They are at it again. In a year when profits apparently hit £80m on turnover of a touch under £2bn, the UK arm of Amazon has paid corporation tax of just £1.7m, despite having almost doubled its operating profit.
The true situation is actually far more depressing: Amazon UK Services Limited largely deals with logistics, and sales are filtered through Luxembourg (there's a surprise).
On the face of it, this cannot be right. Why are some of the biggest companies in the world allowed to shelter their tax profits by claiming that sales are made in tax havens (or if you prefer, low tax territories), when anyone looking at the business would come to completely different conclusion regarding the location of the trade?
Yet again, the tax authorities seem to be up the South American river without a paddle, practically ridiculed by this multinational conglomerate and the advisers who ensure that its liabilities are at the kind of levels that no individual could dream of without indulging in outright evasion.
I cannot believe that after all these years there is no solution to this issue. Many readers will immediately respond that Amazon UK Services Limited is merely paying the amount of tax that is legally obliged to settle under domestic rules. This may well be right. However, if that is the case, isn't it about time that the law was changed?
Those in the tax avoidance industry, including so many accountants, will instantly protest that the law is designed to collect the correct amount of tax. These days, that is disingenuous.
Tax law in the UK and also internationally was created before the world went digital and shrank. While many of the existing provisions would be effective if Amazon traded in the UK and nowhere else, they are clearly laughably avoidable in the current day and age.
If the UK tax authorities and government are unable or unwilling to take the necessary actions, then surely it is time for the OECD and others to step in, making some swift and effective changes that will help to redress the balance.
I look forward to a tirade of negative reaction from those who believe in riding the wave of old-fashioned, ineffective tax legislation. But some readers might begin to wonder why they are paying tax at effective rates that are around 10 times those of one of the largest corporations in the world.
About The Imprudent Accountant
Someone who should know better, but can't resist the occasional rant about the more exasperating aspects of the accountancy profession.