Tax avoidance

MARKS & Spencer are the latest high street giant to be accused of serious tax avoidance — along with Starbucks and internet giants Amazon and Google. Nearly every day another well-known company joins the list of those who pay a token amount of tax while raking in billions of pounds from customers in Britain.

The parliamentary Public Accounts Committee heard this week that Google paid £6 million in corporation tax in 2011 despite sales of more than £3 billion annually, as most sales are routed through Dublin.

The giant bank HSBC has an arm entirely given over to advising big business how to avoid tax. Is it any wonder so few companies pay the tax they should? They exist to make as much profit as they can for their shareholders so why on earth would they pay their taxes when it is so easy not to?

Labour leader Ed Miliband last week pledged that if elected he will introduce new laws to curb tax avoidance. He told the Observer the Government had “got to act” on the “massive” issue. He said if no deal was done, he would order multinational firms to be more transparent about the money they make.

Prime Minister Cameron is also making promises to tackle the problem by trying to secure a deal at next month’s G8 summit. Cameron has said he will raise the issue at the G8 to try and prevent multinational companies exploiting tax loopholes.

Yet in the recent past it has been Cameron’s government that has thwarted attempts to set up international regulation that was aimed to close tax loopholes.

And both Labour and the Con-Dem Coalition have consistently cut corporation tax over the last two decades so it is now lower than in most other major capitalist countries. They have been acting on behalf of the City of London and trying to attract the international tax avoiders to London.

Earlier this year, after George Osborne announced a further cut to corporation tax in Britain his 2013 budget, an M&S employee sent an email to a superior questioning the need for the complex operation of Marks & Spencer’s international site, giving their personal view as to why the structure existed:

“Given that it was developed as a means to avoid UK corporation tax when it stood at 26 per cent it now seems appropriate to reassess this,” it read.

“Corporation tax will be 21 per cent by next year. Does this not render many of the advantages of having an Irish company obsolete?

“From a tax management perspective there may have been advantages in avoiding the UK 26 per cent tax rate but the process and IT overhead with the additional VAT complexity may negate these advantages.”

The promises to block the loopholes and make companies pay the tax they should are pure hot air. They have no intention of doing any such thing — but they will go through the motions of pretending to for the benefit of their public image. But there will always be some technicalities why the necessary agreement will either not be reached or if there is an agreement it will be flawed.

And the other G8 leaders will go away relieved they blame each other for the failure and that global capitalism can go on as ever: taking and taking and taking — taking our money, taking our working lives, taking our health, our hopes and our chances of a decent life — and never giving back anything but their contempt for us.

But they are going through this charade because of the efforts and the campaigning of people like the Occupy movement, UK Uncut and others. Their greed is found out and exposed and the charade will not fool us. The relationship between our classes becomes naked greed and oppression on one side and hate and anger on the other. It’s only a matter of time before the explosion comes.