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What Amazon's taxes mean for wine merchants

Do you pay your taxes? All your taxes? Every little bit of tax that you're legally obliged to pay?

Perhaps you are paying on a regular basis a variety of employee's NICs, income tax, CGT...

If you are a tuition fees-era graduate you're paying off your student loan via PAYE, and if it looks like a tax, moves like a tax and quacks like a tax, it probably is a tax, so they say (they do now).

If you're a corporation (you clever sausage) or run a corporation (or, more humbly, a little wine business) you'll be paying the likes of employer's NICs, corporation tax, VAT, CGT and all sorts of myriad bits and pieces that big clever corporations with big clever accountants get away without paying.


International corporations such as eBay, Starbucks and Amazon are being hauled over hot coals for siphoning this, that and t'other business activities here, there and everywhere. Or Luxembourg.

You see, my home office in Richmond is a frappuccino's throw from eBay's UK offices. They have four walls and an idyllic Thames view. There is a shiny plaque with their name on it. To the untrained eye, eBay exists on these shores.

To the trained eye, it doesn't. I can see the building, but it's all a big ruse.  Frightfully clever really.

Despite appearances, eBay actually exists in the picturesque Grand Duchy of Luxembourg. So does Amazon.

Apparently Amazon pays tax in this country at a rate of just 2.5 per cent. On the surface, thanks to the complex warren that is the UK tax regime, this is entirely legal, though Parliament has requested that Amazon prove it.

Let's just assume (as I expect is the case) that Amazon is not breaking any rules. They are acting precisely as any sensible person should and only paying what they have to by law. Would you say their situation is fair or, to risk an oft-misapplied word, ethical?

Good question. John Lewis' managing director, Andy Street, doesn't think so. The John Lewis Partnership is the pinstripe pin-up of corporate social responsibility and the 99 per cent's favourite capitalist, so naturally Mr Street's opinion matters.

"There is less money to invest if you are giving 27 per cent of your profits to the Exchequer. Clearly, if you are domiciled in a tax haven you've got much more [money]. They [Amazon] will out invest and ultimately out trade us. And that means there will not be a tax base in the UK."

We shouldn't be holding a candle for John Lewis quite yet. Only this morning they sent me an e-mail proudly announcing "We've lowered our prices". The never-knowingly-undersold co-operative is in rude health and has been for some years and might even be in line for a Christmas No 1.

Yet Mr Street has a point, and one that online wine retailers ought to take heed of. It won't have gone unnoticed that Amazon is having another stab at selling wine in the US. A source suggests the UK is in the pipeline.

Good wine is a relatively pricey product. As are good books. Anyone who regularly visits independent wine merchants or book shops knows that. Amazon has undercut the bricks & mortar bookseller because it has been able to invest those hard-hidden revenues in exceptional supply chains and logistics, keeping costs - and therefore prices - low.

Sourcing wine is a risky and costly process. Size matters. It is how supermarkets and other bulk-buyers like Direct Wines or Majestic can sell cheap wine even cheaper. Those companies are good - often very good - at marketing and distributing their wares. But they aren't even in Amazon's league.

Comment 1

Jerrydow on

Знаете ли вы?
Старейшую в России организацию реставраторов велено было выселить и уплотнить.
Планета — глазное яблоко может быть пригодна для жизни в одних районах и непригодна в других.
Бывший наркокурьер, став премьер-министром Юкона, принимал законы против наркомании и наркоторговли.
Кустурица пропустил получение «Золотой ветви» в Каннах, так как любит друзей больше, чем церемонии награждения.
Врач на карантине спел созданную для фильма песню Высоцкого «Давно смолкли залпы орудий».

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