30 October 2017

london tax public sector ukfastBritain is lagging behind. We’re struggling when it comes to schools, hospitals, public services and the like. We simply don’t have enough money to cover it, no matter how much tax we all seem to pay.

British businesses are stepping up to the plate to help out; CSR is more prevalent than ever. We’re even going to the extent of launching a school to help raise digital education standards. Everyone is doing what they can to help.

That’s why I was so incredulous to read that Amazon Web Services (AWS) paid only £404,000 in tax on £53 million UK revenue. The retail arm paid £17m UK tax on an astonishing £20bn revenue.

It’s hard to believe that AWS have only turned over £53m in the UK when rumours are abound of customers paying a million a month. And when they’ve been saying that the cloud arm is now stronger than the retail arm.

If you did basic sums based on an assumed 20% margin, that should mean a profit of £8bn and a tax bill that should land at around the £2bn mark, surely? And that’s just one year that the government could have missed out on £1.983bn in tax. In one year. Imagine that over a decade.

Now add in the other multinationals that structure their tax this way. There is no wonder that our public services are struggling to keep pace.

We need to stop the flood of millions of pounds going off shore.

Insult to tax injury

It adds insult to injury when the Home Office’s Chief digital and data officer joins Amazon in the midst of multi-million pound deals between the government and AWS!

According to the Times, ‘The Home Office reportedly had paid the US company more than £1.2 million in the 18 months before Mr Driskell, 42, left last November. Three months later it awarded Amazon Web Services a two-year contract worth £4.8 million under which it will move its immigration data from an external provider to an “in-house AWS solution”.’

The Times report there are concerns that Driskell failed to follow protocol and notify the Home Office, or to seek approval, for his move to AWS but the extent of his involvement in the deals is currently unclear.

It is certainly hard for the public to have faith in the procurement process of these huge deals and incredibly sad to read when such big strides had been made to open the doors for UK SMEs to be able to pitch for public sector tenders.

 

Back to Blog

Comments