Pure play e-tail giant Amazon has been blasted over its tax practices after it emerged that the company paid £2.4 million in corporate taxes in 2012 despite making sales of £4.3 billion, a rate of less than 0.1 per cent.
Over the same period, the e-tailer received £2.5 million in Government grants, according to records filed at Companies House, while it continued to channel revenue to its Luxembourg subsidiary.
One grant from the EU of £1.5 million was used to build a road to its Swansea warehouse while a further grant helped fund a further warehouse in Fife.
Such figures have reawoken fears that large corporations are using loopholes in the system to avoid tax and Margaret Hodge MP, Chair of the Committee of Public Accounts, lambasted Amazon‘s practices as a “joke”.
“Companies like Amazon should pay their fair share of tax based on their economic activity in this country and the profits they make here,” Hodge told the Daily Mail.
“Its behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage.”
It is understood that, over the last decade, Amazon has paid just £6 million in corporation tax though the company argues that it operates lawfully.
An Amazon spokesperson said: “Amazon pays all applicable taxes in every jurisdiction that it operates within.
“Like many companies, Amazon has received assistance in relation to major investments in the UK.”
Amazon was called to the Public Accounts Committee last year after it emerged that the company had not paid millions in taxes in the UK and the Government looked into claims of tax avoidance.
This morning, the Committee is to hold a public evidence session with senior management from Google and Ernst 7 Young as it investigates the issue further.