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Amazon's biggest UK division has slashed its corporation tax even as sales surge

Key Points
  • Amazon UK services receives £1.3 million credit from UK tax authorities in 2016.
  • This despite breaking £1 billion barrier in revenue.
  • Amazon says profit fall and other factors account for tax fall.
Jeff Bezos
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Amazon halved the amount of U.K. corporation tax it paid last year while more than doubling turnover during the same period.

Accounts filed by Amazon UK Services show the company was billed just £7.4 million ($9.6 mn) for 2016 compared with £15.8 mn in 2015.

And once a series of deductions had been added, Amazon UK Services actually received a £1.3 million credit from the U.K. authorities.

Amazon said in a statement: "We pay all taxes required in the UK and every country where we operate. 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."

Amazon UK Services is the company's warehouse and logistics operation that employs almost two-thirds of its 24,000 UK staff.

Last year, turnover at Amazon UK Services broke the £1 billion barrier for the first time, climbing from £946 mn in 2015 to £1.46 bn.

Profit before tax fell from £48.5m in 2015 to £24.2m in 2016.

Revenue at the UK Services division doesn't account for Amazon's U.K. retail sales income which exceeded £7.3 billion in 2016, according to U.S. filings.