Senior Liberal Democrats are drawing up plans for a new levy on Starbucks, Amazon and other global businesses that pay low levels of tax on their British operations.
Starbucks, Amazon, the online
retailer, and Google, the search engine, all stress that they comply with all UK
tax laws
The Telegraph 19 Jan 2013
As part of preparation for this year’s Budget negotiations, Lib Dems are
looking to introduce a minimum tax charge on multinationals based on their
global profits.
Tim Farron, the party’s president, said the charge would address the “natural
outrage” many British people have felt at how little some multinationals
contribute to the public finances.
“We are looking at a minimum tax on a company’s global profits,” said Mr
Farron. “If these companies are structuring their affairs in a way that means
they make no profit in the UK, then it’s right to look at the global profit
figure – that is made public.”
He added that the idea was at an early stage but was being discussed by
several other senior Lib Dems.
Mr Farron said he thought a rate of around 25 per cent on the profits a
business made in the UK would be “about right”, but the details had not been
set.
Starbucks paid no UK corporation tax last year despite sales of nearly £400 million.
The coffee chain has legally minimised its tax liability using inter-group transfer since it came to the UK 14 years ago, but this year agreed to make a payment of £20 million to HM Revenue and Customs.
Critics may argue that the policy will make the UK less attractive to global firms. Starbucks, Amazon, the online retailer, and Google, the search engine, all stress that they comply with all UK tax laws and that they pay significant amounts of National Insurance and other taxes on their operations here.
Nevertheless, such a charge may capture the public mood. Starbucks has endured an embarrassing public boycott since details of how little Corporation Tax it pays in the UK was revealed last year.
Vince Cable, the Lib Dem Business Secretary, told The Sunday Telegraph that a minimum tax rate for big business was “an interesting idea that should be looked at”, but added that his priority remained ensuring that this year’s Budget included a Mansion Tax.
“Over the coming months there will be discussions with the Treasury about introducing a general tax avoidance rule that could apply to businesses,” Mr Cable added.
“However, I remain most interested in the Mansion Tax – there is a lot of value locked up in property and it would be a tax that would be hard to avoid.
"The Conservatives still oppose this plan, but I will certainly have another go at getting this into the Budget.”
Starbucks paid no UK corporation tax last year despite sales of nearly £400 million.
The coffee chain has legally minimised its tax liability using inter-group transfer since it came to the UK 14 years ago, but this year agreed to make a payment of £20 million to HM Revenue and Customs.
Critics may argue that the policy will make the UK less attractive to global firms. Starbucks, Amazon, the online retailer, and Google, the search engine, all stress that they comply with all UK tax laws and that they pay significant amounts of National Insurance and other taxes on their operations here.
Nevertheless, such a charge may capture the public mood. Starbucks has endured an embarrassing public boycott since details of how little Corporation Tax it pays in the UK was revealed last year.
Vince Cable, the Lib Dem Business Secretary, told The Sunday Telegraph that a minimum tax rate for big business was “an interesting idea that should be looked at”, but added that his priority remained ensuring that this year’s Budget included a Mansion Tax.
“Over the coming months there will be discussions with the Treasury about introducing a general tax avoidance rule that could apply to businesses,” Mr Cable added.
“However, I remain most interested in the Mansion Tax – there is a lot of value locked up in property and it would be a tax that would be hard to avoid.
"The Conservatives still oppose this plan, but I will certainly have another go at getting this into the Budget.”
