Amazon's main UK division has paid corporation tax for the first time in four years, following the end of a tax break introduced by Rishi Sunak when he was chancellor.

Amazon UK Services, which employs over half of the group's UK workforce, reported paying £18.7 million in "current tax" for 2023, primarily believed to be corporation tax. This marks a significant shift from the £7.8 million tax credit received in 2022 and the £1.1 million credit in 2021, which were a result of Sunak's "super-deduction" scheme allowing companies to offset 130 per cent of investment spending against profits.

The e-commerce giant's UK operations generated sales of £27 billion in 2023, up from £24 billion the previous year. This figure is more than double the UK sales of Marks & Spencer, though Amazon's tax contribution remains comparatively lower.

Paul Monaghan, chief executive officer of the Fair Tax Foundation, called for greater transparency from Amazon regarding its UK tax affairs. He stated, "They want to know how much profit they actually account for in the UK from the £27 billion of revenue they collect here. One can only surmise that the lack of transparency is connected to the sizeable chunk of UK revenue that is still shunted to the historically 'loss-making' subsidiary in Luxembourg."

Amazon's total tax contribution in the UK, including business rates and national insurance contributions, reached £932 million in 2023, up from £781 million in 2022. The company claims to be among the top 10 business rates contributors in the country.

An Amazon spokesperson said, "As we continue to invest in our UK operations and workforce, we help fund public services and vital infrastructure, and create jobs throughout the country." The company reported investing £12 billion in the UK last year, including over £1.5 billion in infrastructure.

Despite its growing sales, Amazon's UK workforce remained steady at 75,000 after years of expansion. The company implemented a hiring freeze in early 2023 and closed three older UK warehouses, affecting 1,200 jobs.

The increase in corporation tax payments is likely due to reduced capital spending as Amazon slows its warehouse expansion, coupled with fewer government tax breaks and lower historical losses to offset against tax.

Amazon's cloud computing arm, Amazon Web Services (AWS), has announced plans to invest £8 billion over the next five years in UK datacentres, signalling ongoing commitment to its British operations despite recent efficiency measures.

As the retail landscape continues to evolve, Amazon's tax contributions and investment strategies in the UK will likely remain under scrutiny from both industry analysts and competitors in the high street retail sector.

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