Anorak | Google, Facebook, Starbucks: The Guardian on how much UK tax corporates pay

Google, Facebook, Starbucks: The Guardian on how much UK tax corporates pay

by | 17th, October 2012

THIS is obviously part of a coordinated effort to get something or other changed. The constant drip drip of stories about how much tax multi-national companies are paying in the UK. There are however two basic faults with the whole idea that is being pursued. The first is clear and evident in this Guardian piece :

We got the data via Duedil, which has made getting hold of financial information from company reports an art. The group of companies – and you can download and explore the data below – have a combined turnover between 2008 and 2011 of £116.4bn. They declared total profits before tax of £5bn – and paid taxes of £1.5bn.

Many of the famous names have declared losses: Starbucks says it lost £32m in 2011, Google lost £20.7m and Facebook lost £13.9m. Explore the data below – we’ve included total turnover, the profit declared before tax and the actual tax paid, for every year from 2008 to 2011.

Turnover is simply irrelevant because corporation tax isn’t due or paid on turnover. It’s due on profits. And if a company doesn’t make a profit then no tax is due. It really is that simple.

The other problem is when people start looking at Google and Facebook selling from Ireland. Or Amazon and Apple from Luxembourg. There’s the claim that if they sell into the UK then they should pay tax in the UK. Which is, I’m afraid, just nonsense.

Everyone agrees that what these companies are doing is legal. So it’s definitely not tax evasion. The claim is however that this is tax avoidance. The companies are using the law in ways which those who made the laws didn’t want them or expect them to do.

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Posted: 17th, October 2012 | In: Money Comments (3) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink