'Immoral' multinationals face crackdown by taxmen
MPs urge more aggressive approach to corporations, while Osborne gives HMRC a cash boost
THE FAILURE of multinationals such as Amazon, Starbucks and Google to pay their "fair share" of tax on UK operations is "immoral" and an "insult" to British companies and individuals who do, MPs have said in a report out today.
The Commons Public Accounts Committee (PAC) says tax authorities at Revenue & Customs have been "way too lenient" when negotiating with corporations over how much tax they pay. The report calls on HMRC to be "more aggressive and assertive in confronting corporate tax avoidance", according to The Guardian.
MPs also singled out Andrew Cecil, an Amazon executive who was called to answer questions before the committee in November, for criticism, calling him "evasive", "unprepared" and lacking credibility.
Margaret Hodge, who chairs the PAC, told the Radio 4 Today programme this morning that the government should not spend any money with multinationals who avoid UK tax.
The PAC report comes just two days before Chancellor George Osborne gives his Autumn Statement, which is expected to include measures to crack down on tax avoidance. The two events have sparked a welter of tax-related news in the press...
GOOGLE INVESTIGATED BY HMRC
Evidence submitted to the PAC shows that the taxman is reviewing Google's tax returns for 2005-2011. The internet search giant paid corporation tax of £6 million in Britain last year on sales of £396 million, The Times reports. Google says it pays "all the tax required" and the HMRC investigation is "standard practice".
STARBUCKS CAVES IN
Starbucks has sought to pre-empt the public backlash expected by the publication of the PAC report by announcing it is "in discussions" with HMRC about its tax arrangements, according to the Financial Times. The Seattle-based coffee chain, which has reportedly paid just £8.5m in corporation tax since 1998, said it had been listening to the views of customers and employees and "we are looking at our tax approach in the UK". However, Amazon is sticking to its guns for the moment, releasing a statement saying it pays all applicable taxes in every country in which it operates.
OSBORNE CASH BOOST FOR TAX AUTHORITIES
Chancellor George Osborne is expected to use his Autumn Statement on Wednesday to announce £154m funding for new tax inspectors to help crack down on wealthy individuals and multinationals who avoid tax on their British operations, the BBC reports. It is hoped this will raise £2bn in tax annually.
TAXMAN TO MONITOR YOUR SPENDING
Another aspect of HMRC's clampdown is highlighted by The Daily Telegraph, which reports that individuals will have their credit files monitored to flag up legal and illegal tax avoidance. Credit reference agencies will compare individuals' tax returns and spending patterns to identify whether people should be investigated. About two million people are expected to be monitored under the scheme, many of them self-employed people who are thought to be under-reporting their earnings.