The latest figures show that even though Amazon’s profits trebled last year, their UK tax bill has significantly reduced.

How Much?

Amazon’s reported pre-tax profits have jumped from £24.3m to £72.3m with the company making £1.98bn in sales revenue. Where their tax bill and contributions are concerned however, the bill is down from £7.4m a year ago to just £4.6m, and their warehouse “fulfilment centres” division (Amazon UK Services) has been able to defer £2.9m, meaning that £1.7m in tax is the contribution being paid for now.

Also, Amazon Web Services UK has paid £155,000, down from £404,000 last year, even though profits there have nearly doubled from £2.7m to £5m.

Why?

Share-based payments for staff is the main reason offered by Amazon for its low tax bill during a profits boom. For example, Amazon employs more than two-thirds of its 27,000-strong UK workforce, and it has been reported that full-time warehouse staff have, on average, received shares worth more than £1,000 a year. AWS is reported to have given its staff share awards worth £11.8m (compared to shares worth £5.8m two years ago).

A rising Amazon share price has resulted in the selling of many of these shares on the open stock market. Since the tax bill is based on the sale price for company and individual, this has contributed to a lower tax bill.

Some commentators have also pointed out that Amazon basing its European operations in Luxembourg has also offered some significant tax-haven opportunities.

Based On Profits Not Revenues

Despite some anger in the UK over what looks like a relatively small tax liability for a company that appears to be doing so well here, Amazon has reportedly defended itself by saying that tax is based on profits, not revenues, and profits have remained low due to a competitive retail market, Amazon’s low-margin business, and its continued heavy investment.

Reform Calls – Public Contracts

Some commentators have also been critical and called for reform over Amazon’s payments for public contracts. For example, it has been reported that Amazon was paid more for online storage services by the Government over the first 3 months of this year than its biggest UK arm was taxed last year, despite Amazon not being made to reveal the details of their tax arrangements.

What Does This Mean For Your Business?

It is a source of great annoyance to many UK businesses that receive and pay significant tax bills, that an overseas tech giant company can appear to make big profits in the UK and yet only be required to pay what appears to be a relatively small amount of tax. It has echoes of Facebook’s UK operations last year paying only £5.1m in corporation tax, despite a profits jump and a quadrupling of revenue, thanks to advertising sales.

Whilst some are calling for reform, and some anger has been publicly expressed, some commentators have pointed to a fear of losing big companies this close to Brexit as a reason why we may not expect HM government to come down too hard on Amazon and other tech giants for the time being.

If you’ve got a mix of display settings that suits your preferences and needs e.g. a certain thumbnail size, in Windows you can easily set this as the default for all folders of the same type. Here’s how:

– Open the View tab on the File Explorer ribbon.

– Click Options.

– Click Apply to Folders under View.

– That’s it !

Even though, in an interview this week, President Trump appeared to absolve Russia of election interference (since retracted), the US Department of Justice has now charged 12 Russian intelligence officers with hacking Democratic officials in the 2016 US elections.

The Allegations

It is alleged by the US Justice Department that, back in March 2016, on the run-up to the presidential election campaign which saw Republican Donald Trump elected as president, the Russian intelligence officers were responsible for cyber-attacks on the email accounts of staff for Hillary Clinton’s Democrat presidential campaign.

Also, the Justice Department alleges that the accused Russians corresponded with several Americans (but not in a conspiratorial way), used fictitious online personas, released thousands of stolen emails (beginning in June 2016), and even plotted to hack into the computers of state boards of elections, secretaries of state, and voter software.

No Evidence Says Kremlin

The Kremlin is reported to have said that it believes there is no evidence for the US allegations, describing the story as an “old duck” and a conspiracy theory.

32, So Far

The latest allegations are all part of the investigation, led by Special Counsel Robert Meuller, into US intelligence findings that the Russians allegedly conspired in favour of Trump, and that some of his campaign aides may have colluded.
So far, 32 people (mostly Russians) have been indicted. 3 companies and 4 former Trump advisers have also been implicated.

Trump Says…

President Trump has dismissed allegations that the Russians help put him in the White House as a “rigged witch hunt” and “pure stupidity”.

In a press conference after his meeting with Russian President, Vladimir Putin in Helsinki, President Trump, however, caused shock and disbelief when asked whether he thought Russia had been involved in US election interference, he said “I don’t see any reason why it would be”.

