Global firms such as Starbucks, Google and Amazon have come under fire for avoiding paying tax on their British sales. There seems to be a growing culture of naming and shaming companies. But what impact does it have?Companies have long had complicated tax structures, but a recent spate of stories has highlighted a number of tax-avoiding firms that are not seen to be playing their part.Starbucks, for example, had sales of £400m in the UK last year, but paid no corporation tax. It transferred some money to a Dutch sister company in royalty payments, bought coffee beans from Switzerland and paid high interest rates to borrow from other parts of the business.Amazon, which had sales in the UK of £3.35bn in 2011, only reported a "tax expense" of £1.8m.And Google's UK unit paid just £6m to the Treasury in 2011 on UK turnover of £395m.Continue reading the main story
The art of paying less tax
Multinationals such as Google, Amazon and Starbucks have been criticised by the Public Accounts Committee over tax avoidanceStung, Starbucks plans to change its arrangements and pay UK corporation taxGlobal firms' tax pay 'an insult'Everything these companies are doing is legal. It's avoidance and not evasion.But the tide of public opinion is visibly turning. Even 10 years ago news of a company minimising its corporation tax would have been more likely to be inside the business pages than on the front page.What changed? And is "shaming" of companies justifiable and effective?Momentum has been growing for the last few years.In September 2009, the Observer ran with the headline: "Avoiding tax robs our public services, declares minister". The paper reported that the government was planning to say tax is a "moral issue" and that it was "determined to end avoidance and evasion."October 2010 - and the Vodafone case - saw the Daily Mail report:"Vodafone closes Oxford Street store at £6bn tax protest".A few months later and the focus moved to Sir Philip Green's business empire. "Crisis? What crisis?" reported the Mail, which said the TopShop boss was "enjoying" a Barbados holiday while thousands of campaigners laid siege to his UK stores.Barclays Bank was the next target - in February 2011 the Daily Express reported on the "raid" by tax protesters, who shouted: "Dave and George do your sums." Later that same month, the Guardian ran with the headline"UK Uncut: 'People are starting to listen to us'".On of proster said: Another impact of tax shaming is that some people, such as 45-year-old self-employed businessman Mike Buckhurst, from Manchester, boycott brands."I've uninstalled Google Chrome and changed my search engine on all my home computers. If I want a coffee I am now going to go to Costa, despite Starbucks being nearer to me, and even though I buy a lot of things online, I am not using Amazon."I'm sick of the 'change the law' comments, I can vote with my feet. I feel very passionate about this because at one point in my life I was a top rate tax payer and I paid my tax in full," he says.
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