Amazon should refund £10m Scottish Government handout say Greens

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Green MSPs are urging the Scottish Government to recall its grant funding of Amazon UK following news that the company paid just £2.4 million in tax in the last financial year on UK sales of £4.2 billion.

A briefing provided to MSPs visiting Amazon’s Dunfermline centre earlier this year showed that the Scottish Government has offered up to £10.6m to the company in funding, far more than the £2.4m paid by the company in corporation tax in 2012/13.

Amazon pays such low taxes compared to sales because the company registers its profits as earned in Luxembourg.

Speaking to the BBC, tax analyst George Godber from Matterly Asset Management said that the onus was on the UK Government to change taxation rules, as companies like Amazon will use any legal means they can find in order to reduce their tax bill. 

Mr Godber said:

“We love to attack Amazon, but if they’ve operated within the laws and rules and regulations, then they’ve not done anything wrong. It is the laws and regulations that are at fault.”

Although company taxes are a reserved matter for the Westminster Parliament, Alison Johnstone, Scottish Green MSP said that there were other ways in which the Scottish Government could take steps to ensure that companies like Amazon make a fair contribution in taxes.  Ms Johnstone has also previously highlighted Amazon’s use of so-called zero-hours contracts, which do not guarantee staff any income at all but require them to be available for work whenever the company calls them.

The Greens want to see the public procurement system reformed so that companies’ tax record is taken into account before public funds are given out.

Ms Johnstone said:

“Amazon clearly have absolutely no intention of playing fair when paying tax but are happy to take millions from the public purse in Scotland. The latest revelations should prompt the Scottish Government to urgently end its handouts and demand a complete refund.

“It is quite incredible that Scottish Ministers still think that writing big cheques to Amazon is a good use of public money. That lost tax income and grant funding could completely transform the small business sector, providing secure jobs to more people. Amazon are shameless but the Scottish Government must take a stand.

“We need far stricter rules on companies getting public money so that their record on tax or use of zero-hours contracts can be taken into account. Public money should be used to support the high standards we want more of in Scotland.”