A Firm With Tax Haven Connections Now Owns the Amazon Warehouse in Scotland
Recently, The Ferret, a Scottish publication, obtained data indicating that the flagship Amazon warehouse in Scotland is now under the ownership of a company based in a tax haven. This is particularly relevant for many because the warehouse in question has received millions of pounds of grants from public funds.
The details come from the Registers of Scotland, which, according to the report by The Ferret, indicate that the warehouse is now under the ownership of Spectre Property Company. The Amazon warehouse is right outside Dunfermline, Fife.
Reporters have not been able to identify those who are in control of Spectre Property Company. Its registered address is in Jersey, where there is no capital gains tax.
The Warehouse’s Past
Originally, the warehouse site was under the joint ownership of the Scottish Enterprise and Fife Council, both public sector bodies. Those joint owners had sold the site to a private company for £1m and provided £6.3m for its development. Since then, it was sold two times, for £43.2m in 2012 and to Kamco in 2017. Kamco reportedly paid £61m for the Amazon warehouse. That firm is based in Kuwait.
The Taxpayer Money
The issue with this latest purchase, according to those who are opposed to tax havens, comes from the fact that Scottish Enterprise provided Amazon with taxpayer money. Scottish Enterprise disclosed that Amazon had invested £52m in Scotland and created 950 jobs simply by establishing the warehouse.
Scottish Enterprise was proud of bringing Amazon to Fife. Originally, Amazon had hoped to provide 750 permanent jobs and have as many as 1,500 people working at the warehouse at peak times.
During the planning, Scottish Enterprise earmarked land for the development, which was initially industrial. The Scottish Enterprise owned 67 percent of the land, and the Fife Council held the other 33 percent. This land was sold to Aref Brazil, an Infrared European Active Real Estate Trust Fund subsidiary, for £1m.
Scottish Enterprise revealed in 2011 that as much as £6.3m was set aside to help construct the warehouse. This was supplemented by a grant of £665,000 for the building of a fulfillment center, also from Scottish Enterprise.
Scottish Enterprise did not benefit from the later sale of the property, with no grants paid back. According to Scottish Enterprise, there was no need to pay back the grants since Amazon had “exceeded expectations” for the investment.
However, critics argue that these benefits were not enough to justify the amount of taxpayer money that Amazon received, especially given that the site is now owned by a company that will not pay Scottish taxes. According to critics, the site had an “explosive increase” in its value, but taxpayers did not sufficiently benefit from it.
Critics are also concerned that the profits have moved through various deals, resulting in the center’s ownership now sitting offshore.
Of course, the critics are also concerned that the site’s owner is Spectre Property Company, which is in Jersey. This ownership and location mean that the future sale of the property will not have capital gains tax applied to them. The current arrangement includes Amazon maintaining the lease until 2031.
Other Scottish Property Concerns and Amazon Tax Concerns
The new information regarding the tax haven connection of the Fife Amazon warehouse is part of The Ferret’s efforts to investigate Scottish property and its foreign ownership. According to previous research from the news outlet, 60 percent of Scotland’s foreign-owned property belongs to companies in tax havens. That 60 percent accounts for 1,851 companies who paid a total of £2.76 billion. This allows companies to avoid tax payments.
There are other concerns related to taxes and Amazon, including repeated accusals of underpaying the United Kingdom’s corporate tax.
Did you find this article useful?
Subscribe to our newsletter for more!