Tax: Starbucks, Google And Amazon 'Immoral'

By Darren McCaffrey, Sky News Reporter

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.

Starbucks says it is reviewing its tax arrangements

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 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.

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