UK politicians call on shoppers to boycott 'tax-avoiding' Amazon

For many of us this Christmas, Amazon will be our first - and in some cases, only - port of call when we finally get around to shopping for gifts for our loved ones. It's a natural choice, given that Amazon seems to sell just about everything we could possibly imagine, from high-quality electronics to cheap, cruddy stocking-fillers that probably won't make it to the new year before disappearing into the bin. 

But there are those who would much prefer that you didn't do your shopping at Amazon this Christmas - or indeed at any time of year. Eight Members of Parliament (MPs) in the UK have publicly called on British shoppers to avoid the online retail giant, in response to the company's controversial tax policies. 


Margaret Hodge MP, one of eight Members of Parliament calling on shoppers to boycott Amazon

The group of MPs is led by Margaret Hodge, the chair of the cross-party Public Accounts Committee, which earlier this year interrogated executives from Amazon and Google in televised sessions to question them over allegations of tax avoidance. Last December, Microsoft was also accused of avoiding £159m ($259m) in UK taxes in a single year. As CNET UK notes, last year, Amazon paid just £2.4m ($3.9m) of corporation tax in the UK last year, despite revenues of £4.3bn ($7bn) there. 

Hodge told Ethical Consumer that Amazon is a company that "aggressively avoids paying tax on the profits that they earn". She called the company's approach "morally wrong", adding that it "disadvantages every business... and therefore endangers British businesses and British jobs". 

She said that her call to boycott Amazon is not "anti-business, it's pro-fairness". Explaining that the activities of companies such as Amazon create a situation where other companies cannot compete fairly, she said: "It's hugely important that we all take a stand and damage the reputation and business of companies that deliberately avoid paying their fair share of tax to the common purse for the common good." 

She also said that "paying tax is part of the social compact. What makes us a society is that you agree to give according to your means or your profit... For big corporations to feel that they can choose whether or not to pay their fair share of tax is just wrong." 

An Amazon spokesperson told CNET that the company "pays all applicable taxes in every jurisdiction that it operates within." 

Source: Ethical Consumer via CNET UK | images via Ethical Consumer

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So big companies are using loopholes to avoid as much tax as possible and now the politicians are trying to demonize them to make themselves look better even though i'd put good money on the fact that these politicians are probably pulling the same loophole crap themselves.

If they were serious, they'd put some time and effort in to closing these loopholes, but then how would they avoid tax? Idiots.

This story cracks me up...heres a concept UK politicians, why not close the Tax loopholes these companies exploit, instead of saying boycott this because they don't pay the govt enough taxes, how about you change your system then numbnuts!

Hodge is a hypocrite.......a classic do as I say, not as I do!
Her part owned company does this as well by avoiding paying the proper amount of tax............lol maybe that's why she was picked, being such an expert in corporation tax avoidance

but then politicians would have to find something else to try to make themselves look good and gain public support. closing the loopholes is sabotaging themselves.

Amazon are not the only company avoiding tax in the UK, Starbucks is another high profile company committing acts like this. Not paying tax isn't keeping prices low, its keeping profits. I find it quite disrespectful that Amazon and another companies are doing this, because it is the smaller companies which are the ones who are going to be the hardest hit when the government brings in tougher restrictions. If you are are going to trade in different countries, they must be fair and abide by tax laws. Every person in the UK has to pay tax so what right or power does the company feel it has to overpower the law?

They are abiding by the law. We may find it immoral and unfair, but that does not make it illegal. It should come as no surprise that morality/ethics go out of the window in the name of profit. Not the end of the world, no one died, but it's the way the cookie crumbles.

Arron said,
Amazon are not the only company avoiding tax in the UK, Starbucks is another high profile company committing acts like this. Not paying tax isn't keeping prices low, its keeping profits. I find it quite disrespectful that Amazon and another companies are doing this, because it is the smaller companies which are the ones who are going to be the hardest hit when the government brings in tougher restrictions. If you are are going to trade in different countries, they must be fair and abide by tax laws. Every person in the UK has to pay tax so what right or power does the company feel it has to overpower the law?

don't forget Tesco, Google, Ebay, Apple, Vodafone, British American Tobacco, Tate & Lyle, Vedanta, Npower all pay tiny amounts of tax and all have annual profits in the billions of UKPs.

