How Amazon Got Away with Halving its UK Tax Bill

Amazon managed to halve its corporation tax bill in the UK by paying its employees partially in shares.
An Amazon warehouse in Madrid, Spain. (Álvaro Ibáñez/Creative Commons)

Amazon is in the news yet again — this time for halving its corporation tax bill paid to HMRC. Despite a turnover in 2016 of £1.46 billion, which represents a doubling over the previous year, Amazon paid just £7.4 million in corporation tax.

The company managed to half the previous year’s payment by making the clever choice to compensate its UK employees, in part, with shares in the company. Because the company’s value rose during the year, the value of the shares rose. In turn, the expense of employee compensation rose and left Amazon with a significantly lower profit than it posted in the previous year, despite a doubling in turnover.

According to our research, documented in our corporate welfare database, Amazon has received nearly £20 million in grants from the UK government over the last decade.

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