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Monday, December 03, 2012

Shaming the multi-nationals

A campaign to name and shame multi-national companies who do not pay their fair share in tax looks like it is gaining a head of steam after the House of Commons' Public Accounts Committee (PAC) jumped into the fray.

The Independent reports on the Committee's conclusions that these "immoral" multinational companies should face prosecution rather than being offered sweetheart deals by the UK Government:

The Chancellor, George Osborne, will announce an extra £150m of funding for Her Majesty's Revenue and Customs (HMRC) this week to help crack down on avoidance by global companies with British operations, which the Treasury predicts will raise up to £2bn within two years.

The coffee chain Starbucks, one of the multinational companies accused of tax avoidance, will also announce a deal with the Treasury to pay more on its UK earnings.

But in a hard-hitting report to be released today, the cross-party Public Accounts Committee (PAC) calls for the Government to take an even tougher line. It says legislative change is needed to ensure that multinationals report their tax practices transparently, and with prosecutions rather than deals for companies found to be avoiding tax. Offenders, it says, should be publicly named and shamed.

The PAC said it had been unhappy with the "unconvincing, and in some cases evasive" evidence it had received from representatives of Starbucks, Google and Amazon who were called in front of the committee last month to defend their tax affairs.

It said there was currently "a complete lack of transparency" about why multinationals paid so little UK corporation tax. Their operations were structured in ways that were impenetrable to the public, while HMRC disclosed very little about its approach to collecting tax from them.

The PAC report concludes: "HMRC needs a change in mindset in the way it approaches collecting tax from multinationals.

"At the moment there is a pervasive acceptance of the status quo by the top officials in HMRC and we have seen little evidence of a desire to be more assertive. We expect HMRC to prosecute multinational companies who do not pay the tax due in the UK."

Let's hope that the Government takes some notice.
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