Amazon’s key UK business paid just £3.8m more corporation tax last year than in 2019, even as sales increased by £1.89bn. Accounts filed at Companies House this week show that the corporation tax contribution of Amazon UK Services – the group’s warehouse and logistics operation, thought to employ the majority of the group’s UK workforce – was £18.3m in the year to December 2020, up 26% from £14.5m a year before. Profits at the division rose by a quarter over the same period to £128m, while sales soared by 64% to £4.85bn. That performance helped boost Amazon’s total revenues in the UK, from retail, logistics and IT services, to £20.63bn during 2020, approximately double the takings of Marks & Spencer and up slightly more than 50% from £13.73bn a year before. The company, which has made its founder and outgoing chief executive, Jeff Bezos, a fortune of more than $200bn, tried to fend off accusations of tax underpayment by issuing a statement that said its UK business as a whole paid out £492m in “direct taxes” last year, up from £293m a year before. That figure includes employer’s national insurance, business rates, stamp duty and corporation tax. The company did not break out its total corporation tax bill, but at least half of the “direct taxes” figure is thought to be accounted for by national insurance and business rates. The group also said it invested £1.6bn in the UK, more than double the £690m a year spent before, as the group extended its operations to meet high demand during the pandemic. Investments include 11 on-site solar power schemes to help run its facilities, and a 350MW windfarm project off the coast of Scotland. Amazon now employs more than 55,000 people in the UK, including 10,000 jobs created this year, with more staff being recruited to meet soaring demand. Amid a recruitment crisis across the UK, Amazon has resorted to offering new warehouse recruits a £1,000 joining bonus in an attempt to attract staff. The company said in a statement: “We are proud of the significant economic contribution we are making to the UK economy. Looking ahead, we know that the UK remains full of opportunity and we continue to be excited by the potential to continue to invest, create jobs, develop talent and have a positive impact in communities across the country.” Paul Monaghan, head of the Fair Tax Mark campaign group, described the company’s figures as “more smoke and mirrors from Amazon, who are still refusing to disclose exactly how much total profit they make in the UK, and how much tax they pay on this”. He continued: “Much of their UK income continues to be shunted to Luxembourg, where there is a ‘loss-making’ subsidiary that is not only not paying tax, but is generating enormous tax reliefs that can be used in the future to ensure that little or no tax continues to be paid. Amazon is growing its market domination across the globe on the back of income that is largely untaxed – allowing it to unfairly undercut local businesses that take a more responsible approach.” Amazon officially reports its British retail sales through Luxembourg, with Amazon UK services representing only a small part of the wider UK operation. Fresh questions were raised over Amazon’s tax planning this spring 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.