The tax adverts towards punters for cheating the taxman crack me up, a drop int he ocean to the billions of £s these corps avoid paying.....

This is where mistakes are often made. It is not possible to make profit in the billions and pay tiny amounts of tax. These companies may have revenue in the billions, but their profits tend to be much lower. They are taxed on these profits as per letter of the law.

But by avoiding taxes they can keep their prices low, this is just smart business and the free market at work.

I give a tip of the hat to the international giant Amazon for shrugging off localised European laws and a wag of the finger to UK politicians for being unable to actually get any of that sweet tax pie.

If only there was some sort of convenient global mall we could go to and browse for a gift to send and cheer up these would be robin hood politicians...

Most of my Xmas shopping this year is from amazon, and whether they pay taxes or not isn't my concern. Until there's a competitively priced alternative I'll continue to use them.

Alternatively, the Government can change the law to close loopholes?
Why not just say "any company that operates in the UK will have to pay the current VAT rate in tax at the end of each financial year" - it makes it easy to tax everyone depending on what profits they make.

the thing is if the goverment wanted to stop the avodiing paying tax they can do it easily. Why is it okay for companies to avoid paying millions, but if I dont pay £10 more than I should they will chase me for it non stop. Got a letter recently saying you might have not paid enough tax please help us, and send your P60. Yeah right like im going to do anything to pay extra.

Antaris said,
Lolwat.

Question, are they breaking the law? Hmmm, no.

Yeah I was going to say, change your laws then if you don't like how they operate within them legally

Why? They're still cheaper on most items than anywhere else. Brand new video games are about the only thing where that's not true.

On many things yes but not always. A can of Planter's Deluxe whole cashews on Amazon was 20 dollars. The exact same can was only 6 dollars on Walmart.com, it really pays to shop around.

I am buying from Amazon.The 8 politicians can go shop from the local businesses and support them themselves.

it will take a multi-national agreement to stop it, until then, they aren't breaking the law. It's called good business. You run as efficiently as possible and you try to outsell your competitors by any legal means necessary.

Being preached to about morals by some of the most moral-lacking, tax dodging individuals on the planet isn't going to gain much momentum.

Do your jobs, politicians, and make the system work, instead of building a moral bandwagon that almost no one will jump on.

Amazon started taxing last year here in California. Guess what? They are still my go-to company for most of my shopping. I'd rather deal with Amazon versus dealing with Best Buy, or dealing with open-boxed items at Fry's. $3.99 next day delivery and free 2 day delivery with my Prime account is awesome.

Paying tax online is dumb though. I didn't drive the street to 'get' my item. I didnt park my car to 'get' my item. I didn't use up any 'state' service or 'property' buying online. Pff. I wont use stupid crapazon anymore because of it. Its just idiodic. Tax is illegal anyway, against our constitution. Then they want to tax me because I used my computer? YA ok! eBay all day! Though even they are in 'talks' about taxing, I have been sending in letters trying to get that BS to not happen. TAXATION IS ILLEGAL! YOUR state/government is supposed to float on its own! If it cant, the state senate [or similar] needs to be fired. ESP if I didn't even use their roads or utilize traffic lights to buy my item. What right do they have, just because I 'live' in the state? NO!

I thought this topic was about the actual taxing on crapazon. Everyone should be joining together and fight THAT. Send in letters to your congressman, do something about it. I don't mind paying tax in store because I used the roads/etc. to get my product, but ONLINE?? What did the state do to help me get my item online? NOTHING. Ugh. THIS needs to be stopped. This WILL affect you, not some stupid 'tax-evasion'. For a $500 item, you could pay like $50-75 extra to the state...WHY?? Can I call myself California and you send me the $75 instead? That is what they are doing. Its FREE money for them. Have fun giving away money for nothing. ...this just irks me to no end. And people 'like' JHBrown, fuel the want for them to rob us. Thank you for laying the road for them.

Not to mention, NO other store online does this. Go to bestbuy.com or walmart.com or officemax.com or anywhere else. NO tax.

Edited by theslam08, Dec 6 2013, 7:11am :

What part of the constitution bans taxes? I missed that part. And while you didn't drive, the delivery guy did. The only reason online retailers got a break in sales tax was to help that industry get started. Don't get me wrong, I love not paying sales tax, but to say taxation is illegal is stupid. Taxation without representation is illegal (although seems like that still happens too). Also, you're wrong, the three stores you mention do charge sales tax. At least here in Tennessee. They have to per federal law, as they have brick and mortar stores.

People get confused about that US Constitutional issue due to all the rhetoric. The requirement was any taxes collected by the federal government had to be apportioned to the states based on the census. The 16th amendment got rid of that. It was a big power shift from the states to the fed.

All interstate mail order wasn't required to collect sales taxes for you long before the Internet. It just wasn't enough money to bother with the overhead of trying to collect it. You do owe these taxes in all cases. None of this stuff is tax free, and if you haven't been paying them, you're breaking the law. Brick and mortar also has nothing to do with it and it's linked to if you have a presence in the state.

theslam08 said,
Paying tax online is dumb though. I didn't drive the street to 'get' my item. I didnt park my car to 'get' my item. I didn't use up any 'state' service or 'property' buying online.

And the delivery service that delivered your item?

so what are those 'public service' that amazon use?

can't those politician just charge amazon for such usages of those 'public services' that amazon uses?

One example is roads - national transportation infrastructure doesn't build and maintain itself. Amazon uses roads to get goods to its 'fulfilment centers', and to get products delivered to customers. Well, at least until it has drones flying everywhere... :-P

in some countries, land-freight companies are charged on how much tonnage of goods that it delivers, the same can be applied to amazon.

no need to fuss about 'expense of public services' ...

But they pay council tax and road tax. looking in on the road here makes me think there is no money flowing there anyways. looks like third country roads ... you have better ones in east European countries

gcaw said,
One example is roads - national transportation infrastructure doesn't build and maintain itself. Amazon uses roads to get goods to its 'fulfilment centers', and to get products delivered to customers. Well, at least until it has drones flying everywhere... :-P

They don't build and maintain "themselves" (so to speak) because the government took control it and made it illegal for it to operate in any other way. Roads wasn't always a government thing. It's like the government cutting your lawn regardless of if you wanted it cut, and making it illegal for you to hire Mexicans to do so, then forcing you to give them money.

As long as Amazon is not breaking any laws, then there is no reason to be trying to do anything to them, much less promote a boycott.

I see nothing in these allegations that constitute proof that Amazon broke a law. All I see is a reference to Amazon being aggressive in trying to limit how much they pay in taxes. Oh really? Big shocker there.

I don't care if your a multi billion dollar company, or a guy making 20K a year, your going to be aggressive in trying to avoid as much taxation as possible. That means making use of any loopholes available to you within the laws.

What I get the biggest laugh about here is this notion that its our duty to pay as much in taxes as possible. This is a line we have heard a lot from various governments, including here in the US. Taxes are a necessity, but they are not 'patriotic' or a duty to our nation. If you make a tax system that contains ways for individuals or companies to pay less then the full amount, then you only have yourself to blame when they take advantage of it. Oh politicians, never willing to really fix problems.

You want to fix it? How about reforming all the tax systems, boil it all down to a simpler system without a bunch of loopholes and deductions. Going after people or companies for trying to keep as much of their own money as possible wont solve anything.

Indeed, although the MPs here didn't accuse Amazon of breaking laws - just of being 'morally wrong'. You can follow the letter of the law and still be morally reprehensible.

It is entirely legal to exploit every loophole that's been left open by useless lawmakers over successive generations of government. But is it socially responsible? Not really - and certainly not while corporations like Amazon, Google, Microsoft, Apple and thousands of others portray themselves as "good corporate citizens".

No-one is expecting companies to "pay as much in taxes as possible" - you're rather overstating your case there. But when the corporation tax is set at a certain rate, and you see companies paying an infinitesimal fraction of that amount, it may well be perfectly legal, but it's not something to be commended, or defended.

Why is it not 'socially responsible' though?

Again, they are not breaking any laws. They are accusing Amazon of being morally wrong for trying to keep as much of the money they earn as possible.

I'm really not sure why this is morally reprehensible. I'm not going to defend or commend the actions, but I'm also not going to fault Amazon or any individual from trying to hold onto money they earned within the rules that are there for anyone to make use of. I mean are we really going to make it sound like these are the bad guys for that reason? I don't think being a 'good corporate citizen' means that you must pay a base rate even though you don't have to by law.

To me its pretty simple. Individuals can get out of paying what the strict tax rate says you must pay. There are deductions and loopholes all over the place in these tax systems. Companies will also take full advantage of the rules in place. What everyone shares in common is a goal of keeping as much of what they earn as possible.

