Encouraging Small Business

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Make Amazon pay UK Corporation Tax?

I have just received an invitation to sign an online petition demanding that Amazon pay UK Corporation Tax. 

I have every sympathy with bookshops trying to compete against Amazon and I would dearly like to see the survival (and, indeed, revival) of independent booksellers in the UK. However, I believe that the petition is fundamentally wrong. All companies have an obligation to their shareholders to maximise their profits which means also taking all legal steps to minimise their tax bills. 

The present unfortunate situation with regard to many international companies is the result of massive incompetence by our government and the EU over many years. If our government wants international companies to pay a reasonable amount of UK Corporation Tax, it should reduce the tax rate, as Ireland did, to make it more attractive to pay tax in the UK than elsewhere. This would benefit all companies in the UK and encourage inward investment, whereas populist calls for Amazon and others to pay more tax without any legal basis will discourage inward investment. Alternatively, it should press for international agreement on a better way of assessing tax in relation to economic activity, although I suspect that this is never really going to work.

The other problem with Amazon, Google and eBay is that the competition authorities have sat on their hands while they built international monopolies. As far as I can see, this is almost impossible to undo.

As a small publisher, I have mixed feelings about Amazon and about bookshops. If you sell books through the Amazon Advantage programme, you are obliged to give Amazon 60% discount. Outrageous though this is (especially when you remember that the publisher has to pay royalties, typesetting, editing, production, delivery and other costs), it is often more attractive than trying to sell through bookshops which often expect equally high discounts and sometimes take years (quite literally) to pay you, although there are many honourable exceptions.

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