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Amazon Loses $500 Million: Now, About That Tax Bill

One of the amusements of recent times has been watching the tax campaigners like Margaret, Lady Hodge, huffing and puffing about how terrible it is that Amazon doesn’t pay much tax here in the UK. And it’s true, it doesn’t. But there is actually a good reason for this: Amazon doesn’t make much in the way of profits either:

Amazon, the US retail giant, has revealed its lost nearly $500m in the past three months, the largest amount in its history.

Shares in the company dropped 11pc in after-hours trading, wiping more than $15bn off the value of the company. The company increased sales by a fifth to $20.58bn in the three months to October, but it plunged $437m into the red as it spent heavily on new projects. That figure is more than 10 times the $41m loss Amazon reported in the same period a year earlier.

We’re generally told that the solution to the way that Amazon dodges UK tax is to adopt something called “unitary taxation”. This means that we entirely ignore all the various dodges and loopholes they use internally. We simply look at their sales around the world, the profit they make around the world, and say that if 10% of sales are in one country then so are 10% of profits. A reasonable enough system you might think.

But look at what happens here when we talk about Amazon: exactly the company that the tax campaigners have been saying this rule should be applied to.

The UK is about 10% of Amazon’s sales. So, therefore, 10% of Amazon’s profits (or losses) must be applied to the UK. So, in the last 3 months Amazon has, under this system, lost $50 million in the UK. And companies that lose money in the UK do not pay profit tax in the UK.

So, Hodge and those campaigners, all of whom are screaming for Amazon to pay more tax, are really arguing that amazon shouldn’t be paying any tax at all. Rather sweet of them really, isn’t it?

Posted: 26th, October 2014 | In: Money | Comment | Comments RSS feed:RSS 2.0

Dear Margaret Hodge: Facebook just isn’t avoiding tax in the UK

Margaret Hodge MP outside No 10 Downing Street, central London, after handing in a petition - signed by more than 110,000 people - calling on internet retailer Amazon to pay their fair share of UK tax.

DEAR Lord the egregious Margaret Hodge is getting boring on this subject. She seems to ignore the manner in which every time she opens her gob on the subject of corporate tax she has to be corrected. It simply is not true that Facebook is avoiding tax in the UK:

However, those numbers are not reflected in its accounts. In common with fellow American technology leaders Google and Apple, Facebook funnels the vast majority of its income from advertisers targeting its 33 million British users through Ireland. “This is yet another example of what appears to be deliberate manipulation of accounts of economic activity to deprive the British taxpayer of a rightful tax contribution, according to the profits they make in the UK,” said Commons public accounts committee chairwoman Margaret Hodge. “I am getting fed up of this constant stream of stories and little sign of a challenge from HMRC and a strange silence from government.”

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Posted: 9th, October 2013 | In: Money, Technology, The Consumer | Comment | Comments RSS feed:RSS 2.0

Does Margaret, Lady Hodge, know anything about payday loans? Not much


DOES Margaret Hodge know what she’s talking about?

The Public Accounts Committee (PAC) has accused the watchdog of failing to properly regulate or even understand the burgeoning market. The OFT has instead been “passively waiting for complaints from customers before acting”, the MPs said.

Margaret Hodge, chairman of the PAC, lambasted the OFT’s regulatory efforts claiming it has “never given a fine to any of the 72,000 firms in this market” and has “very rarely revokes a company’s licence”,

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Posted: 3rd, June 2013 | In: Money | Comment | Comments RSS feed:RSS 2.0

Can we call Margaret Hodge a tax avoider now?

MARGARET Hodge is the Labour MP who currently chairs the Public Accounts Committee in the Commons. Yes, I know, dreary minutiae only a politics geek could enjoy.

Except, except….it’s Mrs. Hodge who last week was lambasting Google, Amazon and Starbucks for their tax avoidance. Even, at one point, going so far as to say that of course no one thought it was illegal but was it immoral?

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Posted: 20th, November 2012 | In: Money, Politicians | Comment | Comments RSS feed:RSS 2.0

Obama Is Right: There Are No Jews In Westminster And The Media

MORE on post-racial life in the WACO (World according to Obama): Jews are no longer an ethnic minority.

The Guardian wonders why last year’s Media Guardian 100 (an arbitrary list of the big players in the media) featured no ethnic minorities.

We asked a panel of experts drawn from ethnic minorities to name their 30 most important media figures.

And – get this – the panel didn’t name one Jew in the media. So much for them controlling it. But it’s not a perfect science:

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Posted: 9th, November 2008 | In: Politicians | Comments (8) | Comments RSS feed:RSS 2.0

Margaret Hodges Bites The Blairite Bullet

IN The Telegraph Tim Walker says Margaret Hodge is planning to leave the cabinet…

Your thoughts as to why she should do so now…

Posted: 27th, September 2008 | In: Broadsheets, Politicians | Comment | Comments RSS feed:RSS 2.0