He needs it as down-payment on his yacht.

From The Independent:

In the latest setback to European Union efforts to tackle corporate tax avoidance, a court on Wednesday annulled a ruling by the European Commission that a tax deal between the Luxembourg government and Amazon amounted to illegal state support.

The European Commission ordered the U.S. online retailer in 2017 to pay around 250 million euros ($300 million) in back taxes to Luxembourg. But judges at the EU's General Court said the European Commission didn't prove “to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group."

If I understand correctly, Amazon will get a refund of the $300 million.

Also from The Independent:

Jeff Bezos, Amazon founder and the world’s richest man, will reportedly soon be the owner of a mega-yacht he bought for $500 million, almost double the price he paid to buy the Washington Post newspaper in 2013.

While the details of the vessel have largely been kept under wrap, the 417-foot superyacht is so massive that it has a yacht of its own, along with a helipad, reported Bloomberg.

Amazon's move to New York

From The Guardian:

Amazon said on Friday it will open offices in New York City’s Hudson Yards neighborhood in 2021 to house its consumer and advertising teams, marking its most substantial expansion in the city since the reversal.

The move comes 10 months after the company cancelled plans for a headquarters in Queens after extensive backlash from residents and politicians, including Ocasio-Cortez.

They had objected to the nearly $3bn in financial incentives the city and state had offered Amazon for the construction of the headquarters.

Ms Ocasio-Cortez ('AOC' to her friends) has given herself a well deserved pat on the back for calling this one right.

Amazon Prime Days

They spent a lot of money advertising their Prime Days, which appear to be 15 and 16 July.

15 and 16 clearly aren't prime numbers, so that's a bad start.

If you write the date and month the English way, 157 and 167 are prime numbers (hooray, the world makes sense again) but if you write them the American way as 715 and 716 they are clearly not prime (bugger).

There are plenty of consecutive prime dates using the English format in January, March, July, September and November (apart from "2" and "5", all prime numbers end in 1,3,7 or 9).

But the only pairs of consecutive dates which are prime using the American format, are:
2/29 (in a leap year) - 3/1;
3/31 - 4/1.
12/31 - 1/1.

(You can't have consecutive primes in any calendar month using American format because one of them will be even, so you are restricted to the last day of a month with 29 or 31 days, followed by the first day of next month.)

I couldn't find any consecutive dates which are both prime using English format and American format.

Just sayin'.

Oh the irony...

Emailed in by Lola, a video on how Amazon is buying up vacant shopping centres, the ones that went out of business partly because of online shopping ( or 'glorified mail order' as I call it, to put it in context), and using them as warehouses/distribution centres, and presumably collection centres for people in a hurry.
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Also emailed in by Lola, from The Telegraph:

The perilous state of Sir Philip Green’s retail empire has been laid bare in a 312-page tome sent to landlords as the former “king of the high street” pleads with them to help save Arcadia from going bust.

The document reveals that Arcadia’s earnings have crashed from £215m to just £30m in the last five years – a fraction of the £100m of extra costs, including pension contributions and debt interest, it is on the hook for...

Landlords' response: “We are not minded to support Philip Green ­because he took a perfectly good business and extracted money rather than investing.”

Pots, kettles.
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From the BBC, this morning:

Meanwhile another leadership hopeful, Home Secretary Sajid Javid, has vowed to recruit 20,000 new police officers.

Writing in the Sun, Mr Javid says: "More police on the beat means less crime on our streets. Not exactly rocket science is it?"

BBC Reality Check says, under the Conservative and coalition governments, the number of police offices has fallen by somewhere between 19,000 and 22,000.

I'm not sure why the BBC even bothered to link to the source of the figures for the reduction, this is more or less common knowledge.

Death of the High Street

Working on a daughter's mountain bike over last weekend. It was daughter A's bike that she had given to daughter B. Needed general clean and oil and the brakes did not work. Worn out brake blocks. Diagnosed at about 16.00 hrs.

To get into the local town to buy new ones and get home, round trip time probably 45 minutes minimum, and it was Sunday so limited choice of shops and the proper bike shop was over the other side of town, maybe an hour plus of driving.

