Saturday, April 07, 2012

Tim Waterstone warns Amazon tax avoidance could kill off bookshops

Founder of UK books chain says Amazon tax planning fits pattern of 'rude, contemptuous, arrogant' online company

Amazon's distribution warehouse near Milton Keynes. Entrepreneur Tim Waterstone has joined criticism of the online company's tax planning. Photograph: Sarah Lee for the Guardian
Tim Waterstone, the founder of the eponymous bookstores, has warned that Amazon's "grotesquely unfair" avoidance of millions of pounds of UK taxes could lead to the death of high street bookshops.
Waterstone said Amazon's tax avoidance reflects the company's "rude, contemptuous, arrogant and subversive" attitude to the rest of the book trade.
The entrepreneur is the latest in a string of leading figures in the publishing industry to speak out against Amazon since the Guardian reported this week that the country's biggest online retailer paid no corporation tax on profits generated by last year's UK sales of £3.3bn.
Waterstone, who opened his first store on Old Brompton Road, London, in 1982 before selling the business to his former employer WH Smith, said many in the publishing industry are "questioning the spirit and the ethos of the company's style".
Amazon sells nearly one in four books in Britain, but the UK operation avoids tax as the ownership of the main business was transferred to a Luxembourg company in 2006.
Waterstone said Amazon's "highly creative worldwide tax planning" was grotesquely unfair. "The rest of us pay our taxes," he has witten in a Guardian comment piece. "It all somehow fits the pattern of Amazon's dealing with others over the years; rude, contemptuous, arrogant and subversive would be a standard reaction."
He said Amazon had powered its domination of the industry by single mindedly and ruthlessly focusing on "absolutely rock bottom pricing", which was putting other book shops out of business.
Well-known book chains, including Borders and Ottakar's, have already disappeared from the high street, and independent stores are struggling after hundreds have closed over the past few years.
Waterstone said Amazon was "insultingly and aggressively" telling consumers to go and browse at other book shops on the high street and "then come home and buy them from us … at a deep, deep discount".
"And f**k Harrods or whoever it is for their trouble. More fool them. And more fool Waterstones. Go and browse through all the books there, in Waterstones, or Daunt's, or your lovely Topping stores, then put them back on the tables (fingered and soiled) and order those you want from us [Amazon]. Why pay more? Why worry about the consequences?"
HM Revenue & Customs (HMRC) is investigating the tax arrangements. Amazon's tax affairs are also being investigated in the US, China, Germany, France, Japan and Luxembourg.
Amazon declined to discuss its tax affairs, but said in a statement to the Guardian this week: "Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages, dispatching products to all 27 countries in the EU. We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation."
Full story at The Guardian.

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