November 20, 2012

Newspapers turn on Amazon


WH Smith: paid £10m in tax last year

“You depend on the services that come out of the tax you pay, the ability to get your goods around on the roads . . .  and you’re not putting enough tax into our economy.”

And thusly and so did British politician Margaret Hodge lay the (verbal if not legislative) smack down on Amazon’s Director of Public Policy Andrew Cecil last week.

As MobyLives reported, the UK branches of Amazon, Google and Starbucks were called on by a parliamentary select committee to explain their pitiful tax contributions against gargantuan earnings, and put on a disgusting collective show of worming out of it. As many commentators have pointed out, their behaviour is unethical but currently legal, and it’ll take international legislation against tax havens like Luxembourg to change that.

Meanwhile more and more British newspapers are getting on board to encourage readers to vote with their pockets: the Bookseller reports that Labour-supporting tabloid the Daily Mirror has just published an article called ‘Fairer Trading: Your essential guide on how to dodge the tax avoiders,’ in which it advises readers to shop at WH Smith instead of Amazon this Christmas. The Guardian has been shouting out about Amazon’s terrible practices for some time now, but it might surprise some to see the Daily Mail — not a natural champion of fairness — doing its own digging to uncover Amazon’s wily accounting. Their article makes for interesting reading, suggesting that Amazon is rattled by the recent inquiries:

Amazon pays £6.4 million in tax in Luxembourg on its profits of more than £250 million, a rate of just  2.5 per cent, a sum negotiated with the country’s authorities. It paid only £1.9 million in UK corporation tax in 2011.

But the good times may be ending. Tax authorities across Europe  are investigating Amazon, and it could end up with a tax bill of up to £1 billion.

Amazon EU Sarl’s accounts say: ‘It is reasonably possible that the company will receive tax assessments from various tax authorities in the future that may or may not ultimately result in payments of additional taxes.’

Tax advisers say the statement goes well beyond what would normally appear in company documents and that it suggests the company is already facing questions from tax authorities around Europe.



Ellie Robins is an editor at Melville House. Previously, she was managing editor of Hesperus Press.