How Much Tax Does Amazon Pay in the UK?

Amazon's tax contributions in the UK have long been a topic of discussion and debate. As one of the largest companies operating globally, Amazon's tax practices have drawn attention due to its significant presence in the UK market. In 2022, Amazon paid £781 million in direct taxes, up from £648 million in the previous year. This figure includes corporation tax, business rates, and employer National Insurance contributions, but the total contributions Amazon makes to the UK economy are much larger when factoring in indirect taxes.

In total, Amazon's contributions to the UK tax system exceeded £3.6 billion in 2022, when indirect taxes, such as VAT, are included. This represents a marked increase from the £2.7 billion total contribution in the previous year, reflecting the company's growing footprint and expanding operations within the UK.

Key Tax Contributions:

• Direct Taxes: £781 million (corporation tax, business rates, employer NICs)

• Total Contributions: Over £3.6 billion (including indirect taxes like VAT)

Despite this large tax contribution, there remains public scrutiny around Amazon's corporation tax payments relative to its UK revenue, particularly because of how multinational corporations can structure their businesses and profits globally.

How Much Does Amazon Make a Day in the UK?

Amazon's daily earnings in the UK are difficult to pinpoint precisely, but its total revenue for 2022 was £24 billion in the UK alone. Breaking this down, Amazon makes around £65.75 million a day in UK revenue, showcasing the massive scale of its operations. The company has grown significantly, particularly during the pandemic, as more consumers turned to online shopping, further increasing Amazon’s UK earnings.

How Many People Does Amazon Employ?

As of 2022, Amazon employed over 75,000 people in the UK across a variety of roles, including warehouse staff, delivery drivers, office workers, and technology developers. This figure is up from 55,000 in 2021, illustrating Amazon's rapid expansion in the UK job market. The company has over 100 operational sites, including warehouses and offices.

Employment in Numbers:

• 2022: Over 75,000 employees in the UK

• 2021: 55,000 employees

Amazon's UK Operations and Investments

Amazon has invested heavily in the UK, establishing numerous fulfilment centres, distribution sites, and corporate offices. This investment is evident in the company’s workforce growth and its influence on the logistics and e-commerce sectors. Additionally, Amazon has been expanding its cloud services division, Amazon Web Services (AWS), in the UK, contributing further to its overall economic impact.

Why Is Amazon’s Corporation Tax So Low?

The debate over Amazon’s corporation tax payments stems from the complexities of international tax laws and how multinational corporations are taxed. Amazon, like many large tech companies, structures its business in a way that allows it to operate with relatively low tax liabilities in specific jurisdictions. One of the key reasons Amazon’s corporation tax appears low relative to its UK revenue is due to the fact that its profits are often allocated to regions with lower tax rates.

Amazon's UK operation, like many companies, also claims expenses that reduce its taxable profits, such as investments in infrastructure, innovation, and logistics.

How Does Amazon Calculate Tax in the UK?

Amazon, like other UK companies, pays corporation tax on its profits, not on its revenues. Corporation tax in the UK is currently set at 19%, though it will rise to 25% for companies with profits over £250,000 in April 2023. Amazon calculates tax based on its UK operations, which include its physical assets, employees, and local business activities.

Additionally, Amazon pays employer National Insurance Contributions (NICs), business rates for its properties, and indirectly contributes to the tax system through VAT collection from customers.

What Has Been the Public Response?

Amazon’s tax contributions have been scrutinized by the media, politicians, and the public. The general concern is that Amazon's global tax structures allow the company to reduce its UK tax burden while benefiting from a large market share in the country. This has led to calls for tax reform, especially regarding how digital and multinational businesses are taxed.

Conclusion

Amazon’s UK tax contributions are significant, with the company paying hundreds of millions in direct taxes and billions in total contributions when VAT and other indirect taxes are included. However, ongoing discussions about the fairness of its corporation tax payments reflect broader concerns about multinational companies operating in multiple tax jurisdictions. As Amazon continues to expand its UK operations, these issues are likely to remain at the forefront of the tax debate.