BRITAIN’S LARGEST online retailer Amazon is being investigated by HM Revenue & Customs (HMRC) for possible tax avoidance.
HMRC refused to confirm the investigation but Amazon is being investigated in the US, China, Germany, France, Japan and Luxembourg.
The online retailer explains it avoids paying tax because Amazon.co.uk is owned by Luxembourg-based Amazon EU Sarl. The UK operation is a delivery company only, with all payments from the UK to the business transferred to Luxembourg.
The latest 2010 accounts for Amazon EU Sarl show the Luxembourg office employed just 134 people, but generated turnover of €7.5bn (£6.5bn). In the same year, the UK operation employed 2,265 people and reported a turnover of just £147m. According to the SEC filings, UK sales that year were between £2.3bn and £3.2bn. Amazon in the US has earned an average 3.5% profit margin over the past three years.
Amazon switched ownership from the UK to Luxembourg and in an SEC filing in 2006 said; “establishing our European headquarters in Luxembourg, which we expect will benefit our effective tax rate over time”.
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government
Kevin Reed discusses the worrying findings from HMRC on micro-businesses' problems handling Real-Time Information, and the latest thoughts on how accountants can provide value-added services