Amazon Inc. is sustaining its market status as the reigning monarch of online American shopping despite of facing tough competition from local rivals. In recent times, the business of the company has grown substantially. It is not only about the online marketplace business but also for all other business categories that it has expanded into, such as Amazon Prime.
The online retail giant’s biggest markets are in the United States and United Kingdom. According to sources, the latter contributes a lot towards the company’s revenues and it has been a great revenue stream over the years. Sources suggest that the corporation generated massive revenues from the UK sales last year, which were estimated at $8.3 billion (£5.3 billion) after noticing an increase by 14% in 2014.
However, the online retailer paid very less in corporate taxes and thus received various handouts in government grants. The accounts filed in the US explained that the company’s sales in the United Kingdom were $7.3 billion (£4.49 billion) in 2013 and further rose by a staggering 14% in the following year.
Furthermore, the UK financial accounts of the company that were filed at the Companies House showcased the turnover for Amazon UK to be under $1068.7 million (£680 million) as the year ended on December 31, 2014. The UK turnover was also up by a substantial amount, as it was under $707 million (£450 million) in 2013.
One source stated, “The reason for the difference is because Amazon claims its Luxembourg European headquarters sells products to British customers through the Amazon.co.uk limited company and the UK figures instead refer to payments for its warehousing, distribution and administrative work, such as negotiating purchasing deals with book publishers, but not sales.”
Amazon’s UK financial accounts further showed an operating profit of $55.9 million (£35.6 million) in 2014 after experiencing a jump of nearly 95%. It was only $28.6 million (£18.2 million) in year before. In the same period, the company received a note in government grants of $2.83 million (£1.8 million) in 2014, which was nearly 12% to 13% higher than 2013.
It has been an ongoing practice from Amazon that they are paying less corporate taxes in recent years. UK sales of Amazon managed to make $8.3 billion and it will be liable to pay corporate taxes of nearly $18.7 million (£11.9 million).
The Guardian reported, “The accounts for Amazon.co.uk Limited show the UK business is continuing its rapid expansion. The document shows that 7,722 staff in warehouse, procurement, software and other roles were employed during the year, up from 5,912 in 2013.”
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