On Monday, a parliamentary committee gave the UK heads of some of the world’s biggest companies a massive grilling over the way they pay tax in this country. Well, when I say pay tax, I really mean do their very best to avoid paying tax altogether!
The committee included representatives from Amazon, Google and Starbucks. Due to loop holes found by very crafty accountants and other financial staff, some of the numbers being produced by these committees and investigations are staggering. Using Starbucks as an example, they have paid just £8.6m in tax in over 14 years of trading in this country! They get around it by having their regional headquarters in the Netherlands where the rate of corporation tax is 8% lower than ours.
It’s not just Google, Amazon and Starbucks under the spotlight here though:
- Facebook has paid just £238,000 in tax in the last year
- Ebay has paid only £1.2m in tax
- Apple paid only 2% in tax on non-US profits. This equates to $713m on profits of $36.8bn
- In 2011, Google paid only £6m in tax on profits of £395m
The list grows. So far, the companies accused of immoral tax evasion are:
- Arcadia Group
- Tesco and other supermarkets
- All banks
What is frustrating is that the Government knows these loop holes exist yet are doing nothing about it. Their excuse is that they don’t want to scare away all the big companies from our shores, putting thousands of jobs at risk and losing investment. Well let me say that these companies WOULD NOT leave our shores if the tax rules were tightened up as the UK is still one of the worlds top ten economies with London still the financial capital of the world. The tax avoiding companies wouldn’t like it if the rules got tighter but they certainly wouldn’t leave the UK as we are far too valuable to them.
Depending on what study you read, the UK loses between £60bn-£100bn in lost or avoided tax every year. Now I don’t know about you, but common sense would state that if our Government did more to claim this lot back, they wouldn’t have to bludgeon our own economy in order to balance the books. The money is there Cameron and Osbourne. You’re the guys in charge! Sort the rule book out and go get it! Give us all a bloody break!
Something interesting also came out on Monday night. Sky News reported that the French Government passed an order which required Starbuck (I think) to pay back hundreds of millions of dollars in retrospective tax. This is the first move of it’s kind during this whole tax avoidance scandal. Hopefully this is something which will catch on with other Governments including our own. And if they do, the companies stated above will find it very hard going, and deservedly so, to pay back the prob
able billions they have avoided paying in the past in tax.
It’s time all Governments and not just our own really did put some effort into closing the tax loopholes around the world and made business become ethical again.