Amazon pays £492 million tax on revenues of £20.63 billion in 2020

Amazon said it handed £492 million directly to the UK taxman last year and invested more than £1.6 billion in its British operations amid a pandemic-fuelled surge in online shopping.

The online retail giant said the direct tax bill increased by more than two-thirds from the £293 million paid in 2019, with employer taxes accounting for the bulk of the rise as it boosted its UK workforce.

The tax bill followed total revenues of £20.63 billion for the group in the UK during 2020, up from £13.73 billion in 2019.

Figures for Amazon UK services recently filed with Companies House are set to show pre-tax profits leaping 25% to £128 million on revenues for that division of £4.85 billion.

Direct taxes paid for the UK-registered division – which provides warehousing and delivery services for the firm’s UK retail operations – stood at £18.3 million in 2020, up from £14.5 million.

Controversy surrounds Amazon and its UK tax bill, as the group officially reports its British retail sales through Luxembourg, with Amazon UK services representing only a small part of the wider UK operation.

But the technology titan stressed its UK retail sales, related expenses, profits and taxes are recorded in the UK and therefore reported, and paid, directly to HM Revenue & Customs.

It added that it also paid £1.06 billion in indirect taxes last year, taking its total UK tax contribution to £1.55 billion, up from £1.14 billion in 2019.

This was driven by the VAT on its increased sales and higher employee taxes as its staff numbers rose.

Amazon’s UK workforce now stands at more than 55,000 after another 10,000 jobs have been created so far this year, with more staff being recruited to meet soaring demand.

It announced last week that it was adding another 2,000 UK jobs on top of this as part of a big expansion.

The business is hiring new staff for its offices in London and Manchester, as well as “tech hubs” in Cambridge and Edinburgh, and it is looking for staff across its UK fulfilment centres.

But the hiring spree comes amid a mounting recruitment crisis in the UK, with Amazon resorting to offering new warehouse recruits a £1,000 joining bonus as it tries to attract staff.

It is also offering a £50 weekly attendance bonus at a number of sites for staff who have 100% attendance for all shifts to help the group in the run-up to Christmas.

Amazon said it had made investment in its UK warehouses and delivery stations, including the workforce, of more than £32 billion since 2010.

Research compiled for the group by the macroeconomic consultancy Keystone estimates that Amazon has supported 164,000 job opportunities through companies in its supply chain last year.

It also claims to support another 175,000 UK positions through small and medium-sized businesses that sell their products through Amazon.

Amazon said: “We are proud of the significant economic contribution we are making to the UK economy.

“Looking ahead, we know that the UK remains full of opportunity and we continue to be excited by the potential to continue to invest, create jobs, develop talent and have a positive impact in communities across the country.”