HMRC will notice a jump in corporation tax paid by Amazon soon enough, as the online retailer is finally booking its sales through the UK.
The company is the first to succumb to pressure on tax avoidance, which many tech firms have been accused of doing in recent years.
£5.3bn of Amazon’s worldwide sales had come from Britain, but over an 11-year period the online store had booked all of these transactions in Luxembourg.
However, with chancellor George Osborne’s new diverted profits tax (aka the ‘Google tax’) now in effect, Amazon appears to have rethought its approach in order to avoid a 25% tax on those who were found to be artificially routing profits overseas.
A spokesperson from Amazon confirmed the move to The Guardian, saying: “[We are] now recording retail sales made to customers in the UK through the UK branch. Previously, these sales were recorded in Luxembourg.”
Amazon will also begin booking sales in Germany, Italy and Spain too.
Google is another company that has paid little tax in the UK, leading to the company being branded “devious” and “unethical”.
Meanwhile, Facebook avoided paying UK corporation tax for the second year running in October by declaring its taxes in Ireland.
