Amazon needs to be careful here. While they appear to be obeying the law UK population has the concept of "taking the piss" and Amazon is, clearly, taking the piss here.
They must avoid any discussion of VAT, because that is a tax paid by customers not Amazon.
Amazon makes use of UK resources and takes the benefit from the UK infrastructure.
The UK coverage is concentrating on "fairness". We expect people to avoid paying some tax. We don't care that companies do not pay the highest rate of tax theoretically possible. But we do expect a company to understand what a "fair rate" is and to pay something like that.
£5m paid on £4bn is not a fair rate, and is seen as taking the piss.
As the article points out, corporation tax is paid on profits, not on turnover - it's entirely possible that despite huge turnover they aren't actually making much money and therefore aren't due to pay much tax.
Of course, on the other hand they might be up to all kinds of "tax planning" shenanigans but simply saying they are due to pay more tax based on their turnover is making an overly simplistic argument.
But the shenanigans is to move as much profit out of the UK to Luxembourg, thus they only made £28m profit in UK.
So, legally they're fine, but moving the profit put of the UK while having a UK website selling products to UK customers from UK warehouses is seen as shady.
Maybe we'll end up with a European wide corporation tax?
I am not sure I understand your point about VAT. Regardless of who pays the tax in a technical sense, the government still make 20% from non-exempt purchases. Do consumers really want to give even more of a purchase to the government?
The public are not going to boycott the vibrant and dynamic marketplace that Amazon has created. They are boycotting the stagnant British High Street.
When Starbucks was being criticised for tax avoidance they mentioned the amount of VAT they handed over, and the amount of income tax that they paid.
But VAT is something that the customer pays, it is iust gathered by Starbucks. And income tax is something that the employee pays, and that is just collected by Starbucks.
By mentioning those two taxes they pointed out that other people were correctly paying taxes without avoidance shennanigans, and that Starbucks wasn't.
Amazon is in a better position than Starbucks because the setup is not so weird. Starbucks has a complicated system of selling very expensive roasted beans to itself which reduces profits in one part of the company - UK Starbucks makes very little profit - and increasing profit in another part of the company (which happens to be located in a low tax region).
Amazon needs to be careful here. While they appear to be obeying the law UK population has the concept of "taking the piss" and Amazon is, clearly, taking the piss here.
They must avoid any discussion of VAT, because that is a tax paid by customers not Amazon.
Amazon makes use of UK resources and takes the benefit from the UK infrastructure.
The UK coverage is concentrating on "fairness". We expect people to avoid paying some tax. We don't care that companies do not pay the highest rate of tax theoretically possible. But we do expect a company to understand what a "fair rate" is and to pay something like that.
£5m paid on £4bn is not a fair rate, and is seen as taking the piss.