You don’t know me(*), but I used to be a customer of yours. I say “used to be” because I am no more, nor shall I be again. I have today closed my Amazon account (and I must say that you do not make that process very easy).
You may be aware that the UK, in common with many other economies, is currently going through a rather tough recession. Indeed, our Chancellor of the Exchequer, one George Gideon Oliver Osborne MP (salary c. £145,000, estimated personal fortune of around £4 million from a family trust), is finding the economic situation in the UK so dire that he has been forced to introduce measures to cap benefits to some of the most disadvantaged people in our country. In bringing this action, he has said that it was about “being fair to the person who leaves home every morning to go out to work and sees their neighbour still asleep, living a life on benefits… we have to have a welfare system that is fair to the working people who pay for it”. Personally, I think that increasing taxation on those companies and individuals who can afford it would be a better idea, but hey, that’s just me.
The benefits cap will apparently save some £1.43bn a year by 2014-15. One of our major charities has calculated that this saving to the exchequer will cost jobless families with two children, who are already living on the breadline, some £430 per annum.
“So what has this to do with me?” And “Why are you telling me this?” you may ask.
Simple. You have arranged Amazon’s corporate structure to minimise the tax paid on economic activity in the UK.
Since moving ownership of the UK operation to Luxembourg in 2006, the UK operation has been classed as an “order fulfilment’ business”, a delivery organisation. That has enabled you to avoid paying any UK corporation tax on turnover in the UK estimated at £3.3bn last year alone.
I recognise that this is perfectly legal, and that as a public company you are obliged to minimise liabilities so that you can maximise income for your shareholders, but as Margaret Hodge, the chair of the UK Parliamentary Public Accounts Committee said recently:
“Global corporations with huge operations in the UK generating significant amounts of income are getting away with paying
little or no corporation tax here. This is an insult to British business and individuals who pay their fair share.
“The inescapable conclusion is that multinationals are using structures and exploiting current tax legislation to move offshore
profits that are clearly generated from economic activity in the UK,”
Ms Hodge also seemed less than impressed with your director of public policy, Andrew Cecil. Perhaps you should have a word with him.
Now since I have contributed for some time to the income on which you avoid paying UK taxation, I decided to check just how much I had contributed. Astonishingly, I seem to have spent over £1700 with you over the past few years, Indeed in 2011 alone I spent nearly £500. That is quite a lot of CDs and books. And £500 is more than the sum which is about to be taken from the families on benefits described above. Of course, my contribution alone, even were it taxed correctly, would not do much to help our hard pressed Chancellor of the Exchequer. But if lots of people like me, who can afford to spend £500 per annum on what a person on benefits might see as unaffordable luxuries, were to stop spending that money with you and instead spend it with companies which do contribute their fair share to UK taxation, it might help a little, don’t you think?
So I have decided to do exactly that.
Goodbye and Merry Christmas.
(Oh and BTW, I have deregistered the Kindle. Not that I ever bought anything on it from you anyway.)
(*) Actually, you do know quite a bit about me. And more than I am comfortable about. But I was somewhat reassured some time ago when you apparently got me very wrong.