News - Amazon had paid no UK corporation tax

[jim]

No, NOT everyone does. I don't, for example. Just because a lot of people do something, doesn't make it morally or socially acceptable to do it.

Benefit fraudsters say the same argument: I can get away with it so why not? Because the rest of us work and pay taxes to pay for services, not so that you lazy kludgers can sit at home watching Jeremy Kyle all day! I regard it as theft, and this tax evasion is no different from the moral standpoint.

The common perception that the rich make use of tax loopholes and Swiss banks (and always get away with it because of legal technicalities) really does not help this situation.

With the current coalition seemingly targeting the poor and/or elderly alone to foot the tax bill, this is really very saddening news. Companies like this really need to grow a pair and start thinking about the society in which they operate, not just about their bottom line.

I disagree with you there. There's a big difference between "Benefit Fraudsters", i.e. Fraud, and using loopholes. That's the difference between tax avoidance and tax evasion.

The original point that cameronlite made is fair enough. Amazon didn't pay zero corporation tax because it committed fraud (at least it appears so), it did so because the law did not require it to pay corporation tax. Some people might consider that "broken", as cameronlite termed it, and others might consider it to be done intentionally.

The point is, even if I think the system is broken, I'm not going to adapt my behaviour to fit in with a mythical concept of moral taxation that has no definition. That's very different to wilful fraudulence.

[cameronlite]

No, NOT everyone does. I don't, for example. Just because a lot of people do something, doesn't make it morally or socially acceptable to do it.

Benefit fraudsters say the same argument: I can get away with it so why not? Because the rest of us work and pay taxes to pay for services, not so that you lazy kludgers can sit at home watching Jeremy Kyle all day! I regard it as theft, and this tax evasion is no different from the moral standpoint.

Agreed. However - why should I spend the entirety of my life getting the short end of the stick. If the owner of the problem/loophole knows about it and still doesn't fix it then great - if they aren't willing to fix a problem that screws a great deal of people over, why not take advantage of it?

If they didn't know the problem existed, then I would report it...

[Funkstar]

Does anyone here have any real grasp on the level of expenditure necessary to set up a major warehousing and distribution operation? The level of up-front costs for equipment, for instance? Because an element of that capital will depreciate, every year, and will be offset against profits before tax. And the expenditure is HUGE when you're setting up custom-built and custom-equipped warehouses.

You should see the size of the new warehousing and distribution centre near Dunfermline, north of Edinburgh. It is chuffing enormous!! You can see the rows and rows of warehouse racking through the large windows. the last company I worked for just spent a small fortune (to them) on the same stuff for their little warehouse so I know it isn't cheap, and they have hundreds if not thousands of tonnes of it. That alone must be worth millions.

[crossy]

I disagree with you there. There's a big difference between "Benefit Fraudsters", i.e. Fraud, and using loopholes. That's the difference between tax avoidance and tax evasion. The original point that cameronlite made is fair enough. Amazon didn't pay zero corporation tax because it committed fraud (at least it appears so), it did so because the law did not require it to pay corporation tax. Some people might consider that "broken", as cameronlite termed it, and others might consider it to be done intentionally. The point is, even if I think the system is broken, I'm not going to adapt my behaviour to fit in with a mythical concept of moral taxation that has no definition. That's very different to wilful fraudulence.

My opinion too - if Amazon broke the law (or even "bent" it) then prosecute, otherwise it's a non-event.

From what I've read Vodafone's tax avoidance was a lot more clear cut, yet it would appear that HMRC were content to let that one slide. I've also heard similar claims about certain banks, BAe, etc. Makes you wonder whether HMRC is still "fit for purpose" - maybe the current govt could privatise that rather than the NHS?

You should see the size of the new warehousing and distribution centre near Dunfermline, north of Edinburgh. It is chuffing enormous!! You can see the rows and rows of warehouse racking through the large windows. the last company I worked for just spent a small fortune (to them) on the same stuff for their little warehouse so I know it isn't cheap, and they have hundreds if not thousands of tonnes of it. That alone must be worth millions.

Aye, it's bl**dy impressive isn't it! And remember that they also took on a load of additional folks (additional because I read that all the staff from the smaller Glenrothes-based unit moved) when they opened. So a definite gain for the local economy - lord knows, it could do with one!

