An open letter to the boss of Amazon: Pay what you owe, or we go

12 May 2014 @ 11.04 am
| Opinion

Amazon doesn't face a very taxing time…
Amazon doesn’t face a very taxing time…

Miles On Monday

Miles Salter writes to Amazon’s managing director

Dear Christopher North –

There’s a book, available for sale on the company you are managing director of, Amazon, that is titled: Tax Avoidance – A practical guide for UK residents. I wonder if you’ve read it?

There are currently new and used copies for sale, so you could probably get one delivered in the next few days.

But maybe you don’t need to examine the contents of that book, because a few days ago we discovered that Amazon had reported vast UK sales (£4.7 billion) but paid a pittance in tax.

The total tax paid is estimated to be £9.7 million, far below the percentage expected of an ordinary worker.

The outcry against your company has been loud and vigorous, with good reason. How can a corporation that benefits so much from having a foothold in the UK get away with giving so little back?

Your firm has eight enormous warehouses in the UK, but the company makes the most of complex tax rules that mean the money from sales goes via Luxembourg. As a result Amazon pay barely any tax.

This sticks in our collective throats because the company benefits so clearly from being based in the UK.

Worst corporation

Amazon may represent the worst in corporate behaviour. It expects its workers to behave in an automaton like manner, measuring the time it takes them to complete tasks, and dishes out warnings to those who don’t keep up.

It sees off competition from smaller outfits with ruthless efficiency, and has led in part to the closure of many independent retailers in the UK in recent years – witness the demise of many small bookshops, for example.

But consumers love it because it’s easy, relatively cheap and can orders can be placed from the living room.

Why go to the trouble of heading into town? We can all browse Amazon whilst watching TV late at night, or first thing in the morning.

You recently told The Guardian that working in different countries made things tricky for Amazon.

You said that Amazon “simply couldn’t” provide its current offer if it were required to account for itself country by country.

“Imagine you come to and you purchase a pair of shoes from a fashion store,” you said.

“That pair of shoes might have been sourced from a vendor based in Italy, by a vendor management team based in Luxembourg, and those products may be stored in a warehouse in Germany.”

Hmmmm. Whilst I am sure it can’t be easy to juggle administration and finance in different countries, I think the task is probably made considerably easier by the generation of sales worth £4.7 billion.

Come on, Mr North. Don’t fob us off. People want you to be genuine, and I reckon this story isn’t going to go away just yet.

‘Refusing to pay’

On the attack: Margaret Hodge
On the attack: Margaret Hodge
On Sunday (May 11), Margaret Hodge urged you to ensure Amazon pays “a fair tax”.

Hodge, who chairs the Commons Public Accounts Committee, said that your company’s behaviour was unfair, and is encouraging people to boycott Amazon. This is refreshing, because so often it seems that politicians are in the pockets of big business.

It’s unlikely we’d hear David Cameron utter a similar message.

“It’s not on,” Hodge said last week. “Everything you get from them says on it. Every parcel you get from them says Royal Mail with a British stamp on it.

“To their customer base, they pretend to be British, yet they refuse to pay their tax. All we ask is that they pay a fair tax on their business in the UK.”

Pay what’s owed, Mr North. Till then I think I’ll hold off on being an Amazon customer. I hope others do the same

All the time, Mr North, your company is benefitting from being in these isles. You use UK roads. You use UK postal services.

You use British workers, who in turn rely on tax funded services such as the NHS, or schools, or local authority services.

Your company wouldn’t turn such a big profit if it was in Uganda, would it? Their roads are more patchy than ours. And the demand for One Direction merchandise is probably not as high.

In short, makes a vast pile of money from being based in the UK. And we, the punters, do our bit to pay for your company car.

So, for the time being at least, I think I’ll hold off on being an Amazon customer. There are other outlets for books and CDs. Perhaps I’ll try those.

I hope others do the same. Maybe that will give you something to think about.

Pay what’s owed, Mr North. Do your bit. And then relax each evening, knowing you have chipped in to the common good.

We can’t say fairer than that, now, can we?