Spud’s lovely assumption

And I will also say I do not believe Amazon any less profitable in the U.K. than the US

I know that in fact. If it was it would have pulled out long ago

This is a single global entity with a consistent core business which is mature in the UK

Ford’s been in Europe for a century now. GM had been. It’s reasonably well known that Ford Europe and GM Europe are not equally profitable to Ford US and GM US.

15 thoughts on “Spud’s lovely assumption”

  1. Why would Amazon close down a profitable section of their operation just because it was less profitable than another section of their business? If their UK branch was losing them money and they could see no way of turning it around it would make sense, but if it is making a profit why would they close it?

  2. Oh FFS.

    Why does the media let him get away with this shyte?

    Amazon’s UK tax bill is less than the made up number Spud wants. This might be OK “only if they explain why.”

    Why the fuck should Amazon have to explain anything to a fat sad arsehole?

    The ONLY people Amazon have to explain their UK tax position to is HMRC. And they obviously have.

  3. And I will also say I do not believe Amazon any less profitable in the U.K. than the US
    I know that in fact. If it was it would have pulled out long ago

    Lol, thick as fucking mince.

    I hear John Lewis are closing all their stores except the one on Oxford Street, as that is the most profitable.

  4. Surely the chances of a company being equally profitable in every single country in which they operate is as close to impossible as makes no difference. Even countries of similar size and culture and prosperity aren’t going to be identical in profitability for a multitude of reasons.

    Even if Amazon decided to concentrate extra resources in the US instead, as the demand for their service there is already pretty well satisfied, this probably wouldn’t generate as much extra profit as they had lost from closing their UK operation. And if extra US investment would be that effective, why not just do it anyway?

    I haven’t had a single day’s formal tuition in economics but if this nonsense is representative of the standard of economics teaching then maybe it would have been counter-productive anyway.

  5. JS

    Don’t forget neither has Murphy had even one day’s tuition in economics. He walked out of the course at Southampton (from recollection) on the first day because apparently, it was ‘all nonsense’, and together with his acolyte Howard Reed is seeking to ‘redefine economics’ as ‘whatever he believes’. Sadly many of the excellent inhabitants of this parish inform me he can’t be struck off as a chartered accountant but surely anyone with even a rudimentary understanding of a balance sheeet knows this guy is talking bollocks. How on earth can any credible organisation take him seriously?

  6. Can be lots of reasons for running a non-profitable business unit or why a business unit might report as non-profitable, it’s why Management Accountants don’t just look at reported profit. Apparently Spud is an expert at management accounting so you would think he’d know this.
    Even if it’s truly loss making could be that market presence is important enough that maintaining a loss making operation in another country is worth it in strategic terms or that you expect it to grow to be profitable. I’ve worked for a business where the parent company kept us open purely not to lose some technical expertise and manufacturing capability, apparently for various legal and tax purposes it was better that we were a separate company than a cost centre and any work we did for other clients to utilise spare capacity was considered a bonus.

  7. Someone called Sirram is giving the Greasy Chip a right old pasting in the comments on this over at TRUK, with Murphy’s typed responses becoming more and more hamfisted

  8. “And I will also say I do not believe Amazon any less profitable in the U.K. than the US

    I know that in fact. If it was it would have pulled out long ago”

    But . . . ? Amazon really isn’t profitable in the US. They’ve only had a small number of scattered profitable quarters. They’ve been hemorrhaging money for years in an attempt to grow large enough, fast enough, that they can dominate their sector.

  9. “Can be lots of reasons for running a non-profitable business unit or why a business unit might report as non-profitable”

    Amen. Workers in the factory I worked in in the early 1970s were concerned with perpetual reports of zero earnings in the business. My third year there, I went to work for the business accountant. I learned quickly that our business was pretty much break even, BUT, the ingredients at transfer prices from other departments was making the corporation a fortune.

  10. @BraveFart September 5, 2019 at 4:45 pm

    Sirram seems to have been banned and expunged

    Sirram – Sir/Lord Amstrad? He knows about P&L

    Stuart says: September 5 2019 at 12:49 pm

    Richard,

    I have followed the last post on the subject with interest, and now this one as well.

    Having done some research in the subject, I am inclined to agree with the poster who thinks you have acted unethically.

    As an accountant myself, I am obliged to report you to the relevant authorities for such behaviour. I am sure you understand and would do the same – in fact I believe you have for much less in the past.

    Have a nice day.

    Stuart says: September 5 2019 at 8:12 pm

    I think the ICAEW will be interested to see you behavior, and obvious lack of accounting and tax knowledge, but I wasn’t actually thinking of them.

    Your logic rests upon your interpretation of an accounting and tax system that doesn’t as yet exist. It would be one thing to claim that if the law was changed Amazon would owe more tax, but at no point do you make that clear.

    You go to great lengths to insinuate Amazon are avoiding tax through subterfuge. You have no evidence for this, and this amounts to libel. Something I am aware you are familiar with. Libel is by it’s very definition unethical.

    I have taken a copy of this and the other blog to make sure you can’t hide your appalling behavior. Please feel free to send your own copy to the ICAEW though. The ICAEW do take action against people for sub-standard practice and unethical behavior.

    I think it stands to your lack of character that you are even claiming that you had nothing to do with the case I referred to – claiming that the CEO took the action. What you fail to mention is that you left him with no choice by making a complaint about the individual concerned directly to him. So not only are you pathetic enough to go after someone who had the temerity to criticize you, costing them their job, you also are vile enough to lie about it afterwards. I understand you also gloated about your “victory” afterwards.

    Don’t worry though. I’m sure what goes around comes around.

    ROFL

    https://www.t*xresearch.org.uk/Blog/2019/09/05/amazon-setting-the-record-straight/#comment-833912

  11. I remember that when John Birt ran the BBC and created his internal market, insisting on treating every department as separate, that there were numerous absurdities.

    For example:
    Eastenders had a number of sets which were only used once in a while so were stored in between use in various spare corners of the BBC studios. When the internal market was introduced the studio was forced to charge the production substantial fees for storage. The production then found that it was cheaper to trash the sets and rebuild them every time they were needed, the unnecessary rebuilding being an additional cost to the BBC as a whole.

    2) When a programme needed a piece of music it would go to the BBC record library and borrow a CD to copy it to tape. That way the BBC would only have to buy one, or at most a handful, of each CD. Enter the internal market and the library was forced to charge the programme far more in loan charges than it would cost to buy a CD. Of course, what happened was that each programme would drop into HMV whenever they wanted a CD and could then keep it for as long as they liked.

    It might sound trivial, but over a huge organization these sort of unnecessary extra costs must have been substantial, for no obvious gain.

  12. @JS

    Birt was correct with internal market; the BBC mgt, unions & staff deliberately screwed it up by charging each other way above cost fees.

    Bureaucrats (esp public sector) always put more effort into destroying efficiency than improving it.

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