Oh, and since it opened I've also noticed that my Amazon deliveries usually get here a lot quicker than they used to.

[Brewster0101]

I say make them pay or shut down their UK operations. Why should such a large company get away with robbing the UK tax payer of such huge sums of money? Just because others get away with it doesn't make it right (otherwise I would go rob my local post office - after all, others have done the same thing and got away with it!).

Sorry, but the vast majority of us use Amazon because of their low prices and free postage and packaging. I am happy for them to avoid paying tax and pass the savings and benefits onto me. The government wouldn't take the tax earnings and benefit anyone but ******s... opps sorry bankers. .

[pinkpound]

Suppose amazon could do a Vodafone and take the head of HMRC out for a slap up meal then he will write the tax bill off

[davidcrofter]

This explains why Amazon can offer such a good service and barely blink when you want to RMA something - they are obviously operating at such an advantage over other UK businesses and their profit margin must be pretty immense in comparison.

[Scribe]

It's not like the government would put any extra cash to good use anyway.

[Brewster0101]

This explains why Amazon can offer such a good service and barely blink when you want to RMA something - they are obviously operating at such an advantage over other UK businesses and their profit margin must be pretty immense in comparison.

Now this is why I don't feel angry with Amazon. Their profit margin is tiny. They make something between only 3 -5 % profit on average on everything they sell. Their actual annual profit is absolutely tiny compared to their revenue. The consumer really is passed on every possible saving.

[Barakka]

Now this is why I don't feel angry with Amazon. Their profit margin is tiny. They make something between only 3 -5 % profit on average on everything they sell. Their actual annual profit is absolutely tiny compared to their revenue. The consumer really is passed on every possible saving.

It is but by maximising on any tax/VAT loopholes they can, and yes the loopholes get closed but at the expense of UK businesses. Play, Amazon (via Indigo Starfish), even Asda and Tesco have utilised the Jersey VAT loophole to offer CD's and DVD's so cheap the high-street stores couldn't compete with and we've gradually seen the high street stores disappear.

Now the loophole has been closed (as of last week I think) so the savings will no longer be there and the prices will no doubt have to go back up, but Virgin music stores are gone, Andy's Records are gone, and as anyone with any inner knowledge would tell you HMV will not be around at the end of this year. So that's it, there will be no music stores left, the only places to buy music will be online, or if you want to physically browse then the chart selection and discount buys at the supermarket will be the only choice, all at the same prices the high street were charging before the loopholes were getting exploited. From the Amazon persepctive, same product at the same prices, being imported into the UK, stored in the UK, delivered in the UK by UK staff, but the income, profit and tax going elsewhere.

Yes, Amazon although based in Luxembourg employs nearly 3k people in the UK for it's "distribution company", but Virgin had 3.5k staff, HMV has 13k staff, and that's not counting the distribution companies supplying them like EUK who supplied Woolworths and subsequently Zavvi had 350 employees and a turnover of £1.4bn - all UK businesses employing UK staff and paying Tax on their profits.

The other area this is happening is ebooks, the bookstores are aware that the world is changing, people are buying ebooks rather than paper ones (projected to be worth £500M this year) so they are trying to change their product to meet demand. But ebooks are charged VAT at 20% unlike 0% for paper books - Amazon is based in Luxembourg so VAT is charged at the Luxembourg VAT rate on ebooks - 3.5% - convenient that, Luxembourg lowering their VAT rate on ebooks to 3.5% even when the EU told them not to drop it 5% a while back as it wasn't fair on other EU countries.

This has been addressed by the EU who have ruled that VAT on ebooks needs to be charged at the rate applicable in the country of purchase, this comes in in 2015 - so Amazon have 3 years to drive the remaining UK bookshops out, then it will be the same as with CD's and DVD's - once there's no competition and the loopholes are closed the prices go up.

My worry is not that the companies are doing anything wrong per se, just that it's starting to look like once the loopholes are closed the prices could end up back where they were and all that's been achieved is to shut down the high street businesses and move the jobs and tax on the profit elsewhere. Hopefully that's a cynical view and at that point it will come full circle and with prices aligned high street/UK business will be able to compete again, but that will be a good few years coming.

Everything is changing, unfortunately big companies are pushing it so fast the world can't keep up.

[Ciber]

It does put you off buying from Amazon TBH. Maybe I shouldn't be so in love with them!