Foreign companies like Starbucks and Amazon which have avoided paying large corporation tax bills in Britain lack “moral scruples”, David Cameron has said.
The Prime Minister said he was going to make “damn sure” that foreign companies like Starbucks and Amazon which have been found to avoid legally paying a large corporation tax in the UK paid their fair share.
This is risible. Firstly, the government is taking no steps to challenge these companies. The General Anti-Tax Avoidance Principle Bill that Michael Meacher MP put before the House of Commons and which I drafted would let them do that, but the government has opposed it.
The government’s own general anti-abuse rule specifically does not challenge normal commercial arrangements and tax planning – which no doubt these are. So we can say with certainty that nothing will happen to recover this tax based on current proposals.
What we can also say is that far from making this sort of abuse easier the government is encouraging it. The territorial basis for UK taxation that it has adopted – which means the UK now turns a blind eye to and does not tax the earnings of multinational corporations arising outside the UK – means that every encouragement is now being given to every UK based company to shift their earnings out of the UK just as Starbucks, Amazon and Google are doing. They can then ship them back in from whichever tax haven the relocate the profit to tax free. Tax abuse does not get simpler than that and it is all happening with the encouragement of this government So far from tackling this abuse, Cameron’s government is doing its utmost to encourage and spread it.
Third – the UK is asking the OECD at ways to tackle this issue. It has given it just £120,000 to do so. I think we can safely tell from that how serious he is.
The man is a complete hypocrite. If any lacks moral scruples on this issue it is David Cameron. And we’re all paying more tax as a result, and it’s his fault.