Amazon's UK Arm Receives £7.6m Tax Credit Amid Soaring Profits

The Unexpected Tax Credit

Amazon's main division in the UK, Amazon UK Services, was handed a £7.6m tax credit last year by HM Revenue and Customs. This comes as a surprise given that the company's profits surged by more than a quarter to £355m.

Profit Surge and Tax Adjustments

Amazon UK Services, which employs 66,000 staff, reported a 26.5% rise in pre-tax profits to £355m and an 11% year-on-year increase in revenues to £8.2bn. The company owed £9.1m in 'current tax' last year, but this figure was reduced by £16.7m due to 'adjustments in respect of previous periods', resulting in the £7.6m credit for 2025.

Investment in UK Infrastructure

The £16.7m adjustment relates to relief offered under a government programme that rewards investment in UK infrastructure. Amazon UK spent £5.2bn building and expanding fulfilment centres, corporate offices, machinery, equipment, and datacentres last year.

Tax Rate and Transparency Concerns

The Fair Tax Foundation calculated that the actual combined UK corporation tax bill paid by Amazon's big five operations was just £39m last year, equating to a tax rate of just 7.1%. The foundation's chief executive, Paul Monaghan, expressed concerns about Amazon's tax practices, calling for greater transparency.

Amazon's Response and Future Outlook

Amazon UK said that across its entire business, it is one of the biggest taxpayers in the country, paying more than £1.3bn in UK taxes of all kinds last year. The company stated that it paid more than £1.3bn in direct taxes, including corporation tax, an increase of more than 20% compared to the year before.