Amazon's secret UK sales figures revealed by Parliamentary probe
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Globe-spanning giant etailer Amazon has given the UK government access to its British sales figures for three years, after MPs grilled the firm over its tax payments in Blighty.
Amazon said in written evidence to the Public Accounts Committee that it would like to reveal the figures on a "confidential basis" to the MPs. The firm said sales in 2009 hit £1.86bn, it took in £2.36bn in 2010 and £2.91bn in 2011.
The website was dragged in front of the committee along with Starbucks and Google to explain how it managed to pay so little corporation tax in the UK when it gave all the appearance of being quite a successful company.
None of the three firms came off very well, but the Amazon representative, Andrew Cecil, director of public policy, looked particularly ridiculous when he tried to claim that he didn't know Britain's sales figures, he only knew the sum for the whole of Europe.
MPs said that was clearly not good enough and they wanted the sales figures for the UK, which Cecil has now submitted in writing.
Despite the fact that Amazon was hoping to keep the information quiet, the committee published the evidence from the firm, which gives sales through the amazon.co.uk website, but no profits.
Obviously, having the profit figures would give a better idea of the corporation tax the firm should be paying. Instead, Amazon gave figures for the VAT it collected in the UK, rather missing the point a bit.
The sales figures also seem a bit low compared to high street retailers in Britain, where, for example, John Lewis made £8.7bn turnover in 2011 and Dixons group nabbed £8.15bn. It has been reported that Amazon's total EU turnover in 2010, for example, was more than £6bn - suggesting that Britain accounts for well under half its EU business.
Amazon's only explanation of the figures is that they are "net sales generated from the amazon.co.uk website over the past three years", there's no breakdown of what that includes.
The company also explained what firm owns Amazon's European company based in Luxembourg, another fact Cecil claimed not to know.
The internet firm said that the intellectual property rights to all its EU websites were held by Amazon Europe Holding Technologies in Luxembourg, which is in turn owned by Amazon.com International Sales Inc, Amazon.com Inc and Amazon Europe Holding Inc, all based in the US.
"This is how EU entities pay for the use of Amazon’s technology and intellectual property, which is primarily developed in the US," the evidence said.
However, the e-commerce retail businesses of the European websites are operated by Amazon EU S.a.r.L., which is then also owned by Amazon Europe Holding Technologies. EU S.a.r.L owns the inventory that goes to UK customers, earns the profits for all of Europe and processes all payments, the company claims.
In still more complicated corporate structuring, EU third part seller business goes through Amazon Services Europe S.a.r.L. on its way to EU S.a.r.L., digital business meanders through Amazon Media EU S.a.r.L. and fulfillment in the UK is from Amazon.co.uk Ltd back to EU S.a.r.L. again.
The firm didn't give any reason why its European business was structured like this. ®
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COMMENTS
I rarely stand up for big businesses - they irritate me in the way they treat people and the environment like crap in pursuit of profits, but at the end of the day, I believe that anyone, whether they are an individual or a corporation, would pay less tax if they had a legal option to do so.
If there is no evidence that these companies have broken the law, then I don't believe they should be getting shouted at and called 'immoral' and 'ridiculous' by our MP's (stones, glass houses and all that anyway).
I also feel that calling for people to boycott these companies over this tax issue is short sighted and irresponsible, as they bring money into the economy (suppliers, transport, shopfitters, etc) and the governments purse in other ways (Tax and NI on the pay of their staff, VAT).
Does this make what they are doing right? No, not at all. They should pay their tax. But rather than dragging them to committees, shouting at them and throwing tantrums, boycotting them and turning their branches into creches, we should be looking at making the law and the agencies that should be collecting these taxes more robust.
All in it together
It's all very well people getting on their high horse about tax avoidance but it's us the Amazon customers doing the avoiding: I buy from Amazon and save 20% on the high street price. Where does that saving come from? Because they're paying tax as 'efficiently' as possible and they're doing that on my behalf.
Quite frankly, the pudgy-faced chancellor gets quite enough of my cash already so I'm more than happy with that arrangement.
Re: Time to bring back the Hansard Principle?
They are unlikely to have "goofed up" their tax declaration. They are almost sure to be following the rules. The EU market rules allow for these kinds of arrangements. Our useless media is not telling us the opposite story about the countless UK companies profiting from paying tax in the UK on their French, German and other sales is higher tax countries. This is what happens when education gets dumbed down and people can no longer think for themselves.
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