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Cameron urges global action on corporate tax avoidance

by Daniel Grote on Jan 25, 2013 at 08:50

Cameron urges global action on corporate tax avoidance

Prime minister David Cameron has said a clampdown on aggressive tax avoidance by companies will be on the key aims of Britain’s G8 presidency.

In a swipe at Starbucks, which paid just £8.6 million in corporation tax over the last 14 years before agreeing to pay an extra £20 million, he said: ‘Companies need to wake up and smell the coffee, because the customers who buy from have had enough.’

Speaking at the World Economic Forum in Davos, he said that a global crackdown was needed to counter aggressive corporate tax avoidance.

‘Some forms of avoidance have become so aggressive that I think it’s time to call for more responsibility and for governments to act accordingly,’ he said.

‘In the UK we’ve already committed hundreds of millions into this effort – but acting alone has its limits. Clamp down in one country and the travelling caravan of lawyers, accountants and financial gurus just moves on elsewhere. We need to act together at the G8.’

5 comments so far. Why not have your say?

John Whipple

Jan 25, 2013 at 10:25

Like say:-

GE 2010 declared profit $5.1 billion US tax paid 0$ US.

GE 2011 declared profit $14 billion US tax paid 0$ US.

Find out who is GE VP tax specialist.

You might be surprised.

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Sam Caunt

Jan 25, 2013 at 11:14

As someone who has recently signed a meaty Corporation Tax cheque to HMRC, I find it reprehensible that firms get away with paying little Corporation Tax. I forget the actual figures but the top FTSE 100 companies argued that they still contribute more to the economy even if they are paying less in CT since under Cameron business costs (i.e. taxes) have far exceeded the fall in Corporation Tax. I am not sure this was a defence for paying less Corporation Tax through ingenious accounting methods rather than an attack on rising business costs like NI, VAT, rates etc. but for many IFAs we not only have the same costs, but regulatory costs which are doubling each year and still pay full whack Corporation Tax!

Nice one Mr Cameron, jump on the band wagon of public indignation but you need to look more closely at how profitable it is to do business in this country first.

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Blue Eyed Monster

Jan 25, 2013 at 12:39

@ Sam Caunt

Really surprised to hear an IFA paid meaty Corporation tax.

Have you run out of legitimate mitigating facilities?

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£Geo via mobile

Jan 26, 2013 at 11:32

Mr Cameron should start by looking at the transfer pricing activities of multinational corporations and the army of accountants that assist in this. That's how they shift profits to low tax jurisdictions.

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Steven Farrall 2

Jan 27, 2013 at 13:06

Deep sigh. This is simple political posturing by Dave. And it is also untrue. It is the absolute right of anyone to trade from wherever he wants to. And if that person chooses a jurisdiction that has a double taxation agreement with the UK he can choose whether to pay UK or the other jurisdiction's tax. Furthermore there is a direct and provable inverse relationship between AT and CT. When VAT goes up, CT goes down. And, Starbucks for example, pays shed loads of tax here, VAT, Payroll taxes, all the tax that its suppliers pay etc etc. Lastly, Starbucks, or us come to that do not pay tax, our ultimate clients pay all our tax. That is tax is always paid by the last person in the chain, the least elastic factor of production.

So Sam's 'meaty CT cheque' was simply him passing on his client's money.

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