Current tax rules ‘combat’ tax avoidance and HMRC employs specialists to ensure that multinationals play by the rules, the department has told Tax Journal after the chairman of the Commons public accounts committee said she would question HMRC officials about why Accenture paid ‘such a low rate’ of corporation tax in the UK.
‘It is absolutely absurd if HMRC are doing business with companies that are not paying their fair share of tax,’ Margaret Hodge told the Sunday Times last week.
As Tax Journal reported late on Tuesday, Accenture UK – a key provider of IT development services to HMRC – was reported to have reduced its corporation tax bill to [the equivalent of] ‘3.5% of its profits’.
Tax avoidance is legal, and there is no suggestion that Accenture UK has broken any laws. But the company declined to answer questions about ‘cost of sales’ and other expenses, not itemised in the accounts, which amounted to 96% of the turnover of £2bn. The August 2011 accounts state that the company’s immediate parent company is incorporated in Luxembourg, and the company’s ultimate parent company is incorporated in Ireland. An Accenture UK spokesman said: ‘Accenture pays tax in accordance with the tax legislation of each country in which it operates.’
An HMRC spokesman told Tax Journal late yesterday: ‘For legal reasons we cannot comment on the tax affairs of individual businesses, but we make sure that multinationals pay the tax due to the UK in accordance with UK tax law. Our tax rules combat tax avoidance and we employ specialist tax professionals to ensure that multinationals play by the rules.’
HMRC’s chief executive Lin Homer is set to appear before the public accounts committee next Thursday, 6 December, on the morning after George Osborne delivers his autumn statement.
Current tax rules ‘combat’ tax avoidance and HMRC employs specialists to ensure that multinationals play by the rules, the department has told Tax Journal after the chairman of the Commons public accounts committee said she would question HMRC officials about why Accenture paid ‘such a low rate’ of corporation tax in the UK.
‘It is absolutely absurd if HMRC are doing business with companies that are not paying their fair share of tax,’ Margaret Hodge told the Sunday Times last week.
As Tax Journal reported late on Tuesday, Accenture UK – a key provider of IT development services to HMRC – was reported to have reduced its corporation tax bill to [the equivalent of] ‘3.5% of its profits’.
Tax avoidance is legal, and there is no suggestion that Accenture UK has broken any laws. But the company declined to answer questions about ‘cost of sales’ and other expenses, not itemised in the accounts, which amounted to 96% of the turnover of £2bn. The August 2011 accounts state that the company’s immediate parent company is incorporated in Luxembourg, and the company’s ultimate parent company is incorporated in Ireland. An Accenture UK spokesman said: ‘Accenture pays tax in accordance with the tax legislation of each country in which it operates.’
An HMRC spokesman told Tax Journal late yesterday: ‘For legal reasons we cannot comment on the tax affairs of individual businesses, but we make sure that multinationals pay the tax due to the UK in accordance with UK tax law. Our tax rules combat tax avoidance and we employ specialist tax professionals to ensure that multinationals play by the rules.’
HMRC’s chief executive Lin Homer is set to appear before the public accounts committee next Thursday, 6 December, on the morning after George Osborne delivers his autumn statement.
