Tax: Starbucks, Google And Amazon 'Immoral'
Starbucks, Google and Amazon have been accused of "immorally" avoiding paying their fair share of tax in the UK, as the Chancellor prepares a blitz on tax dodgers.
MPs on the Public Accounts Committee criticised the companies for the "unconvincing and, in some cases, evasive" evidence they gave on why their corporation tax payments are so low.
Starbucks told the committee it had made a loss for 14 of the 15 years it has operated in the UK, a claim the committee said it found "difficult to believe".
In a report, the MPs added that Amazon's representative left them frustrated because he was "evasive and unprepared to answer legitimate questions".
They also said Google "undermined its own argument" that profits should be taxed in the countries where they are made because it transfers its non-US profits, including from the UK, to Bermuda, which has a more advantageous tax system.
Margaret Hodge, who chairs the Public Accounts Committee, said: "Global companies with huge operations in the UK generating significant amounts of income are getting away with paying little or no corporation tax here.
"This is outrageous and an insult to British businesses and individuals who pay their fair share.
"Corporation tax revenues have fallen at a time when securing proper income from taxes is more vital than ever.
"There is little credible information about what is going on. The evidence we took from large corporations was unconvincing and, in some cases, evasive."
Starbucks has now declared that it is preparing to change its tax affairs so that it pays more into Britain's coffers and there is growing pressure on others to follow suit.
The report was published as George†Osborne prepares to unveil a £154m crackdown on wealthy companies and rich individuals who dodge tax.
Officials will be ordered to use the cash to draft in an army of investigators to target high earners who aggressively avoid or evade paying tax.
The money will also fund extra staff to speed up work challenging multinationals' transfer pricing arrangements to stop global companies using legal loopholes to shift profits out of the UK.
However, Mr Osborne has warned against pricing Britain out of the world economy.
"If we make our taxes less competitive, that will just mean more companies stay out of Britain," he said.
But Katja Hall, from the Confederation of British Industry, told Sky News that tax avoidance is not a widespread problem.
"Companies pay £163bn in tax in the UK every year and the large majority of companies pay the right amount of tax," she said.
The Institute of Directors condemned the "hectoring from Westminster" and called for the tax system to be simplified.
Director General Simon Walker said: "If these firms are immoral to take advantage of tax loopholes, then politicians are surely immoral for creating the loopholes in the first place.
"Taxes should be simpler to cut down on avoidance and relieve the burden our complex tax code puts on companies who do try to do the right thing."
An HMRC spokesman said: "HMRC ensures that multinationals pay the tax due in accordance with UK tax law. We have been very successful in reducing tax avoidance by large businesses in recent years.
"We relentlessly challenge those that persist in avoiding tax and have recovered £29bn additional revenues from large businesses in the last six years, including £4.1bn in the last four years from transfer pricing enquiries alone. These figures speak for themselves."
The latest tax crackdown will be outlined in this week's Autumn Statement, which is also expected to contain bleak news for benefits claimants.
what do you think?
So i should think so too.why should the struggling corner shop pay the full tax and the multi- nationals get away with it.
Shaun some of the worst offender are the corner shop but they are into tax evasion not avoidance (cash in the back pocket). By the way how are the floods?
Running a self employed corner shop is a whole life commitment which requires very clever balancing to make more than a bare living!
Mikel sure is but I am not naive enough to believe all takings are declared I have known shop owners.
Yes blue side.but the corner shop isnt making millions.water gone now.the enviromental agency are still trying to find a missing steam though.
This is a major problem for the British economy, its only little people who pay taxes. Multinationals have been fiddling the system for years. They only pay a contribution or at best negotiate what they call fair.The Gov. are worried Starbucks will pull out if they have to pay taxes,so what? they must think Britain can't make second rate coffee like starbucks at least billions would stay in Britain. The reason these multinationals come here is because for them GB is a tax haven. Theres no mention of closing loopholes which was another unkept promise, the civil service are the worst culprits on this. If the Gov. wont clean up it's own agencies what chance have they of cleaning .up the rest
Russell this is not a tax haven there are better jurisdictions there will always be tax avoidance and might I suggest that if you have an ISA, pension plan or certain insurance products you are guilty (if that is the right term) as the multinationals. I might also point out that they do not escape tax for as an employer they have a contribution under NIC etc. I feel we are being had over by the politiicians
European Union (EU) tax directive established the law in 2003, which allows multi national companies to declare their profits in any EU country that suits them.