Again, the reason a company, or and individual, can get out of paying the strict tax rate is all the fault of the politicians in government. If they want to fix it, then fix it by passing laws or repealing rules. Or better yet, why not simplify these silly tax codes.

I mean really, is it 'socially responsible' for a politician to put the blame on the companies and stir up a boycott for them to cover up the fact that they could fix the issue themselves but don't?

chAos972 said,
Isn't it the government's job to fix that tax evasion? I mean, if they don't who will. O_O

Something has to be broken for it to be "fixed".

chAos972 said,
Isn't it the government's job to fix that tax evasion? I mean, if they don't who will. O_O

Evasion implies what they're doing is illegal which isn't the case - the problem is tax avoidance and the loopholes in the law which Amazon are legally entitled to take advantage of. If these politicians were genuine in their outrage I really have to ask where is their white paper regarding how the government should go about closing those loopholes.

Mr Nom Nom's said,

Evasion implies what they're doing is illegal which isn't the case

That depends on who you mean by "they". The tax is owned by the purchaser and not the seller, so it's the purchaser that's guilty of tax evasion. This is US. I don't really know the UK laws.

chAos972 said,
Isn't it the government's job to fix that tax evasion? I mean, if they don't who will. O_O

Not sure how the taxes in the UK work but I know that when people in America get all up in arms about a company not paying enough tax they dont realize that the company can choose different tax paying methods. So if they dont pay "enough" this year in like 5 years they will be "fair tax" plus what they didnt pay year 1. It all evens out. You just dont hear about a company paying the right amount of taxes ever.

Also, its not a companies fault if the government has loop holes in its tax code. They are there to make as much money as they can, like it or not. Its whats best for the stake holders (employees, share holders, etc, etc). The government should be responsible for there code.

Spicoli said,

That depends on who you mean by "they". The tax is owned by the purchaser and not the seller, so it's the purchaser that's guilty of tax evasion. This is US. I don't really know the UK laws.

That makes no sense what so ever - so if I live in the UK and purchase something from Amazon I'm therefore responsible for Amazon's tax avoidance?

Mr Nom Nom's said,

That makes no sense what so ever - so if I live in the UK and purchase something from Amazon I'm therefore responsible for Amazon's tax avoidance?

I think he is referring to sales tax. Which is different than the tax evasion thing I think. Sales take on items over like $150 or $200 you are required to pay by state laws. Or something like that.

That is referring to items bought online that DONT factor in sales tax.

Scabrat said,
I think he is referring to sales tax. Which is different than the tax evasion thing I think. Sales take on items over like $150 or $200 you are required to pay by state laws. Or something like that.

That is referring to items bought online that DONT factor in sales tax.

You still have to pay sales tax when imported into the country or sold within the country regardless of whether the company is based inside the customers country. I know where I live if I import a product over a certain value I have to pay GST on it - there is no way to escape it.

Same I almost always shop at Amazon, there are some things that they don't carry but the majority of my shopping is done through them.

You may also be shocked to know that British people aren't corporate shills. Over here it's normal to want business to pay it's fair share.

A group of people who were swindling the public out of tax money, telling people not to shop with folk who swindle them out of tax money.

Hmmm, yeh that`ll float.

RichardK said,
I am boycotting Amazon in the US because they have started charging sales tax.

Blame the state governments. Virginia has recently started doing the same, kind of a bummer really.

Yeah, they will here in Tennessee starting next month. But why would you boycott Amazon? While the federal law doesn't yet say that online retailers without physical locations have to pay sales taxes, many state laws do require them to do so. Sadly for us in TN, it's not a state law so much as our governor is the world's biggest moron.

RichardK said,
I am boycotting Amazon in the US because they have started charging sales tax.

but you STILL have to pay the tax to the state... it's up to you to pay the sales tax through your state tax returns, if you don't you are avoiding taxation which can get you in hot water if you are ever audited

Actually, in Tennessee, we don't owe the sales tax, we owe a 'Use' tax of like 2% or something like that. I didn't know that until Amazon made their deal with our brilliant governor and sent us how much we'd spent in the state.

People will typically go with the cheapest option regardless of the company's practices. British politicians are just mad that they're not getting a slice of the pie

Also, in before tea party comments.