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Amazon under fire for paying just £11.9m in tax

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By John Glenday, Reporter

June 25, 2015 | 1 min read

A spotlight has been thrust on Amazon’s aggressive tax avoidance strategies once more after the internet retailer reported paying just £11.9m in tax to the exchequer despite UK sales rising by more than 14 per cent to hit £5.3bn.

The discrepancy arises by way of Amazon’s insistence on routing its UK business through a subsidiary in Luxembourg, allowing the business to claim that British sales are fulfilled there rather than Britain and enabling it to evade UK tax.

Amazon.co.uk meanwhile is described as merely providing ‘fulfillment and corporate support services’ to the Luxembourg business with a turnover of just £679m.

Long promised reforms to the global tax system are still being drawn up with a view to outlawing such practices but chancellor George Osborne announced the imposition of a punitive 25 per cent tax on companies found to be manipulating their accounts to dodge tax.

In light of this Amazon recently announced that it would operate a taxable branch in the UK but it continues to operate controversial accounting techniques designed to minimise liabilities.

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