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

The coalition was set to deliver more than 200,000 signatures to the White House, Department of Homeland Security and Department of Justice, calling for transparency and justice in police killings.

Divestment is less about denying fossil fuel companies the financial resources to operate – it's more about denying them reputation, legitimacy and “social license.”

Americans greatly underestimate the degree of inequality in our country – and if we were given proper media coverage of the endless takeaway of wealth by the super rich, we'd be taking it personally.

Wealthy people are often so isolated from the rest of us, many of them have forgotten how rich they really are.

Two political philosophers, Sheldon Wolin and John Ralson Saul, call for mass movements willing to carry out repeated acts of civil disobedience to disrupt and delegitimize corporate power.

Florida has the highest foreclosure rate in the U.S. in the first quarter of 2014, and also has a "foreclosure king" who is now disbarred for his failure to oversee employees accused of carrying out wrongful foreclosures.

Posted 5 days 16 hours ago

The city's social justice roots are centuries old – and today Seattle is also home to more than 70 social justice organizations and more than a dozen progressive film festivals.

Posted 3 days 17 hours ago

This isn't just a right to revolt, it's a call to revolt, an outright slam against apathy and nonresistance.

Posted 4 days 15 hours ago

Large corporations are the winners and taxpayers are the losers when transparency, accountability and the public interest are sold out to for-profit firms.

Posted 3 days 17 hours ago

"Peoples' movements will either succeed in transforming our economic and political systems to build a new world, or we will burn with the old one."

Posted 5 days 16 hours ago

The banks have exclusive access to more than 214,000 federal inmates under exclusive contracts awarded by the U.S. Treasury Department about 15 years ago

On Sunday, hundreds of people milled around a protest site in the gentrifying, densely-populated district Mong Kok, manning aid stations and sitting in small circles on the pavement.

Inequality is all anybody can talk about, except Democrats on the campaign trail who desperately need to turn out the very people so disproportionately affected by it: young and minority voters.

Wealthy people are often so isolated from the rest of us, many of them have forgotten how rich they really are.

"Peoples' movements will either succeed in transforming our economic and political systems to build a new world, or we will burn with the old one."

Sign Up