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Amazon set to avoid corporation tax in UK for 2 more years

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TrueBlueTerrier
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Amazon set to avoid corporation tax in UK for 2 more years

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https://apex-insight.com/amazon-set-to- ... ore-years/

Thanks to emergency tax reliefs given out by the former UK Chancellor Rishi Sunak, Amazon is set to pay no tax to the HMRC for at least two more years, despite the firm likely to have been making these investments without the tax breaks.

The Fair Tax Foundation has shown in a report that Amazon has claimed more than £800m in capital allowances in 2021, half a billion pounds more than they did in 2020.

According to the report the value of these allowances was boosted in a large part due to the ‘super deduction’ scheme for businesses that invest in infrastructure that was introduced by Sunak when he was chancellor.

The Guardian newspaper reports that from 1st April 21 until 31 March 23, companies are allowed to claim allowances equivalent to 30% more than the value of investment in new plant and machinery and up to half the value of further investments in technology that forms parts of buildings – that includes for example, air conditioning.

For the year to December 2021, Amazon enjoyed a £75 million discount on its tax bill, resulting in a tax bill of £0 that year. Further it has set aside almost £66m against its tax bill for an estimated £250 million of trading losses from 2021. Should it spend a similar sum for warehousing equipment this year, it would have to make profits of more than £600 million in the UK before it paid any corporation tax this year or next.

Paul Monaghan, the chief executive of the Fair Tax Foundation said: “Even before the super-deductions, Amazon paid little corporation tax in the UK, in part because the bulk of their UK income is still booked in Luxembourg.

“However, we now have a situation where Amazon UK Services are not only not paying tax, but they are being handed huge tax credits for investment that almost certainly would have happened anyway. This will ensure that tax payments are not only wiped out last year, but this year and future years as well.”
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