Amazon corporation tax up as sales continue to soar

Amazon UK services paid £18.3m in corporation tax last year, up around 26% from £14.5m the year before, as sales soared by 64%.

Pretax profits at the arm, which includes warehouse and operation but not retail, rose in the year to December 2020 to £128m, while sales soared by 64% to £4.9bn.

The company said it handed £492m directly to the UK taxman last year, up from £293m in 2019, with employer taxes taking up the largest proportion of these. Increases in 2020 were largely driven by headcount growth, the expansion of Amazon's real estate footprint and sales growth. 

In a lengthy blogpost, the retailer argued that focusing on one aspect of taxation, such as corporation tax doesn’t tell the whole story.  According to Amazon, it paid an additional £1.1bn, up from £854m in 2019, through indirect charges.

"Increases during 2020 were largely driven by net VAT due to an increase in sales, and an increase in employee taxes as the result of headcount growth and wage increases," the company said. 

In 2020, the total revenues of Amazon’s activities in the UK were £20.6bn, up from £13.7bn, and the company said it invested more than £1.6bn in infrastructure, up from £690m.

From 1st January, Amazon has been charging, collecting and remitting UK VAT on physical goods transactions to UK customers made by overseas sellers on Amazon's online stores.

The post concluded: "We are proud of the significant economic contribution we are making to the UK economy. Looking ahead, we know that the UK remains full of opportunity and we continue to be excited by the potential to continue to invest, create jobs, develop talent and have a positive impact in communities across the country."