This article is more than 1 year old

This article is more than 1 year old

HM Revenue & Customs spent £11m to use Amazon’s web-hosting service last year, more than six times the £1.7m it received in corporation tax from Amazon’s main UK business, according to a new report.

The UK tax authority was the second-biggest spender on Amazon services among central government departments, falling just behind the Home Office which spent nearly £16m last year, according to a report published by the GMB trade union.

Central government spent a total of £45.5m last year with the US ecommerce group, including £4m from the Department for Work and Pensions, at least in part for hosting elements of the Universal Credit system, the new figures show.

The contracts were awarded shortly after Amazon almost halved its UK corporation tax bill to £4.5m in 2017 from £7.4m in 2016 on profits of £72m declared through its Amazon UK Services subsidiary. After deferring £2.9m of tax, it paid only £1.7m for the year.

Tim Roache, general secretary of the GMB, which is campaigning for recognition at Amazon’s UK warehouses, said: “Amazon are taking us for mugs. They must quite literally be laughing all the way to the bank.”

The GMB claims that workers at Amazon’s giant warehouses are under pressure to hit targets for items picked over long shifts, contributing to pain and injuries.

Amazon, which has 17 warehouses in the UK and employs 27,500 workers in Britain, has said the allegations are “false and unsubstantiated”.

Amazon said it was “proud of our safety record” and that according to Health & Safety Executive (HSE) figures, Amazon has more than 40% fewer injuries on average than other transportation and warehousing companies in the UK.

However, this claim is disputed by GMB, which has called on Amazon to publish the HSE reports in question and confirm the average number of people that work at its warehouses, including agency staff and employees.

Jack Dromey, the shadow pensions minister, said he had asked Amazon to agree to a joint health and safety audit with the GMB and had not received a reply.

“If Amazon’s working practices are as safe as they claim, why will they not agree to undertake a joint health and safety audit with the union? It is the Health & Safety Executive’s public duty to investigate Amazon and protect the health and safety of its workers.”

A government spokesperson said procurement decisions, including contracts with Amazon Web Services (AWS) – which provides the infrastructure behind websites – were based on “value for the taxpayer, capability, security and reliability of service”.

They said: “We also make sure that large businesses, like all other taxpayers, pay all the taxes due under UK law – there are no special deals and we don’t settle for less.”

Amazon said that the UK government spent less than 1% of its annual IT budget on its services and it had been selected as a provider because it was cheaper than other options.

An AWS spokesperson said: “The report from the GMB is misleading. Here are the facts. In line with the Treasury’s own guidance, public bodies have a responsibility to ensure that the services they procure from the private sector represent good value for money to the taxpayer, and that’s what they’ve found with AWS. Government departments using AWS are seeing a 40% to 60% cost saving. They could choose more expensive or less reliable options, but that would be a disservice to their constituents.”

The spokesperson added that using AWS also helped support a “vast ecosystem” of small and medium-sized IT businesses in the UK that offered products and services that worked in tandem with AWS.

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But the contracts with Amazon follow controversy about a close relationship between the government and the US tech giant.

Liam Maxwell, the government’s former top tech adviser who had promoted a procurement policy that favoured cloud-based services such as Amazon’s, left the Cabinet Office in October to become director of international government transformation for AWS, the tech company’s cloud services arm.

Another senior government official, Alex Holmes, who was at one time the chief operating officer of the UK’s government data service, was also poached to work at the same Amazon division last month.