We have called a boycott of Amazon over its outrageous tax avoidance since 2012.
In 2020, Amazon announced that its key UK business paid just £14.46 million in tax in 2019 – a 3% increase from the previous year, despite pre-tax profits growing by more than 35%.
We have estimated that in 2017 Amazon’s tax avoidance from profit shifting alone cost the UK £52million.
Amazon promised in 2015 that it would begin to pay a fairer rate of tax. Yet the online giant – which has a market value of over $1 trillion – has refused to keep its promise, at a time when public finances are more vital than ever before.
So, where does Amazon’s money go?
Tax avoidance often relies on shuffling money between countries. In 2015, Amazon said that it would start to book retail sales made in the UK through its UK subsidiary, meaning that it would pay tax in proportion to the sales made in the country. Yet, in 2020, the company was again accused of registering its UK sales in Luxembourg, known to be a tax haven.
In fact, Amazon’s Luxembourg subsidiary currently makes a loss, meaning that it not only doesn’t pay tax but “is generating enormous tax reliefs that can be used in the future to ensure that little or no tax continues to be paid,” according to Paul Monaghan, CEO of the Fair Tax Mark.
Indeed, Amazon doesn’t just shift money in space – it also shifts it through time. Amazon invests everything into dominating the market, thereby monopolising industries while keeping its profits low. This way, it can defer paying taxes until another time.
Besides the monopoly issues, this poses massive problems for countries in need of taxes now: even if Amazon were to pay huge amounts somewhere down the line, taxes are needed to fund vital public services now.
Paul Monaghan, CEO of Fair Tax Mark:
Amazon is growing its market domination across the globe on the back of income that is largely untaxed, allowing it to unfairly undercut local businesses that take a more responsible approach. Contrived financial arrangements lie at the heart of Amazon’s success.
Amazon doesn’t even publish details of most of its UK profits or tax payments. The conglomerate is concealing its tax practices – making them all the harder to address.
What can consumers do?
Tax avoidance needs to be addressed at a global level; but consumers can also have a huge influence on companies not paying their fair share.
You can use your spending power to send Amazon a clear message.
- Take action now and pledge to boycott Amazon.
- Let them know you are doing it by emailing or tweeting them on our company profile page.
- Shop with more ethical alternatives
Alternatives to Amazon
The time is right to focus on a company whose whole business model appears to be based on not paying its fair share of tax. And an action of this kind will also be food for thought for the many other consumer-facing brands whose tax minimisation strategies have strayed into plainly unreasonable territory.
Either way, next time you’re about to click ‘buy now’ on the Amazon website, just think about the nurse that will be sacked or the school roof that won’t be fixed with the few pence you’re about to save.Alternative to Amazon series
Support for the Amazon Boycott
Thousands of people have joined our campaign against Amazon. We even took our campaign to parliament and found an array of support from MPs passionate about tackling tax avoidance.
Mark Constantine, Lush co-founder:
“The internet is a freedom tool which we all like to use. But Amazon have diminished it through their dominance and tax avoidance. They have taken a good thing and made it ugly.”
Call for a windfall tax on big tech companies
As citizens, we can also push for much needed reform of the tax system.
Coronavirus has shown the vital need for regulatory reform: tech companies have raked in enormous profits, while continuing to refuse to pay their fair share.
We are calling on the UK government to increase digital sales taxes to 10% as a post-COVID emergency action until international agreement on curbing tax avoidance has been reached. This means charging tech companies a 10% tax on sales in a country rather than profits – meaning they can’t shift their taxed income elsewhere.
We’re asking consumers:
- To write to your political representatives asking them to increase digital sales taxes.
- To contact tech companies asking them to publicly justify continued use of tax avoidance schemes in a post-COVID world.
The cost of tackling the pandemic in the UK alone will be somewhere in the region of £300 billion. Silicon Valley mega-corporations, from Facebook and Google to Amazon and Netflix, are amongst the most high-profile avoiders of corporation tax.
The digital sales tax would ensure that they help support the rebuilding of our public services – on which they also rely – while making UK sales.