He has since appeared to backtrack by saying that he meant to say “wouldn’t” rather than “would”, and that he accepts his own intelligence agency’s findings that Russia interfered in the 2016 election, and that other players may have been involved too.

What Does This Mean For Your Business?

Part of the fallout of constant struggle between states and super-powers are the cyber attacks that end up affecting many businesses in the UK. Also, if there has been interference in an election favouring one party, this, in turn, affects the political and economic decisions made in that country, and its foreign policy. These have a knock-on effect on markets, businesses and trade around the world, particularly for those businesses that export to, import from, or have other business interests in the US. Even though, in the US, one of the main results of the alleged electoral interference scandal appears to have been damaged reputations and disrupted politics, the wider effects have been felt in businesses around the world.

These matters and the links to Facebook and Cambridge Analytica have also raised awareness among the public about their data security and privacy, whether they can actually trust corporations with it, and how they could be targeted with political messages which could influence their own beliefs.

A new offshoot of Cambridge Analytica, the disgraced data analysis company at the heart of the Facebook personal data sharing scandal, has been set up by former members of staff under the name ‘Auspex’.

Old Version Shut Down

After news of the scandal, which saw the details of an estimated 87 million Facebook users (mostly in the US) being shared with CA, and then used by CA to target people with political messages in relation to the last US presidential elections, CA was shut down by its parent company SCL Elections. CA is widely reported to have ceased operations and filed for bankruptcy in the wake of the scandal.

Ethical This Time

Auspex, which (it should be stressed) is not just another version of CA, but is likely to carry on the same kind of data analysis work, has been set up by Ahmed Al-Khatib, a former director of Emerdata which was also set up after the Cambridge Analytica scandal. Mr Al-Khatib has been reported as saying that Auspex will use ethically based, data-driven communications with a focus on improving the lives of people in the developing world.

Middle East and Africa

The markets in the developing world that Auspex will initially be focusing on are the Middle East and Africa, and the kinds of ethical work that it will be doing, according Auspex’s own communications, are health campaigning and tackling the spread of extremist ideology among a disenfranchised youth.

Compliant

Auspex has been quick to state that it has made changes and that it will be fully compliant from the outset, thereby hoping to further distance itself from its murky origins in CA.

Personnel

One thing that is likely to attract the attention of critics is that, not only is Mark Turnbull, the former head of CA’s political division the new Auspex Managing Director, but that the listed directors of the new company include Alastair Harris, who is reported to have worked at CA, and Omar Al-Khatib is listed as a citizen of the Seychelles.

What Does This Mean For Your Business?

The Cambridge Analytica and Facebook scandal is relatively recent, and the ICO have only just presented their report about the incident. For many people, it may not feel right that personnel from Cambridge Analytica can appear to simply set up under another name and start again. Critics can be forgiven for perhaps not trusting statements about a new ethical approach, especially since Mark Turnbull appeared alongside former CA chief executive Alexander Nix in an undercover film by Channel 4, where Nix gave examples of how his company could discredit politicians e.g. by setting up encounters with prostitutes.

The introduction of GDPR has brought the matters of data security and privacy into sharp focus for businesses in the UK, and businesses will be all too aware of the possible penalties if they get on the wrong side of the ICO.

In the case of the Facebook / Cambridge Analytica scandal, the ICO has recently announced that Facebook will be fined £500,000 for data breaches, and that it is still considering taking legal action against CA’s company’s directors. If successful, a prosecution of this kind could result in convictions and an unlimited fine.

The Advertising Standards Authority (ASA) has been criticised for a lack of regulation of the use of the term “fibre” in broadband adverts, which has meant that some consumers may have been misled.

Findings of Research

The findings of the research, commissioned by network provider CityFibre, appear to show that customers may be confused about the fibre aspect of the broadband service they have.

For example, of the 3,400 broadband customers surveyed, 65% believed that they had already upgraded to a fibre connection and theywere no longer on slower copper cables, even though copper is still the most common connection type in the UK.

Also, 24% of the broadband customers surveyed believed they purchased services that used fibre cables running straight to their front door (FTTP). The reality, however, is that only 3% of the UK population have FTTP connections.

The problem with this, apart from the fact that the UK is still lagging behind in fibre broadband provision, is that almost half of those customers surveyed believed that services advertised as ‘fibre’ delivered internet in this way as standard.

