Online retail giant Amazon’s UK tax bill fell last year despite a near-trebling of profits.
Amazon UK Services bill was £4.6m, down from £7.4m a year ago, accounts show.
But the division, which operates the warehouse “fulfilment centres”, was able to defer £2.9 million.
It meant that the company has paid £1.7m in tax for now, even though pre-tax profits jumped from £24.3m to £72.3m. Amazon said it paid all the taxes required by UK law.
One reason for the lower tax bill was a rise in share-based payments for staff.
Amazon said that full-time warehouse staff on average have received shares worth more than £1,000 a year.
As Amazon’s share price has risen so sharply, these are often worth more when they are sold to the open stock market. That sale price is the one on which the tax bill, for both the company and the individual, is based.
Amazon UK Services, the division that runs the warehouses that process, package and post deliveries to UK customers, paid out £54.8 million in share awards, compared with £36.7 million in 2016. Turnover was £1.98 billion, up from £1.43 million.
It employs more than two-thirds of the 27,000-strong UK workforce.
An Amazon UK Services spokesman said it paid all the tax it was required to “in the UK and every country where we operate”.
“Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment.”
It was a similar picture at another of Amazon’s UK businesses.
Amazon Web Services UK’s accounts, also filed this week, showed taxes fell to £155,000 from £404,000, but profits were up from £2.7 million to £5 million.
Amazon Web Services, which provides cloud computing storage for a range of high-profile clients, including the UK’s tax collector, HMRC, gave share awards to staff of £11.8 million, compared with £5.8 million in 2016.
Frontpage November 1, 2017