Onto the web. Searched bike brake blocks. Did a bit of reading buyer comments. Ordered a set of new ones (from Amazon as it happens - Amazon fulfilled but sold by a specialist bike part retailer). Delivery said to be next day.

Went off and got on with other things like cutting grass.

Checked emails at about 17.00 - parts had been dispatched.

Next day - parts arrived at about lunch time. And fitted by 14.00.

Why on earth would I want to struggle through traffic and waste about an hour of my life driving to buy them myself from the High Street?

And it must be more 'green' to have them delivered like this as the van had lots of deliveries to make, rather than me making one run.

The High Street is doomed. Or maybe High Street landlords are doomed?

Amazon's tax bill (here we go again)

From The Independent:

Philip Hammond has said he will consider tax changes hitting online businesses to ensure there is a more level playing field for high street retailers.

The hint at a so-called Amazon tax for online companies that sell products over the internet comes as high street stores – under pressure from soaring costs like business rates – demand a fairer system.

The only logical way that a special 'Amazon tax' would help high street retailers is if the tax is so high as to discourage people from buying online; or so high as to push Amazon into a permanent loss-making situation.

Mr Hammond added: “The European Union has been talking about a tax on online platform businesses based on the value generated. “That’s certainly something we’d be prepared to consider.”

Amazon already pay two kinds of taxes on 'value generated', being normal VAT at 1/6 of their turnover and corporation tax on their residual profits. Do they play fast and loose and book profits sideways elsewhere? Quite possibly, says The Murphmeister, but that's a different topic. Try enforcing existing laws first before you start inventing new ones on an ad hoc basis.

The Guardian is of course going to town on this:

The company... revealed that pre-tax profits at its UK business tripled from £24m in 2016 to £72m last year. The figures were reported by Amazon UK Services, the company’s warehouse and logistics operation that employs more than two-thirds of its 27,000-plus UK workforce, in its annual financial filing to Companies House. The company almost halved its declared UK corporation tax bill from £7.4m in 2016 to £4.5m last year.

Amazon UK’s warehouse and logistics staff and management enjoyed a bumper $164m (£125m) payout from the company share scheme – a rise of almost a third on 2016’s £95m bonanza – thanks to the company’s surging share price... The payouts will have reduced Amazon’s tax bill because under UK tax law companies are required to deduct the vest value of the shares provided to employees.

Companies aren't *required* to claim this deduction, but they would be stupid not to (I've submitted such claims for my own clients, it's great fun). The value of those shares is liable to PAYE in full as if it were a cash payment.

PAYE rates are much higher than corporation tax rates, so these share-related gains don't *reduce* Amazon's tax bill, they significantly *increase* it, i.e. that £125 million was probably taxed at about 40%, meaning Amazon paid £50 million extra PAYE in addition to the £4.5 million corporation tax. Which is a pretty high overall tax rate when compared to £72 million profits.

For accounting purposes Amazon Services UK reports turnover as a charge to its parent company for the cost of delivering products, which hit £1.98 bn last year. Amazon will not reveal how much it paid in total to HMRC last year, beyond what it paid through Amazon Services UK.

That's turnover net of VAT, so Amazon will have paid about £400 million in VAT as well. Makes a total of £454.5 million tax paid. And we have no reason to assume that they don't pay full Business Rates on their offices and warehouses etc.

All the mugs who believe that 'the consumer bears the VAT' can go back to the remedial class. VAT is a tariff, just like the tariffs that Trump imposed on lots of stuff recently. Did all the businesses affected by them just shrug their shoulders and say 'Not to worry, consumers in the USA will pay the tax'? Of course not.

Trump v Amazon: War of the Rentseekers?

An interesting take from axios.com:

Trump’s deep-seated antipathy toward Amazon surfaces when discussing tax policy and antitrust cases. The president would love to clip CEO Jeff Bezos’ wings. But he doesn’t have a plan to make that happen.

Behind the president's thinking: Trump's wealthy friends tell him Amazon is destroying their businesses. His real estate buddies tell him — and he agrees — that Amazon is killing shopping malls and brick-and-mortar retailers.

"A short distance away"

From The Guardian:

The discrepancy was condemned by the Booksellers Association’s Giles Clifton, head of corporate affairs. “The BA has already highlighted the unequal treatment meted out by the business-rates system to British booksellers, the staggering 17 times differential between what the Waterstones on Bedford High Street pays in comparison with the Amazon business unit a short distance away,” said Clifton.

