Rishi Sunak’s “super deduction” may force Amazon to wipe out the bill: corporate taxes on online giants may be reduced to zero, campaign participants warn
- Online retail giant UK sales surged 51% last year to £ 19.4bn
- The warehousing division paid £ 6.3 million in tax in 2019, despite sales of £ 3 billion.
- However, the campaign group says Amazon can completely eliminate its tax obligations.
- This policy allows businesses to reduce taxes by 25p for every £ 1 spent on new equipment.
The small amount that Amazon pays for corporate tax is Rishi SunakNew “super deduction”, campaign participants said yesterday.
Amazon’s UK sales surged 51% last year to £ 19.4bn. Its warehousing division, Amazon UK Services, paid £ 6.3 million in tax in 2019, despite recording sales of £ 3 billion.
However, campaign participants say the company can completely eliminate its tax obligations.
Super deductions allow businesses to reduce taxes by 25p for every £ 1 spent on new equipment. George Turner of campaign group TaxWatch said it would be profitable for companies such as Amazon, whose pandemic sales surged.
The small amount Amazon pays for corporate tax could be wiped out by Rishi Sunak’s new “super deduction,” campaign participants said yesterday (file photo).
He added: “It is doubtful that Amazon’s tax cuts today are the best use of public funds.”
Sir Sicca, a professor of accounting, said: “The deduction only justifies tax avoidance by major tech companies.”
Amazon declined to comment. Claims that you have to pay all UK taxes.
Paul Monaghan of the Fair Tax Mark campaign said the tax cut jackpot could be even bigger for Amazon if the government’s proposal to provide relief related to research funding and employee sharing schemes is also pursued.
He added: “This tax cut may wipe out any remaining corporate tax payments that Amazon may have seen.
“Companies like Amazon don’t need this kind of allowance to drive growth. This will backfire.”
Under the super-deduction announced in Wednesday’s budget, businesses can deduct 130 percent of their taxable income from investing in new equipment.
This means that a company that spends £ 10 million on machinery could deduct £ 13 million from its taxable income.
Under the super-deduction announced on Wednesday’s budget, businesses can deduct 130 percent of their taxable income from the cost of investing in new equipment.
If the current corporate tax rate is 19%, this means a tax savings of nearly £ 2.5 million.
Amazon has spent much more on new equipment in recent years. In short, with relief, the savings can be even greater.
According to Taxwatch’s analysis, Amazon UK Services Ltd invested £ 162 million in new equipment, and if super-deductions were available in 2019, the company could save £ 211 million from taxable income. must.
The company reported a pre-tax profit of approximately £ 102m. This means that the UK tax paid has been reduced from £ 6.3 million to zero.
In 2018, we spent an additional £ 238m on such equipment. This is also the amount that wipes out taxable income.
Campaign participants warn that Rishi Sunak’s “super deduction” could wipe out corporate tax bills on Amazon
SourceCampaign participants warn that Rishi Sunak’s “super deduction” could wipe out corporate tax bills on Amazon