Amazon slammed after paying just 3.45% of UK turnover in tax - after raking in £27billion

Online heavyweight Amazon saw its UK turnover jump by £3billion last year while the amount it paid in 'direct' taxes rose by just £151million

Amazon has been accused of paying “a relative pittance” in tax as the online giant revealed the huge scale of its UK business.

The US heavyweight said it raked in £27billion in revenues last year, a jump of £3billion from 2022. Bosses boasted that it paid £932million in “direct taxes”, including business rates and corporation tax. Yet that equates to just 3.45% of its turnover last year. Andy Prendergast, national secretary at the GMB union, said: “Amazon rakes in billions from UK customers, yet pays a relative pittance back in tax thanks to financial chicanery. It’s an affront to the British public.”

The latest figures were disclosed by Amazon as it fought previous criticism of its tax affairs. A blog from the company says it is the sixth biggest taxpayer in the UK. It also claims it pays the second biggest amount of tax of any retailer, after Tesco. However, those includes both direct and indirect taxes - for instance VAT that companies collect on before of the Treasury.

Amazon - which benefits from a wave of taxpayer funded contracts - stubbornly refused to say how much profit it made here. The £27billion of revenues includes everything from the Amazon.com shopping website to Amazon Web Services, its booming cloud computing arm.

However, most of the details for those two large parts of the group are not revealed, as the money flows through Amazon’s Luxembourg arm and back to the UK. One big part of the business where the numbers are published is Amazon UK Services, which runs its fulfilment centres. Its revenues rose from £6.56billion to £6.88billion, with profits up from £221.9million to £250.7million. On those profits, it paid £18.7m in corporation tax. That is a rate of 7.4% when the UK’s standard rate for the tax is 25%.

Amazon said the rate was less because it was able to offset investments. Paul Monaghan, chief executive at the Fair Tax Foundation: “Amazon are once again tactically releasing their total tax contribution calculation to distract attention away from the pitifully low levels of corporation tax that have been contributed by Amazon UK Services over recent years. The public are not interested in how much VAT Amazon has collected and passed on to the Government.

“They want to know how much corporation tax they pay in the UK. They want to know how much profit they actually account for in the UK from the £27billion of revenue they collect here. One can only surmise that the lack of transparency is connected to the sizeable chunk of UK revenue that is still shunted to the historically “loss-making” subsidiary in Luxembourg.”

The disclosure comes amid pressure on online giants to pay more in business rates to help the struggling high street. Labour has pledged to “level the playing field” through a reform of business rates. And Prime Minister Sir Keir Starmer, on taking office, vowed “the broadest shoulders should bear the heaviest burden”. It comes as Labour is preparing to announce spending cuts in next month’s Budget after being left with a £22billion black hole in the public finances by the Tories.

The GMB is fighting Amazon over union recognition and claims - denied by the firm - about the treatment of warehouse workers. Mr Prendergast said: “This is a company which not only trousers £1billion in public sector contracts last year and puts a huge strain on the health service because of the terrible way it treats workers - yet refuses to pay back it’s fair share. Meanwhile it refuses to recognise workers’ union and faces a legal challenge over unlawful pressure on workers. The Government needs to make sure the employment rights bills stops this appalling corporate delinquency.”

Amazon said it invested £12billion in the UK last year, with a £10billion boost to the economy. It added that its total tax contribution - both direct and indirect - rose from £3.6billion to £4.3billion.