MPs and Public Accounts Committee call for more to be done by HM Revenue and Customs to fight against tax avoidance by UK businesses.
BBC News reports that HM Revenue and Customs (HMRC) has been told to do more to tackle the issue of corporate tax avoidance by companies in the UK following a report conducted by the Public Accounts Committee suggesting that many businesses operating in the UK were “getting away with paying little or no corporation tax here”.
In response to the report’s findings, Margaret Hodge, Chairwoman of the Public Accounts Committee commented: “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.” She also emphasised her belief that HRMC needs to be doing more to ensure that businesses pay the correct amount of tax.
“HMRC should be challenging this, but its response so far to these big businesses and their aggressive tax planning has lacked determination and looks way too lenient.” Hodge said. “Policing the tax system must be at the heart of what HMRC does. It must be more aggressive and assertive in confronting corporate tax avoidance. This is essential for the credibility of both the department and the tax system.”
The committee took evidence in November from Starbucks, Google and Amazon executives regarding the amount of corporation tax they paid in the UK, with Hodge concluding that the results were “unconvincing and, in some cases, evasive,” and that many multinational companies were exploiting the UK tax system to move their profits offshore.
While Starbucks agreed that the issue should be addressed, stating that “we are looking at our tax approach in the UK,” Amazon released a statement saying that it paid the correct taxes in each country it operates in and that it has “a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation.”
HMRC asserted that it has already been successful in preventing corporate tax avoidance, with a spokesman stating: “we relentlessly challenge those that persist in avoiding tax and have recovered £29 billion ($46.5 billion/€35.8 billion) additional revenues from large businesses in the last six years, including £4.1 billion ($6.6 billion/€5 billion) in the last four years from transfer pricing enquiries alone.”
It has also been reported that Chancellor George Osborne is planning to unveil details of £154 million ($247.4 million/€189.7 million) of funding towards tackling tax avoidance in the UK, which is expected to result in additional staff being hired to investigate those evading tax, helping to generate an estimated £2 billion ($3.2 billion/€2.5 billion) per year for HMRC.