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Home / Tim Worstall /We’d suggest that Dame Margaret, Lady Hodge, turn the autoquote machine off

We’d suggest that Dame Margaret, Lady Hodge, turn the autoquote machine off

Summary:
Apparently the Amazon subsidiary in Luxembourg has raised the ire of Dame Margaret, Lady Hodge:Margaret Hodge, a Labour MP who has long campaigned against tax avoidance, said: “It seems that Amazon’s relentless campaign of appalling tax avoidance continues. “Amazon’s revenues have soared under the pandemic while our high streets struggle, yet it continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax. These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce. But unlike smaller businesses and hard-working taxpayers, the tech giants fail to pay fairly into the common pot for the common good.There’s something almost Alf Garnett about that, dirty capitalists comin’ over ‘ere and exploitin’

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Apparently the Amazon subsidiary in Luxembourg has raised the ire of Dame Margaret, Lady Hodge:

Margaret Hodge, a Labour MP who has long campaigned against tax avoidance, said: “It seems that Amazon’s relentless campaign of appalling tax avoidance continues.

“Amazon’s revenues have soared under the pandemic while our high streets struggle, yet it continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax. These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce. But unlike smaller businesses and hard-working taxpayers, the tech giants fail to pay fairly into the common pot for the common good.

There’s something almost Alf Garnett about that, dirty capitalists comin’ over ‘ere and exploitin’ our taxes.

Except that’s not what is happening at all:

Fresh questions have been raised over Amazon’s tax planning after its latest corporate filings in Luxembourg revealed that the company collected record sales income of €44bn (£38bn) in Europe last year but did not have to pay any corporation tax to the Grand Duchy.

Accounts for Amazon EU Sarl, through which it sells products to hundreds of millions of households in the UK and across Europe, show that despite collecting record income, the Luxembourg unit made a €1.2bn loss and therefore paid no tax.

If you were to be avoiding tax by squirrelling profits away in Luxembourg then there would be, well, there’d be profits squirrelled away in Luxembourg, wouldn’t there? When in fact Amazon makes a loss there and, as we’ve seen from the accounts of the UK companies, profits here which do pay tax.

Reality being that Amazon continues to invest in expanding its business and so makes a loss. Which does seem to be what we’d like Amazon to be doing too. We consumers out here like what Amazon provides so their spending more on us being able to have more of it is producing what we want more of. The problem with this is?

Our advice to Dame Margaret, Lady Hodge, is to turn that autoquote machine off, it has become out of synchronisation with reality.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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