Foreign companies, including Starbucks and Google, could be responsible for as much as £11bn in unpaid British taxes, it has been disclosed.HM Revenue & Customs has identified £25bn of unpaid taxes that may have been wrongly withheld by corporations, of which almost 44pc are overseas companies, according to Pinsent Masons, the tax specialists.
The research comes ahead of an appearance next week by Lin Homer, the HMRC chief executive, in front of MPs over how effective the taxman has been in collecting money from large foreign corporations.
International companies such as Google, Facebook, Amazon and Starbucks have sparked controversy after it emerged that they all pay minimal tax on large UK revenues.
Although these firms follow UK law, there are concerns that such giant corporations are using accounting strategies to divert profits earned in Britain to their parent companies or to lower tax jurisdictions, via royalty and service payments, or by so-called transfer pricing.
Starbucks has paid no corporation tax in Britain for the past three years, while Amazon, Facebook and Google have together paid less than £30m of tax despite sales of £3.1bn over the past four years.
Margaret Hodge, chairman of the Public Affairs Committee, which will quiz Ms Homer on Monday, told The Daily Telegraph that the behaviour of some companies was “immoral” and that it wasn’t clear if HMRC was doing enough to make sure companies didn’t get away with it.
The PAC has demanded that Google, Amazon and Starbucks attend a separate hearing the following week to defend their records.
“There is a growing anger among ordinary people who pay their taxes that the system is not fair,” said Ms Hodge. “It may be legal but it is not moral.”
Charlie Elphicke, a Conservative MP and former tax lawyer, has called for a radical change in corporate behaviour and an end to company bosses “playing the system”.
According to Mr Elphicke, 19 US-owned multinationals are paying an effective tax rate of 3pc on British profits, instead of the standard rate of 26pc. The key to this is called transfer pricing.
This can involve a parent company charging its regional divisions a royalty fee for its brand name and corporate marketing benefits, with the payments being transferred directly to the head office.
In other firms, the brand name, trademarks or research and development services are registered not in the UK, but in another country with lower tax rates such Luxembourg or Ireland.
This has the effect of magnifying profits in the lower tax jurisdiction and minimising them in the UK.
“We want to try and find out whether people are being treated equally and fairly under the law,” said Ms Hodge. “I’m not sure HMRC is doing all it can to make sure every penny due comes in.”
David Cameron has said HMRC should “look carefully” at cases where international corporations have legally been able to pay no corporation tax – or very small amounts – on billions of pounds of UK revenue.
telegraph.co.uk
The research comes ahead of an appearance next week by Lin Homer, the HMRC chief executive, in front of MPs over how effective the taxman has been in collecting money from large foreign corporations.
International companies such as Google, Facebook, Amazon and Starbucks have sparked controversy after it emerged that they all pay minimal tax on large UK revenues.
Although these firms follow UK law, there are concerns that such giant corporations are using accounting strategies to divert profits earned in Britain to their parent companies or to lower tax jurisdictions, via royalty and service payments, or by so-called transfer pricing.
Starbucks has paid no corporation tax in Britain for the past three years, while Amazon, Facebook and Google have together paid less than £30m of tax despite sales of £3.1bn over the past four years.
Margaret Hodge, chairman of the Public Affairs Committee, which will quiz Ms Homer on Monday, told The Daily Telegraph that the behaviour of some companies was “immoral” and that it wasn’t clear if HMRC was doing enough to make sure companies didn’t get away with it.
The PAC has demanded that Google, Amazon and Starbucks attend a separate hearing the following week to defend their records.
“There is a growing anger among ordinary people who pay their taxes that the system is not fair,” said Ms Hodge. “It may be legal but it is not moral.”
Charlie Elphicke, a Conservative MP and former tax lawyer, has called for a radical change in corporate behaviour and an end to company bosses “playing the system”.
According to Mr Elphicke, 19 US-owned multinationals are paying an effective tax rate of 3pc on British profits, instead of the standard rate of 26pc. The key to this is called transfer pricing.
This can involve a parent company charging its regional divisions a royalty fee for its brand name and corporate marketing benefits, with the payments being transferred directly to the head office.
In other firms, the brand name, trademarks or research and development services are registered not in the UK, but in another country with lower tax rates such Luxembourg or Ireland.
This has the effect of magnifying profits in the lower tax jurisdiction and minimising them in the UK.
“We want to try and find out whether people are being treated equally and fairly under the law,” said Ms Hodge. “I’m not sure HMRC is doing all it can to make sure every penny due comes in.”
David Cameron has said HMRC should “look carefully” at cases where international corporations have legally been able to pay no corporation tax – or very small amounts – on billions of pounds of UK revenue.
telegraph.co.uk
No comments:
Post a Comment