Amazon may pay no UK tax at all

Tax PlanningLast year MPs were up in arms over multinationals recording sales offshore in countries such as Luxembourg and thus not paying much corporation tax in the UK.

Amazon was one of the companies hauled before a Parliament Select Committee to explain themselves and the upshot is that they’ve reformed their tax affairs, are recording sales to UK consumers in the UK and are registered to pay UK Corporation tax.

Great news for the Chancellor and a success for the Select Committee, Amazon will this year pay more tax in the UK… except they may well pay less tax in the UK or none at all!

According to the Mirror, Amazon are investing so heavily in infrastructure that they could possibly show a loss and pay no tax at all.

We know that Amazon are investing heavily in multiple areas, they’re opening up new Amazon Logistics depots, setting up food deliveries, setting up one-hour deliveries, investing in technology and it all costs money. Amazon are one of the few companies who’ve never bothered about making a profit for their investors but for 20 years happily posted losses pouring the cash into expansion and diversification.

It’s somewhat ironic that moving their tax back to the UK also means they’ll be offsetting their investments against their tax bill and could pay nothing this year. As we’ve always said however, if it’s all within the tax legislation and the legislators don’t like it, it’s down to the law to be changed, not for Amazon to make voluntary tax donations.