Google, Amazon and Starbucks have all been labeled as “immoral” by a committee of MPs from the UK who have said that these companies use complex methods and structures to avoid paying any tax on profits made while operating in Britain.
The report which was issued today by the Commons Public Accounts Committee said that it was not only the businesses that were failing to contribute to Britain but the HM Revenue & Customs was also to blame for the situation because they were being “way too lenient”.
The British government is now being called to create changes to laws to ensure that any loop holes that been used by the companies in the past are closed while it has also been suggested that all the companies responsible for paying very little tax in Britain should be named and shamed.
To help the mission to collect all the unpaid taxes from companies avoiding payments in the UK the Chancellor George Osbourne is expected to announce today an extra 77 million pounds in funding for Revenue and Customs in the UK. This money will be given over the next two years to enable the authority to employ more staff which will help to gather in more taxes in the UK.
Margaret Hodge, the chair of the committee said that the report had shown that big companies in the UK had been “ripping off” tax payers.
She said: “Global corporations with huge operations in the UK generating significant amounts of income are getting away with paying little or no corporation tax here. This is an insult to British business 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.
“The inescapable conclusion is that multinationals are using structures and exploiting current tax legislation to move offshore profits that are clearly generated from economic activity in the UK.”
According to reports Google had 2.5 billion pounds of sales in the UK last year but paid 4.4 million in taxes.
It is said that Google are able to avoid paying taxed in the UK by routing sales through Ireland and Bermuda.
But it will be up to Revenue and Customs staff to start to take a much harder approach to gathering taxes if asny new plans by the British government are to succeed against huge international companies such as Google.
The report said: “Top official need to challenge the status quo and be more assertive, for example in accepting the excessive levels of royalty payments are appropriate when businesses are making a loss.”