A short distance away?

Waterstone's have got a prime site in the middle of the shopping district in Bedford. The nearest Amazon warehouse I can find is five miles out of town in the middle of some fields, near Junction 13 of the M1 (rather conveniently). In location value terms, those are opposite ends of the spectrum.

On a per square foot basis, we'd expect the ratio to be something like 17 to 1, ergo the Business Rates should be about 17 times as much. (If he means that the total rates for the bookshop is 17 times as much as the total rates for Amazon's huge warehouse, then that is slightly more worrying).

Of course, if Waterstone's in Bedford thought that they could sell more profit by relocating to a large warehouse near Junction 13 of the M1, they'd do it. Fact is they can't, that's why they are where they are. They make more money by simply being where they are, and that extra money is what the Business Rates is a tax on (albeit in a very crude fashion).

This bit is a hoot as well:

CEBR director Oliver Hogan said that bricks-and-mortar bookshops had a range of advantages that Amazon did not offer, from involvement “with more reluctant readers, helping them to find books they might enjoy”, to the events they put on and the “physical interface” that “can trigger different and unpredictable exploration of themes and topics beyond what was intended”.

No disrespect to bookshops and the people who work there, but you stumble across a load more random stuff by mucking about on the internet than by browsing in a bookshop.

Amazon Prime

I have ordered a few things from Amazon over the past month, I checked my bank statement yesterday and saw a payment of £79 for "Amazon Prime, to which I never signed up (it is supposed to guarantee slightly quicker delivery times on all orders or something).

I rang the bank to ask what it was about, and - sort of off the record - the lady told me that this had happened to her as well and she knew of plenty of other instances, apparently Amazon trick you into signing up to this somehow and somewhere in the small print.

She helpfully gave me the number to ring - 0800 496 1081 - in order to cancel, which I did, got through after two minutes and the man apologised and said that they would cancel/refund it.

They haven't done so yet, but we will see…

Economic Myths: Amazon and Business Rates are crushing bricks and mortar retailers.

From The Guardian:

The former boss of Sainsbury’s has waded into the row over the tax paid by multinationals such as Amazon and eBay, saying it was unfair that that traditional retailers must pay huge rates bills for services such as roads and waste collection, while their online rivals paid little but received the same benefits…

Amazon, which raked in sales of more than £6bn in sales from UK shoppers, is estimated to pay only about £10m in business rates. Marks & Spencer, which has UK sales of just less than £10bn, last year faced a rates bill of £177m. Tesco’s UK sales last year were nearly £44bn, more than seven times those of Amazon, but its business rates bill is 60 times higher.

From ONS, total UK retail sales, year to September 2015: £375 billion. The largest single retailer is Tesco, with annual sales of £62 billion (two-thirds of which is UK).

From The Bookseller, total UK Amazon sale: £5.3 billion. Or £6 billion if you believe the Guardian.

To sum up and actually reflect facts:

1. Amazon have got a modest 1.6% share of the market. They do not compete on food, petrol or diesel, which make up half of retail sales by value.

2. Amazon pay more than enough for the roads they use via fuel duty for their delivery vans, which covers the cost of road maintenance three times over. And most councils charge separately for business waste, so Amazon will be paying its fair share of that as well.

3. Amazon clearly do not get the same benefits, they have a few large out of town warehouses in places where the location value and hence business rates are very low.

4. In terms of Business Rates per £1 of turnover, Amazon pay 0.2p, Tesco pay 1.4p and M&S, with smaller stores in even better locations pay 1.8p. Don't tell me that Tesco or M&S can't afford that, if not, then they are free to shut down all their stores in prime locations and just do home deliveries from their warehouses.

5. UK retailers are all building up their online sales and UK supermarkets are pushing their internet/home delivery sales quite heavily - if you shop at Sainsbury's or Tesco, you usually get given vouchers offering you extra points if you shop online, or money back on your first order after signing up etc.

I doubt whether this will shut them up, but hey.

