Savco FC Will Be Furious!

http://news.uk.msn.com/uk/firms-accused-over-tax-avoidance

Starbucks, Google and Amazon have been accused of "immorally" minimising their UK tax bills in a damning report by a spending watchdog.

The Public Accounts Committee (PAC) criticised the companies for the "unconvincing and, in some cases, evasive" evidence they gave on why their corporation tax payments are so low.

MPs warned there are many multinationals exploiting tax laws to move offshore profits that are clearly generated in the UK and called on the Government to "get a grip".

It accused HM Revenue and Customs of looking "way too lenient" over the way it deals with big name firms who are "getting away with" paying little or no corporation tax. The PAC criticised HMRC for undermining the system because it was "selective" in its prosecutions and warned smaller companies could feel victimised.

Committee chairwoman Margaret Hodge 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. HMRC also lacked clarity when trying to explain its approach to enforcing the corporation tax regime. 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."

Starbucks told MPs it had made a loss for 14 of the 15 years it has operated in the UK, making just a small profit in 2006. In its report the committee said it found that claim "difficult to believe" and said it was "inconsistent" with claims the company was making about its success to shareholders.

MPs rounded on Amazon's representative, saying they were left frustrated because he was "evasive and unprepared to answer legitimate questions". While the company had a UK operation involving 15,000 staff it pays little corporation tax in the UK. It said the company's UK website reported a turnover of £207 million for 2011 but its tax expense was just £1.8 million. The report said Google accepted profits should be taxed in the countries where they are generated but "undermined its own argument" because it remits its non-US profits, including from the UK, to Bermuda, which has an advantageous tax regime.

Matthew Sinclair of the TaxPayers' Alliance said: "Many taxpayers are angry seeing major international companies reduce their tax liability by taking advantage of the loopholes and reliefs which few ordinary taxpayers and British businesses can use. However it is politicians themselves who have created the complicated tax code which people can exploit. Draconian punishments for arrangements which the law doesn't specifically prohibit would be unjust and impractical. If politicians are serious about doing something then they need to reform the tax system."

A spokesman for HMRC 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 £29 billion additional revenues from large businesses in the last six years, including £4.1 billion in the last four years from transfer pricing enquiries alone. These figures speak for themselves. Corporation tax receipts are dependent on the wider economy and the corporation tax rate set by Parliament, which was reduced by 2 percentage points for 2011-12."