Tax

Amazon UK paid only 3% more tax on profits of 35% in 2019

Amazon UK paid just 3% more tax in 2019, compared with a 35% increase in profits it recorded during the year.

According to The Guardian, Amazon UK Services, which forms its warehouse and logistics operation in the country, paid £14.46m in corporation tax last year, up from £14.3m.

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However, pre-tax profits rose to almost £102m during 2019 , with revenues up 29% to around £3bn. Amazon said government incentives related to its investment in infrastructure resulted in an offset to its tax bill.

Earlier this year, Amazon reported a massive surge in profits in its Q2 results, as it revealed that net income doubled from $2.6bn (£1.9bn) to $5.2bn (£3.9bn), despite the impact of Covid-19.

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It comes after it reported that net sales increased by 40% to $88.9bn (£67.6bn) in the second quarter, compared with $63.4 (£48.2bn) the previous year.

Revenue from Amazon Web Services (AWS) also increased by 29% to $10.81bn (£8.2bn) which it attributed to customers using AWS to “lessen the impact of the Covid-19 crisis on families, communities, and businesses”.

Amazon added that it incurred costs of $4bn (£3bn) in its incremental Covid-19 related initiatives to “help keep employees safe, provide additional compensation to employees and delivery partners, and deliver products to customers.”

Accountancy Today has contacted Amazon for comment.

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