customers in the UK through the UK branch. Previously, these sales were recorded in Luxembourg”.

According to WSJ Amazon kicked off plans to book sales and pay tax in each EU country two years ago saying “We regularly review our business structure to ensure that we are able to best serve our customers and provide additional product and services”. It’s a bit strange that Amazon executives didn’t mention this when hauled before Parliament and quizzed on their tax affairs by MPs.

Amazon’s UK MD, Christopher North has resigned from Amazon UK’s board of directors as of the 1st of May but remains as UK Country Manager. Amazon UK’s finance director Rob McWilliam also quit the board at the same time and is now Vice President, Consumables.

It will be interested to see if some of the other big tech companies headquartered outside the UK follow suit and start to book UK sales within the UK.