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Amazon's main UK division paid no corporation tax in 2021 as profits rocketed 60%
Amazon’s main UK division paid no corporation tax in 2021, despite profits rocketing 60% to £204m.
The online retailer used the former Chancellor and now Tory leadership hopeful Rishi Sunak’s “super deduction” scheme for businesses that invest in infrastructure, by opening four new fulfilment centres.
The relief, which allows companies to offset 130% of investment spending on plants and machinery against profits for two years from April 2021, resulted in Amazon getting a rebate on its prior year tax payment of £18.3m in 2020, with nothing to pay in 2021.
Accounts to be filed at Companies House will show revenues at Amazon UK Services, which is the retailer’s warehousing facility, surged by more than £1bn last year – from £4.9bn to nearly £6.1bn. The revenue for the whole UK business was £23.19bn.
In a blog post on its economic impact in the UK for 2021, the retailer said: “The stated purpose of this capital allowance was to encourage businesses to make productivity enhancing investments and promote economic growth. Any tax reduction as a result of these capital allowances is more than made up for by the thousands of additional jobs created and the economic growth which has been stimulated by these investments.”
A spokesperson for Amazon told The Bookseller: "The government uses the taxation system to actively encourage companies to make investments in infrastructure and job creation. Last year, we invested more than £11.4bn in the UK, building four new fulfilment centres and creating more than 25,000 jobs. Our total tax contribution was £2.77bn - £648m in direct taxes and £2.13bn in indirect taxes.”
Direct taxes include employer’s national insurance contributions, business rates, corporation tax, import duties, stamp duty land tax and the digital services tax.
Amazon does not break down how much it pays in corporation tax for the UK business as a whole and says focusing on one aspect of taxation such as corporation tax “doesn’t tell the whole story”.
