TAX loopholes must be closed to ensure online giants such as Amazon pay their fair share, critics demanded last night.

The out-of-date rules, drawn up before the age of the internet and global businesses, urg-ently need rewriting, they say.

The changes were demanded to make it fairer for high street retailers who are paying millions more than the paltry £1.7million Amazon coughed up last year.

Senior Labour MP Rachel Reeves said: “While the high-street suffers, Amazon sees its tax bill fall despite soaring profits.

"Appalling that they can get away with this.

“Tax reform to level the playing field between high street and online retailers is long overdue.”

The calls came after it emerged that the UK tax bill for the warehouse and delivery arm of Amazon was just £4.6million last year on profits of £1.98billion.

The company deferred £2.8million of this.

Its US accounts show it made nearly £9billion of sales in Britain, made up of other parts of the company, such as the retail arm and digital services including music and Kindle.

But Amazon does not reveal the UK tax bill for these parts of the company, which are based in Luxembourg.

By contrast Marks & Spencer, John Lewis and Dixons Carphone pay 20 times as much corporation tax and twice as much on wages.

Martin McTague, from the Federation of Small Businesses, said: “Business rates are rising while corporation tax is coming down.

“If we want to breathe life back into our high streets, that needs a rethink.”

Tax expert Heather Self added: “If the Government wants Amazon to pay more tax it will have to change the rules.”

Amazon, founded and run by US billionaire Jeff Bezos, insists its profits remain low.

It added: “We pay all taxes required in the UK and every country where we operate.”