Amazon's main UK arm, Amazon UK Services, received a £7.6 million tax credit from HM Revenue and Customs last year, even as profits at the retail and streaming giant surged by more than a quarter to £355 million. The division, which employs 66,000 of the company's 75,000 UK staff, reported owing £9.1 million in current tax for 2025. However, this figure was reduced by £16.7 million due to adjustments related to previous periods, resulting in the tax credit.
Tax Relief Linked to Infrastructure Investment
The £16.7 million adjustment stems from a government programme that rewards investment in UK infrastructure. Amazon UK spent £5.2 billion building and expanding fulfilment centres, corporate offices, machinery, equipment, and datacentres last year. The company opened a new fulfilment centre in Hull, developed a state-of-the-art site in Northampton, and expanded its footprint in London and Swansea, creating thousands of jobs.
Amazon UK Services reported a 26.5% rise in pre-tax profits to £355 million and an 11% year-on-year increase in revenues to £8.2 billion. A spokesperson said: "Amazon UK Services is only one part of our business operations in the UK. Over the past year, we have delivered on our £40 billion investment plan."
Overall UK Revenues and Tax Contributions
Amazon reports financial results for 20 UK-registered businesses. Filings from Amazon US show total UK revenues of approximately £32 billion. Half of these revenues come from five divisions: Amazon UK Services, Prime Video, online advertising, datacentre operations, and payment processing. Combined pre-tax profits for these five arms jumped from £455 million in 2024 to £555 million last year, according to the Fair Tax Foundation (FTF). However, their total current tax bill halved from £126 million to £63 million, with only £39 million going to the UK exchequer due to revenues from non-UK business activities.
Criticism from Fair Tax Foundation
Paul Monaghan, chief executive of the FTF, criticised Amazon's tax practices: "In the UK, Amazon enjoyed a great year when it comes to paying low or little corporate income tax on its profits. It equates to a tax rate of just 7.1%. How on earth can other retailers compete with hard-wired systematic tax avoidance such as this?"
Amazon UK countered that across its entire business, it is one of the biggest taxpayers in the country. Last month, it announced paying more than £1.3 billion in total UK taxes in 2025, including employer national insurance contributions, business rates, and the digital services tax. However, this figure does not break down corporation tax separately. The company noted that its total tax contribution rose to more than £6.5 billion, placing it among the top five taxpayers in the UK.
Revenue Booking Through Luxembourg
The other half of Amazon's £32 billion UK revenues is booked through its European base in Luxembourg, Amazon EU Sarl, which also handles income from Belgium, France, Germany, Ireland, Italy, the Netherlands, Poland, and Spain. That entity reported €91.9 billion (£79.3 billion) in income last year and paid €63.1 million in tax. Monaghan said: "A massive proportion of Amazon's UK income is still being booked through Luxembourg. Surely the time has come for Amazon to come clean on exactly how much income, profit and corporation tax they pay in the UK and every other country."
