Tax Avoidance TAX
If you compare this to US chains McDonald’s and KFC, McDonald's paid a tax bill of over £80m on £3.6bn of UK sales, and KFC incurred taxes of £36m on sales worth £1.1bn.
Starbucks appear to not be the only US business avoiding tax; eBay has paid only £1.2m in tax in the UK, according to an investigation by the Sunday Times. eBay had sales of £789m during 2010 in the UK at its four British subsidiaries, leading to corporation tax owed of £51m. Instead, it paid £1.2m.
Google has also been shown to have paid just £6m in tax on a turnover of £395m last year, which led to Labour MP John Mann, a member of the Treasury Select Committee, to criticise the tax avoidance
practices as “entirely improper and immoral”.
These companies paying small amounts of tax has shed light on perfectly legal tactics used by multinationals the world over.
The chief executive of the TaxPayers' Alliance, Matthew Sinclair, said companies exploit loopholes because the UK's tax system is too complicated. He told Sky News: "There has been a succession of companies from high street names to internet giants who, thanks to the labyrinth of our tax system, appear to be paying much less in tax than many people would expect."
In this issue of Finance Monthly, we discuss tax avoidance with experts.
Featuring...
Chas Roy Chowdry (ACCA)
Michael Cashman (Kemp Little LLP)
Miles Dean & Sally Brown
(Milestone International Tax Partners)
Although it is legal, is it moral?
Tax avoidance has been in the news recently, when it was discovered that Starbucks UK has racked up over £3bn in sales since 1998, but shelled out just £8.6m in income taxes, according to new research, and were telling investors the business was profitable, even as it consistently reported losses.
AVOIDANCE
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