MPs ready with questions for Amazon over taxes

MPs are ready with questions they want Amazon to reply in Parliament about its UK tax status after an investigation by The Guardian newspaper revealed that the online retailer was pushing the tax rulebook to its limits to minimise its tax bill.

According to the company's filings, the online retailer's main UK company paid only £3.2 million in corporation tax on sales of £320 million last year; the Seattle-based group had, however, told investors its 2012 UK sales were £4.2 billion.

The Guardian investigation has revealed that Amazon was pushing definitions close to the limit; and tax authorities were unable, or unwilling, to prevent the imposition of aggressive tax avoidance structures.

The newspaper has collected detailed information regarding extensive UK activities that suggested HM Revenue and Customs could take a much tougher line on taxing Amazon's multibillion-pound British operations.

Among the determinative factors of a business's liability to taxation in the UK was the location of those negotiating deals. A UK publishing executive confirmed negotiation of his contract on behalf of Amazon EU Sarl, the Luxembourg company, by staff from the British head office in Slough.

According to the executive, the contract might be with Luxembourg but it was the people from Slough who negotiated the details of the contract such as the discount that the company worked out to give them. He added, there were also people in Slough who were tasked with oversight as to the proper execution of the contract.

Meanwhile, the retail giant's £2.4 million corporation tax figure almost exactly equaled the amount the firm received over the same period in government grants aimed at attracting the corporate giant to the UK, according to new accounts filed with Companies House.

The firm's figures for 2012, published yesterday, had led to angry reactions by unions and politicians and renewed calls for the company to be barred from further handouts until it paid a fairer share of tax.

The UK government had insisted that cracking down on companies and individuals that avoided tax was a major priority and had called for closer collaboration between European nations to share tax and financial information.

The outrage over Amazon's tax payments in the UK comes after Starbucks and Google came under attack for its minimal UK tax payments.

According to Peter Walsh, Scottish spokesman for union Unite, the latest Amazon tax payments were a ''drop in the ocean'' as against its vast UK sales figures.

He said it was the need of the hour to look at tax reform and how to achieve tax justice.

The taxes they paid, he said, combined with the fact that they were a low-wage, low-skills employers, posed the question as to what benefit they brought to Scotland and to the UK. Significant public funds had gone into luring the employer and this was what was being returned, he added.