IT companies now accused of taxation immorality
In close pursuit of the 'moral' outrage caused by companies such as Amazon, Google and Starbucks arranging their tax affairs in a legal manner so as to reduce their UK corporation tax bills, comes an accusation that a group of ten technology companies are also involved in tax avoidance.
Charlie Elphicke, Conservative MP for Dover and a former tax lawyer, raised the issue of “tax avoidance on an industrial scale” in a recent House of Commons debate. He accuses the likes of IBM, Microsoft, Symantec, Dell, Oracle and CSC Computer Sciences of materially underpaying UK corporation tax.
Elphicke told the Commons that the afore-mentioned companies paid over to HMRC a total of £78 million on income of £17.5 billion rather than the £879 million that the Tory MP has calculated – a deficit of more than £800 million.
According to Elphicke, all the companies have government contracts from which they receive substantial sums of public money, amounting to £1.8 billion in revenue during the last year.
In comments to The Times, Elphicke described the situation as “irresponsible, unethical and unacceptable”, although he has made it clear that the companies have done nothing illegal in reducing their tax liabilities.
He went on to say, "When awarding government contracts, we should weigh the amount of taxpayers' money shelled out against the amount of corporation tax paid by government contractors. This would help level out the playing field between tax-paying UK companies and tax-avoiding companies from overseas”.
No doubt the debate about tax and ethics will continue to be waged by MP's and the media alike throughout the course of 2013 as the UK continues its economic struggle, with both groups seeking to claim the moral high ground. Must be time for Margaret Hodge the Tax Avenger to have another pop!
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