Cable calls for crackdown on corporate tax abuse
The Secretary of State for Business, Innovation and Skills, Dr Vince Cable, has announced that the government intends to come to grips with companies suspected of corporate tax avoidance.
Cable, speaking on The Andrew Marr Show on Sunday, admitted that he was doubtful about claims by multinational companies that they did not make a profit in the UK, and therefore should not be liable to taxation.
In addition, Cable said that the regulatory powers of authorities investigating corporations that are providing dubious tax information to the exchequer, would be strengthened.
It has recently surfaced that a number of multinational companies trading in the UK, including Starbucks, Amazon, Google, and Facebook, have been paying extremely low rates of corporate tax. It is alleged that these companies have been engaging in aggressive tax avoidance, by hiding profits on their balance sheets and siphoning off surpluses to offices based in tax havens.
Corporate bosses were grilled last Monday by MPs on the public accounts committee, who expressed frustration and incredulity at Starbucks’ £33 million of declared losses over the past few years.
The Business Secretary stated that while “we need inward investments from companies, when they have profits they need to pay taxes”, and that “there’s nothing more galling to small and medium companies than them having to pay taxes to this country, and these people finding ways of dodging it”.
Cable described instances of corporate tax avoidance as “systematic abuse”, and agreed to suggestions that it is grotesque.
Alluding to a crackdown, he outlined that there were two ways of doing this: by encouraging Inland Revenue to make in-depth investigations and emphasising the need for the state to “beef-up” its powers relating to corporate tax avoidance.
He also said that the UK would consider more international co-operation on taxation issues, such as the recent agreement reached with Germany on joint approaches to dealing with international tax havens.
The former Lib Dem deputy leader indicated that the taxation issues will be confronted by the cabinet in the coming weeks.