O gengisken correct but try getting this over to the lynch mob
Very good point! that's why American companies get footholds in Ireland and Luxembourg which have much smaller polulations and worldwide aggressive intentions and therefore much lower running costs. They are merely playing the system the EU created to obtain inward investment! It's all part of the global "money-go-round"!
Yes their taking advantage of loopholes.these need tightening up.
Two things here. Have these companies broken the law? If yes then they should pay the full penalty. If they have simply taken advantage of legal loopholes then this is the fault of the government. Would you or I avoid paying tax if we could legally? Of course we would!! No one should take a moral high ground here. We would do EXACTLY the same if it were legal. So cut out the hypocrisy just because these are big companies
Tim So well stated but people only want to be led by the hype and not look at the facts
Windows Live User
BIg BIG difference on what I would like to do but is actually being done by the rich while sha. ft. ing us all Country is in problems and they have all taken that much tax away that cameron is hitting the poor, genuine unemployed, sick and dying to try and plug the gap Remember when he said "we are all in this together" Who was he referring to?
I like this part of the statement 'The money will also fund extra staff .' So we again spend 50 pence to recover 10 and whilst everyone brings out the knives on this political hype it detracts from the real needs.
The reason for all this "red herring" stuff is the soon to be implemented real crackdown on the benefits system and on the working class generally. We all (including ordinary pensioners too!) pay proportionally more of our disposable income in taxes and official charges of all types. At the same time we accuse the top 20% of making hay at our expense, hence this diversionary pantomime. During my lifetime, it has always been thus, Whichever government was in power. Until we get free from the autocratic EU dictatorship and it's never ending restrictions and burden of political correctness to the N'th degree, you are never going to improve our lot. The whole system of UK governance needs a complete overhaul and modernisation. It is far too cumbersom and costs far too much in its present form
Mikel said perfectly
Windows Live User
got to vote for someone else who WILL reverse these situations and
Exactly right. Well said.
I`d rather have the money in my pocket and be called immoral than be skint. Lots of celebs have been dodging taxes for years but people still go watch them. If the people really feel that strongly about the tax dodging antics of starbucks, stop going there and putting money in their pockets. I can picture people whining in starbucks about them not paying tax, whilst sipping on a starbucks coffee. We seem to be full of hot air in Britain. ALL talk and zero action. We only have ourselves to blame for supporting these companies who like to milk our countrys economy dry. So stop being so pathetic. Use a different search engine, stop using amazon, and stop meeting in starbucks to have a whinge.
I totally agree. And we moan about our corrupt and useless politicians but we keep voting them back into office! Red-Blue-Red-Blue-Red-Blue ad infinitum
That's why there very rich
George says a few people in this country don't pay taxes. A FEW?! What planet is he on?!
Easy solution. Don't use these companies until they do pay their taxes ethically.
No point paying tax anyway all the goverment does is send it all abroad anyway
This comment has been removed for violations of our Terms and Conditions.
HMRC are sending many small business to the wall and ruining thousands of jobs in their pursuit of every last penny of tax and have been for quite some time. They are asset stripping the country.
Believe it when see it with this governed as they won't want to upset the yanks or the Europe hierarchy will they - toothless the lot of them
DON'T BLAME THESE COMPANIES....blame the authorities which allow these loopholes to exist. If those in "power" did their job correctly in the first place then companies like these wouldn't be able to exploit what was written in to originally benefit those in power and their rich friends. If you or I had the money to hire the tax accountants to avoid tax WE WOULD! Don't blame the companies for taking advantage of the politicians' perks!
I like cheap stuff from amazon i dont care if they evade tax because it means when i buy somethi.g i will get it cheaper in fact savin me money think about that before you all moan
It's attitudes like that which led us to the situation we are in now
Tax,,,,,,,,,,,what is tax? It's someting they throw at the poor to strip em clean///////////
whats not moral about evading tax.... if our government got a loop whole for these big companies who can blame them.... be honest if we werent taxed at source wouldnt the lay person try and get away with not paying tax..... also if we are not supplimenting rwanda with the 21 million... why dont our government use that money and tell one or all of these companies to get the hell out and put the 21 million of our tax payers money to good use for the company workers to open such the same with/ lets look after our own.
Vote with your feet - or mouse in Amazons case
How can MPs say it is "immoral" when these companies have done nothing illegal? They are only using the Tax regulations set by theses MPs who are now complaining!!! Pot, Kettle, Black!!!