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Amazon to invest in new London office building as it moves out of Slough HQ(Guardian Web Via Acquire Media NewsEdge) Amazon is to invest in a new 15-storey corporate office near the City of London, leaving Slough, which has been the online retailer's UK base for 16 years. The group has not yet decided whether the new office, in Shoreditch, will become its UK corporate headquarters, but the move will have no impact on Amazon's controversial tax arrangements. Amazon's UK operations started in Slough in 1998 but has expanded rapidly since. Beyond its network of British warehouses, the UK business employes 1,700 people in corporate functions, mostly spread between Slough and offices in Farringdon, central London, which opened last year. Amazon has not yet decided whether Shoreditch or Farringdon will be its new UK headquarters. These staff will all switch to central London next year and by 2017 many will be transferring to Shoreditch. Amazon said the new building, to be called Principal Place, will provide it with "total capacity" for more than 5,000 London employees as it continues to invest and expand. The moves will not affect controversial arrangements through which Amazon is allowed to designate $7bn (£4.3bn) in UK sales as sale to a company in Luxembourg. By contrast, Amazon's UK business reported sales of just £449m last year, paying £4.2m in tax on pretax profits of £17m.. In May Margaret Hodge, the chair of the public accounts committee, said she thought the arrangements meant Amazon was not paying its fair share of tax. "They are making money out of not paying taxes. I no longer use Amazon. We should shop elsewhere," the Labour MP said. The Shoreditch office will not be the principal place of business for Amazon EU Sarl, the business from which UK customers buy all their goods. Amazon made $7.29bn from UK shoppers last year, up from $6.48bn the previous year. Amazon EU Sarl has been able to convince HM Revenue & Customs that it does not meet the so-called "permanent establishment" test in Britain, and therefore does not have any taxable activities in the UK. Google, which books its UK sales in an Irish subsidiary, is also planning a large new office in London, near Kings Cross Station. The mayor of London, Boris Johnson, said: "Our city is the perfect home for top tech talent and I am very pleased that Amazon have confirmed their intention to create thousands of new jobs at a major new base in east London. We are proving time and again that we have the right places and people to support this vibrant sector." Christopher North, managing director of Amazon's head of UK operations, said: "We have already invested well over £1 billion and created more than 7,000 permanent jobs across the UK. "To support our continued growth in the UK, we have secured this exceptional building giving us the capacity to hire thousands of new employees in London in the coming years, in addition to the thousands of permanent roles we will create across our UK fulfilment and customer service centres." Located between Liverpool Street and Shoreditch High Street stations, Principal Place is a mixed-use development with a 600,000 sq ft office building next to a residential tower. Construction will start later this month and Amazon will take the keys for 431,000 sq ft of office space in 2017. Confusingly, Amazon's UK business is called Amazon.co.uk Limited even though it does not own or operated the website of the same name. Instead the UK business operates Amazon's British warehouses, buying teams and other functions. It sells these services to sister Amazon companies overseas, mainly Amazon EU Sarl, the businesses European headquarter company. UK boss Christopher North has claimed that the corporate structure of Amazon was not tax-drive and insisted the European business could not function were it required to be split up country-by-country. (c) 2014 Guardian Newspapers Limited. |