MY work on the public accounts committee of the House of Commons is without doubt the most influential contribution I make as a Member of Parliament.
This week we published our report on the taxation of global companies and the ways in which they evade tax.
We looked specifically at Google, Starbucks and Amazon, although it is fair to say these are not the only offenders.
In the case of Starbucks, we were told the chain has made a loss virtually every year they have had a presence in the UK.
It was insulting to our intelligence that we were expected to believe they were investing aggressively in the UK market while at the same time making no profits.
What Starbucks have is a method of buying their coffee in Amsterdam and selling on to the UK at a premium, which means the profits are registered in Holland even though the sales are generated here in the UK.
But Starbucks isn’t the worst offender. Amazon routes all its UK sales through a warehouse in Slough.
However, it books its profits through Luxembourg, thus evading UK tax. It isn’t fair to UK taxcpayers that these firms are able to do this and we are calling on HMRC to be more aggressive in tackling these loopholes and challenging firms through the courts. But we need to learn lessons.
We need to make sure our tax system is competitive, or we encourage this sort of behaviour.
These companies have lawyers and accountants who are always ahead of the taxman. If taxes are too high, the tax take is reduced as businesses go elsewhere.
The best example of this is Google. When it searched for somewhere to make its European base, the UK should have topped the list as an English speaking nation. But the terms on which it was invited to Ireland were far more generous and that is where it went.
There is a role we can all play in forcing companies to pay their fair share of tax – by using our power as consumers.
Starbucks has already buckled – faced with the prospect of losing customers it has agreed to pay more tax.
This is usually the best time of year for Amazon. Why not send it a message by going to the High Street or Lakeside instead?
WHSmith and HMV have some great bargains and you can buy them confident that they pay their taxes.
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