U.K. Lawmakers to Question Execs in Tax Dodging Probe

Search form

U.K. Lawmakers to Question Execs in Tax Dodging Probe

U.K. Lawmakers to Question Execs in Tax Dodging Probe
Wed, 11/14/2012
This article originally appeared on Reuters

LONDON (Reuters) - U.K. lawmakers will quiz executives of Starbucks, Google and Amazon about how they have managed to pay only small amounts of tax in Britain while racking up billions of dollars worth of sales here.

The Public Accounts Committee (PAC), which is charged with monitoring government financial affairs, has invited the companies to give evidence amid mounting public and political concern about tax avoidance by big international companies.

"It is hard for the ordinary person to believe it's fair," said Margaret Hodge, a member of parliament for the opposition Labour party and chairman of PAC.

"It makes people incredibly angry in the current fiscal climate," she added, in reference to the austerity measures which large budget deficits have forced on the U.K., and other countries.

Britain and Germany last week announced plans to push the Group of 20 economic powers to make multinational companies pay their "fair share" of taxes following reports of large firms exploiting loopholes to avoid taxes.

A Reuters report last month showed that Starbucks had paid no corporation, or income, tax in the UK in the past three years.

The world's biggest coffee chain paid only 8.6 million pounds ($13.74 million) in total U.K. tax over 13 years during which it recorded sales of 3.1 billion pounds.

Campaign group UK Uncut, which is opposed to government austerity measures and which has organized protests against British telecom operator Vodafone and pharmacist Boots over their tax practices, said in a statement on Monday that they planned to target Starbucks.

In response, Starbucks said it followed the tax rules in every country where it operates and sought to pay its fair share of taxes. "We are committed to being transparent on this issue and look forward to appearing before this committee," a spokeswoman said.

Starbucks Chief Financial Officer Tory Alstead will give evidence to the committee, as will Matt Brittin, Chief Executive Officer of Google U.K., and Andrew Cecil, Brussels-based Director of Public Policy for Amazon, a PAC spokesman said.

Google's filings show it had $4 billion of sales in the UK last year, but despite having a group-wide profit margin of 33 percent, its main U.K. unit had a tax charge of just 3.4 million pounds in 2011.

The company avoids U.K. tax by channeling non-U.S. sales via an Irish unit, an arrangement that allowed it to pay taxes at a rate of 3.2 percent on non-U.S. profits. Amazon's main UK unit paid less than 1 million pounds in income tax last year. The company had U.K. sales worth $5.3 to 7.2 billion, filings show.

Amazon avoids U.K. taxes by reporting European sales through a Luxembourg-based unit. This structure allowed it to pay a tax rate of 11 percent on foreign profits last year - less than half the average corporate income tax rate in its major markets.

Google declined to comment. Amazon did not respond to requests for comment.

Hodge and former financial services minister Paul Myners told the Sunday Telegraph newspaper that the government should consider a new revenue-based tax to ensure profits from U.K. sales didn't go offshore.

Article Tabs

A new in-depth report has revealed the influence the government-industry revolving door has had on Big Oil's ability to obtain four liquefied natural gas export permits since 2012 from the Obama Administration.

Forces both inside and outside the traditional labor movement united to campaign for a higher minimum wage for hotel workers in Los Angeles.

The Crosscheck purge list swamped GOP Senate margins in Alaska and Georgia, and likely provided the victory margins for GOP gubernatorial victories in Kansas and Massachusetts.

Among other human health and environmental violations, the TPP agreement will facilitate harsh legislation that further restricts free speech, privacy and innovation.

Attending Bilderberg is not a guarantee for holding high office – but it can often support a rapid rise to state power for politicians who impress the members and guests at the annual meetings.

Raleigh resident Bibi Bowman says the fact that a police officer called her and told her to take down a Facebook post is an invasion of her privacy and a thinly-veiled attempt to intimidate her into silence.

Posted 4 days 20 hours ago

Among other human health and environmental violations, the TPP agreement will facilitate harsh legislation that further restricts free speech, privacy and innovation.

Posted 2 days 21 hours ago

Attending Bilderberg is not a guarantee for holding high office – but it can often support a rapid rise to state power for politicians who impress the members and guests at the annual meetings.

Posted 2 days 21 hours ago
Ferguson, Mo., Darren Wilson, Michael Brown, protest

On August 9, Ferguson police officer Darren Wilson shot a black teenager named Mike Brown. Since then, the city has been protesting.

Posted 4 days 20 hours ago

A new Financial Times survey shows the majority of UK voters believe that instead of using harsh public cuts to peel back the deficit, other forms of extravagant government spending should be abolished.

Posted 3 days 21 hours ago
Ferguson, Mo., Darren Wilson, Michael Brown, protest

On August 9, Ferguson police officer Darren Wilson shot a black teenager named Mike Brown. Since then, the city has been protesting.

pipeline protests, Kinder Morgan, tar sands, tar sands pipeline, Burnaby, #BurnabyMountain

Standing on the side of the protesters, Burnaby Mayor Derek Corrigan vowed to wage war against fossil fuel giant Kinder Morgan.

We are educating each other, we are learning from each other, we are supporting each other in this cavernous journey for justice and the “hope” that our system of laws will not continue to betray us.

Students are rejecting a proposed tuition hike that would raise their costs by more than $3,300 over the next five years.

Among other human health and environmental violations, the TPP agreement will facilitate harsh legislation that further restricts free speech, privacy and innovation.

Sign Up