Amazon Decides To Start Paying Tax In the UK

Mark Wilson sends word that Amazon will begin paying corporate taxes on profits made in the UK. The company had previously been recording most of its UK sales as being in Luxembourg, which let them avoid the higher taxes in the UK. But at the end of last year, UK regulators decided they were losing too much tax revenue because of this practice, so they began implementing legislation that would impose a 25% tax on corporations routing their profits elsewhere. Amazon is the first large corporation to make the change, and it's expected to put pressure on Google, Microsoft, Apple, and others to do the same.

Comments

Mixed Result

[Going_Digital]

The UK government have done a good job of convincing the british public that big corporations not paying tax is something the evil killing the economy. Conveniently re-directing the blame from the true causes of the problem the incompetence and inefficiency of the government itself. Who do the british public think is going to pay for all this extra money given to the government? Corporates are not a free source of extra revenue for governments, the money has got to come from somewhere. The companies work entirely on numbers, if the british public think the fat cats and the institutional investors are going to give up their income so that it can be given to a government they are deluded. The company will find other ways to re-balance things.

Some prices will go up so we the british public just end up giving the government more cash via corporate taxation. Less investment will be made in things like advertising in the UK as the budget would be better spent in countries where larger returns can be made on those costs. Staff wages will be under greater scrutiny and so fewer people will be employed and those that remain will be pushed harder.

The end result the british public pay more for things and the government has to use this new tax income to support more unemployed and low income people.

What the british government should be doing is asking how it can make Britain more competitive by reducing complexity in government and therefore reducing the tax burden. If Britain had similar tax rates to the other countries, companies would not have to try moving their income to other countries to maximise their profits.

The only win here is that small businesses who are unable to move money around the world to avoid tax will be on a slightly more even footing with the large corporates if they all have to pay the same tax.