Friday, November 16, 2012

John Lewis warns Amazon's tax avoidance 'will drive UK companies out of business'

The Government must address the "Amazon tax issue" or risk driving UK-based retailers out of business, the managing director of John Lewis has warned.

The managing director of the  John Lewis retail stores, Andy Street, at the new Cambridge store.
Andy Street said Amazon would 'out-invest' and 'out-trade' UK companies if the Government does not take action Photo: Geoff Pugh
Andy Street said Amazon would “out-invest” and “out-trade” UK companies if the Government does not take action to force the online retailer to pay tax fairly in Britain.
“There is less money to invest if you are giving 27pc of your profits to the Exchequer,” Mr Street told Sky’s Jeff Randall. “Clearly, if you are domiciled in a tax haven you’ve got much more [money]. They [Amazon] will out invest and ultimately out trade us. And that means there will not be a tax base in the UK.”
Mr Street said that both HMRC and the Treasury had to look at ensuring that money “earned in a particular country” was “taxed in that country”.

The comments come in the wake of Amazon’s showdown with MPs, who this week called the online retailer “immoral” for diverting profits to Luxembourg and demanded the company send a more “senior” executive to answer further questions. The Public Accounts Committee, led by Margaret Hodge, scolded Andrew Cecil, head of public policy at Amazon, for stonewalling the Committee with “unacceptable nonsence.”

The company has sparked outrage because despite having warehouses in the UK and employing 15,000 people, it drives all of its sales through Luxembourg. According to conservative MP Charlie Elphicke, last year Amazon’s UK sales amounted to £3.9bn but the company paid just £1.9m in tax – the equivalent of just 2.5pc of its estimated profits, based on its global operating margin.
Full story at The Telegraph

1 comment:

Mark Hubbard said...

A free man replies to John Lewis.

Don't feel bound to put this up Graham :) Have a good weekend: we're going to the Victorian festivities in Oamaru, and a winery in Kurow!