Amazon's UK tax bill last year was £2.8m less than 2016 despite nearly doubling its profits, its accounts have revealed.

Amazon UK Services Limited, which runs the fulfilment centres to process, package and post deliveries, incurred £4.6m in UK corporation tax in 2017 while the year before had a figure of £7.4m.

And the online retail superpower only paid £1.7m in tax after deferring £2.9m.

It made an operating profit of nearly £80m in the UK, a major increase from £48m in 2016.

During 2017 Amazon UK Services had an average of 19,749 employees - more than two-thirds of Amazon's 27,000-strong UK workforce.


The company defended paying less tax while making millions more, with a spokesman telling Sky News it paid all the tax it was required to "in the UK and every country where we operate".

He said the numbers were so stark due to establishing a "local country branch" in 2015 "to ensure we had the best business structure to serve our customers going forward".

Image: Jeff Bezos founded Amazon in 1994

"Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment," he added.

"We've invested over £9.3bn in the UK since 2010 including last year opening a new head office in London alongside development centres in Cambridge and London.

"This year we plan to create 2,500 permanent jobs across the country in research and development, our head office, customer service and fulfilment centres, to bring our total workforce in the UK to over 27,500."

The company has reduced its tax liability by providing shares as awards to all permanent Amazon employees - which are deducted under standard UK tax rules, a spokesman said.

Entry level permanent associates received an average of more than £3,000 from their shares last year, with Amazon's share price increasing by 84% over the past two years.

This has meant staff share-based payments rose from £37m in 2016 to nearly £55m last year.

Earlier this week Amazon reported record international quarterly profits of £1.98bn - about 12 times more for the three months to 30 June compared to the same period the year before.