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UK.gov cloud fave Amazon comes under fire for tax bill
Margaret Hodge calls for boycott. So where does that leave Whitehall?
Analysis Amazon - whose AWS business has been increasingly drumming up biz with the UK government - has once again come under fire for its tax arrangements in the Blighty.
According to its Companies House filing, the firm’s corporation tax halved in 2016 to just £7.4m, on sales of £1.4bn - prompting calls from Margaret Hodge MP, former chair of the Parliamentary Accountants Committee to boycott the company.
Hodge, who had been vocal critic of companies' tax arrangements, described the revelations as "outrageous." She said: "It is a scandal. They are deliberately manipulating the way they do their business for no other purpose than to avoid tax.
"I hope people take a leaf out of my book and stop using Amazon. I don’t use them at all and I would urge everyone to do the same. If we stop using Amazon then they may understand how angry their customers are."
Amazon said: "We pay all taxes required in the UK and every country where we operate. Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment. We’ve invested over £6.4bn in the UK since 2010."
Meanwhile, AWS is becoming increasingly popular with UK government departments. Now that AWS has two data centres in the UK, many public sector organisations are increasingly considering a move to its cloudy service.
Liam Maxwell, the government’s National Technology Advisor, praised the move, saying the UK now has a competitive market "to deliver cloud services onshore with the scale of AWS. meaning that companies and organizations can benefit from scalable, pay-as-you-go enterprise compute services.
"In the public sector, the effect on user experience, project delivery timescales, and costs will be marked.”
The Home Office is currently using an external cloud provider and is intending to move the platform to an in-house Amazon Web Services (AWS) solution, said the firm in a tender notice.
The Driver and Vehicle Licensing Agency and Ministry of Justice are also customers.
The Register understands that many other departments are considering taking a similar route.
Current chair of the Public Accounts Committee Meg Hillier has said governments are always "one step behind" tech firms in tracking tax.
Last year Google's £130m settlement with HMRC – for 10 years of back taxes – came under fire by the Public Accounts Committee.
The committee concluded it was not possible to judge whether the £130m back-taxes deal - for monies owed since 2005 and which took six years to agree - was a fair deal for taxpayers. ®