Alex Salmond and Amazon have ‘kicked Scots in teeth’ over £10m handout

Salmond with Allan Lyall, Amazon's vice'president of European operations. Picture: Julie Bull
Salmond with Allan Lyall, Amazon's vice'president of European operations. Picture: Julie Bull
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ALEX Salmond has been accused of delivering a “kick in the teeth” to Scottish business after it emerged that online sales giant Amazon has paid no corporation tax in the UK despite receiving more than £10 million in SNP government handouts.

Documents have revealed that Amazon is under investigation in the UK for its tax affairs, with the firm transferring the ownership of the main business to a Luxembourg company – a legal arrangement it admits hands it a “favourable effective tax rate”.

The revelations came after the First Minister boasted about what he described as a “historic” deal that saw Amazon set up a distribution centre in Dunfermline, alongside its customer call centre in Edinburgh.

One of the SNP’s key policy demands is for Westminster to hand Holyrood the power to set corporation tax. However, asked by The Scotsman yesterday if a company with sales figures of £3.3 billion last year, that has avoided paying corporation in the UK for three years, was the sort of company the SNP wants in an independent Scotland, a spokesman for the First Minister refused to answer.

Last night, opposition parties seized on Amazon’s tax status to claim that the company would continue to avoid paying corporation tax in an independent Scotland.

Submissions from parent company to US regulators showed that the firm admitted that some of its subsidiaries “are or may be subject to examination by these particular tax authorities” in the UK, as well as in China, Germany, Japan and Luxembourg.

Amazon was also revealed to have avoided paying corporation tax over three years on UK sales of more than £7.6bn, according to the US regulator.

The Scottish Government defended Amazon’s investment in Scotland as having a “very positive impact” and claimed that the firm’s presence north of the Border would create up to 2,000 jobs full and part-time jobs.

However, Scottish Labour’s finance spokesman, Ken Macintosh, called on Mr Salmond to look at withholding any future financial backing from Amazon after the Scottish Government previously subsidised the firm’s investment with £10.6 million of taxpayer’s cash.

Mr Salmond was also heavily criticised yesterday for “using public money to grab headlines” by Hugh Andrew, managing director of the publisher Birlinn Ltd and a LibDem supporter.

He said: “Scottish businesses have been given a kick in the teeth by a government that claims to represents Scotland. The Scottish Government seems to want to give more than £10m to Amazon, that doesn’t even pay taxes here, rather than support indigenous Scottish firms.

“It’s using public money to grab headlines, but with no strategic thinking about what economic benefit there will be.”

A Scottish Government spokeswoman said: “This is a matter between HMRC and the company.”

HMRC would not say whether it was investigating Amazon.