Broadband Providers & ASA To Blame

The report by CityFibre lays the blame for years of apparently misleading advertising information about what “fibre” actually means at the door of broadband providers for how they have used the word in their adverts, and the ASA for appearing to not regulate how the word has been used.

Stop Using The Word Unless…

CityFibre has called upon broadband providers to stop using the word ‘fibre’ unless it is describing a full-fibre connection, and has stated that it plans to take the “backward looking” ASA to court to dispute the ASA’s conclusion that ‘fibre’ is not a misleading term in advertising.

What Does This Mean For Your Business?

Many critics would say that years of misleading advertising of broadband speeds, as well as spurious use of the word ‘fibre’ without explaining what it really means, have left many domestic and business customers totally confused about what they are paying for. This has undermined trust in the industry.

The sad prevailing fact for UK businesses is that, according to a recent survey, the UK is now at 35th place in the global average broadband speed league tables. This is because it has been too late in embracing a full-fibre solution – FTTP (fibre to the premises). Many critics have pointed to UK infrastructure provider Openreach shying away from FTTP because of the perceived costs and level of difficulty of large-scale rollouts.

All this means that UK businesses still have to rely on the slower FTTC (fibre to the cabinet) alternative, which uses copper wires to carry broadband from street cabinets to their premises. This has put UK businesses at a competitive disadvantage with businesses in many other European countries.

Regardless of advertising claims, and despite government plans and announcements, it looks as though the UK may only actually have 7% full fibre coverage by 2020, with full coverage unlikely for another 15 years.

A Poll by the Royal College of Surgeons using freedom of information requests has revealed that 8,946 fax machines are still in use in NHS Trusts in England.

World’s Largest Purchaser of Fax Machines

The poll was carried out after a report last year by DeepMind Health revealed that the NHS was the world’s largest purchaser of fax machines.

The new RCS poll revealed that the NHS Trust with the most fax machines still in use is Newcastle upon Tyne NHS with 603. Barts Health NHS Trust still uses 369 fax machines.

Labour Party Says There Are More

In June this year, the Labour Party reported that it believed that there were at least 11,620 fax machines still in use across the NHS in England, costing £137,000 a year to maintain.

Fax Machines

What is considered to be the first commercial version of a modern fax machine (short for facsimile) was introduced (and patented) by Xerox Corporation in 1964. Fax machines, however, reached the peak of their popularity in the late 1980s.

NHS Also Largest User of Pagers

A report by telecoms consultancy CommonTime from last year showed that the NHS is the largest user of pagers, with 130,000 of them still in use in the NHS, mainly in acute hospitals. Pagers reached their peak of popularity back in 1994 (61 million in use), and it is believed that there are now only 1 million users worldwide. The NHS, however, spends £6.6m on them each year.

The reason for their continued popularity in the NHS is thought to be their simplicity, their use of radio frequencies rather than their reliance on Internet connections, their resilience, the fact that there’s an audit trail, they’re easy to carry, and they have a long battery life.

The CommonTime report suggests that the NHS could save up to £2,718,009 per year / over £10m across four years by simply replacing pagers with smartphone-based applications.

Hopes For Greater Move To Digital

These reports and polls appear to show that the NHS is lagging behind in the digital revolution and clinging to obsolete technology where its internal communications are concerned.

The last Health Secretary, Jeremy Hunt, had wanted a paperless NHS by this year, and the new Health Secretary, Matt Hancock, is known to be a supporter of technology and digitisation.

What Does This Mean For Your Business?

Those in the NHS have pointed out that years of austerity, cuts, lack of funds, and the need to pare back spending on facilities and technology in order to keep the service going are the reasons why the NHS still uses outdated communications technology like fax machines.

The natural substitute and successor to fax machines appears to be apps like SnapChat and WhatsApp. In fact, during the WannaCry cyber attack that brought down NHS computer systems, many NHS staff used WhatsApp to communicate, with an estimated 500 patients a day being diagnosed from X-ray images sent on the app.

Clearly, there is a need for an affordable, reliable, fast and easy to use day-to-day communications platform for NHS Trust staff to use that could help them to save the Trusts money, save themselves time, and add value to the provision of services. Continuing to rely on fax machines will probably only lead to stealth IT anyway. Apps appear to be the natural way forward, provided they offer the right level of security for patient data, but the NHS also has an internal email system called NHSmail that is not being used widely enough.