As we know, Amazon is under constant political attack from both sides:

1. The lefties complain that Amazon is not paying enough VAT or corporation tax.

Under current rules, Amazon's £4.2bn annual sales in the UK, which rely on a network of eight mega-warehouses across Britain, are routed through Luxembourg. Revenue & Customs has no taxing rights over any profits from those sales.

If they route their sales through Luxembourg, so what? They just pay VAT in Luxembourg instead (at 15%). It was the UK government's decision to increase VAT from 15% to 17.5% to 20% a few years ago; they decided that they'd get more tax from businesses who can't relocate that lose in tax from those which can. That's the Laffer Curve for you.

Also, by and large, the remaining profits are still very much liable to corporation tax in the UK (or else why would Amazon be paying any UK corporation tax at all?). Amazon does not appear to make much in the way of profits, so far their strategy is all about 'grabbing market share', that's why their bill is so low.

2. The rent-seekers complain that Amazon is not paying enough in Business Rates:

Sainsbury's chief executive Justin King has attacked the government for creating an unfair burden on high-street retailers by not doing more to tax online-only rivals such as Amazon.

He called for a level playing field and said politicians should take action or risk seeing the high street shrink further. King said: "The burden of taxation in the UK falls very heavily on bricks-and-mortar retailers versus internet only retailers."

Let's gloss over the fact that Amazon is not "internet only", it's glorified mail order. All Amazon's suppliers pay Business Rates and Amazon has to pay Business Rates on its "eight mega-warehouses" (if we knew the full addresses we could look up the rates bill at the VOA) and existing offices, but here's an interesting bit of news:

Amazon is quitting its UK base of 16 years in Slough and moving to a 15-storey corporate office on the outskirts of the City of London.

The 600,000 sq ft building, known as Principal Place, will be just north of Liverpool Street station.

Righty-ho.

Average Business Rates in the City of London are £18 per square foot, so that means that Amazon will be, quite voluntarily, be paying £10 million tax to the government, on top of the £30 million privately collected tax it will be paying to its new landlords.

I wonder whether the lefties or the rent seekers will ever give Amazon credit for all the VAT they pay in Luxembourg and all the Business Rates they'll be paying in London, on top of normal PAYE payments and the £4 million-odd UK corporation tax?

Ah... thought not.
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This scenario also illustrates that while businesses will do their best to minimise the amount of tax they pay on turnover or profits, they are - by definition - not fussed about paying market rent inclusive of taxes on rental values.

Amazon are prepared to pay £40 million a year to occupy that site. They do not care whether they pay £40 million in rent; £30 million in rent and £10 million in Business Rates; or indeed £10 million in rent and £30 million in Business Rates. The matter is simplified if we assume that their new building belongs to Crown Estates or some other government/national body.

That's another KLN demolished!

"Jeff Bezos buys Washington Post after clicking ‘you might also like’ Amazon link"

Newthump on top form.

Q: Why doesn't Amazon pay any corporation tax on turnover of $50 billion?

A: Because corporation tax is calculated as a percentage of a company's profits, so if a company's profits are very low or it makes losses, it doesn't have to pay any.

So let's have a look at Amazon's consolidated group profit and loss account for 2012 from here:
Ah.. I see, it has wafer thin margins so we wouldn't expect it to pay much corporation tax in most countries in which it has sales.

Glad to have cleared that up!

Of course it is a matter of time until somebody turns up and says "Ah, but they hide all their profits in offshore subsidiaries!" which is the sort of thing only an idiot would say because those accounts are the consolidated group accounts, in other words it aggregates all profits (or losses) or all Amazon's subsidiaries, including all the money "hidden in offshore subsidiaries".

There'll be another Enron sooner or later where the auditors agree to omit some subsidiaries and to include others just to suit the client, but Amazon is not Enron. It is a very efficient mail order company that buys stuff and sells stuff (and advertises other people's stuff).

"Ah yes!" shout the lefties, "But they don't pay much VAT in the UK either because they route their sales via Luxembourg."

Yes, that is quite true, they do. They'd be stupid not to. VAT is an EU tax and the EU rules say that people who make money over the internet only have to register for VAT in one EU Member State and you can pretty much choose which one, so Amazon did the sensible thing and chose the one which has the lowest VAT rate (for internet sales) which happens to be Luxembourg. Their tax, their rules.