Cameron questions royalty payments as he tells companies that ‘you’ve got to play fair by us’
David Cameron has pledged to make ‘damn sure’ that multinationals seeking to avoid paying UK corporation tax ‘play fair’.
Cameron was asked why ‘Starbucks and Amazon’ were allowed to avoid paying large corporation tax bills given that they have a large presence in the UK, according to the Daily Telegraph.
He told a business audience in Lancashire on Friday: ‘We’ve got to crack that, you’re absolutely right. This is a really important issue. We’re saying, are going to have a really low rate of corporation tax but I want to make damn sure that those companies pay it.’
Cameron added: ‘We do need a debate in this country, not only [about] what is against the law – that’s tax evasion, that is against the law, that’s illegal and if you do that [HMRC] will come down on you like a tonne of bricks – but what is unacceptable in terms of really aggressive tax avoidance.’
Video footage published by the Lancashire Evening Post showed Cameron telling his audience: ‘Some people say to me “well, it’s all within the law – you’re obeying the law, it’s okay”. Well, actually there are lots of things that are within the law that we don’t do because actually we have some moral scruples about them and I think we need this debate about tax too.
‘I’m not asking people to pay massive rates of tax. We’ve got a low top rate of income tax now, we’ve got a low rate of corporation tax now, we are a fair tax country. But I think it’s fair then to say to business, you know, we’re playing fair by you – you’ve got to play fair by us.’
Cameron said he had put the issue ‘right at the top of the agenda for the G8 this year’ as well as ‘making sure we fix it nationally too’.
Royalties
The Telegraph quoted Cameron as saying: ‘It’s simply not fair and not right what some [companies] are doing by saying, I’ve got lots of sales here in the UK but I’m going to pay a sort of royalty fee to another company that I own in another country that has some special tax dispensation.
‘That’s not right, and so we are looking at it. I’m chairing the G8 this year so I’m going to be getting the Americans and the French and the Germans and the Italians and the Japanese all to look at this together at how can we try and stop unfair tax farming practices.’
‘Using the letter of tax laws … to immorally minimise their tax obligations’
MPs on the Commons public accounts committee reported last month: ‘[Starbucks, Amazon and Google] accepted that profits should be taxed in the countries where the economic activity, that drives those profits, takes place and that, alongside their duty to their shareholders, they had obligations to the society, from which they derive their profits, which included paying tax.
‘However, we were not convinced that their actions, in using the letter of tax laws both nationally and internationally to immorally minimise their tax obligations, are defensible. They all accepted that the perceived ethical behaviour of corporations could affect consumer behaviour.’
All three companies had defended their companies’ tax arrangements when they were questioned by the PAC in November, but Starbucks subsequently pledged to pay more corporation tax than required by law.
Google’s vice president in Europe Northern and Central, Matt Brittin, told Channel 4 News that ‘the tax we pay is the right amount of tax as defined by the systems that are set up by politicians’. Brittin said he was not ‘immoral’, and was ‘proud of how we operate’.
Cameron questions royalty payments as he tells companies that ‘you’ve got to play fair by us’
David Cameron has pledged to make ‘damn sure’ that multinationals seeking to avoid paying UK corporation tax ‘play fair’.
Cameron was asked why ‘Starbucks and Amazon’ were allowed to avoid paying large corporation tax bills given that they have a large presence in the UK, according to the Daily Telegraph.
He told a business audience in Lancashire on Friday: ‘We’ve got to crack that, you’re absolutely right. This is a really important issue. We’re saying, are going to have a really low rate of corporation tax but I want to make damn sure that those companies pay it.’
Cameron added: ‘We do need a debate in this country, not only [about] what is against the law – that’s tax evasion, that is against the law, that’s illegal and if you do that [HMRC] will come down on you like a tonne of bricks – but what is unacceptable in terms of really aggressive tax avoidance.’
Video footage published by the Lancashire Evening Post showed Cameron telling his audience: ‘Some people say to me “well, it’s all within the law – you’re obeying the law, it’s okay”. Well, actually there are lots of things that are within the law that we don’t do because actually we have some moral scruples about them and I think we need this debate about tax too.
‘I’m not asking people to pay massive rates of tax. We’ve got a low top rate of income tax now, we’ve got a low rate of corporation tax now, we are a fair tax country. But I think it’s fair then to say to business, you know, we’re playing fair by you – you’ve got to play fair by us.’
Cameron said he had put the issue ‘right at the top of the agenda for the G8 this year’ as well as ‘making sure we fix it nationally too’.
Royalties
The Telegraph quoted Cameron as saying: ‘It’s simply not fair and not right what some [companies] are doing by saying, I’ve got lots of sales here in the UK but I’m going to pay a sort of royalty fee to another company that I own in another country that has some special tax dispensation.
‘That’s not right, and so we are looking at it. I’m chairing the G8 this year so I’m going to be getting the Americans and the French and the Germans and the Italians and the Japanese all to look at this together at how can we try and stop unfair tax farming practices.’
‘Using the letter of tax laws … to immorally minimise their tax obligations’
MPs on the Commons public accounts committee reported last month: ‘[Starbucks, Amazon and Google] accepted that profits should be taxed in the countries where the economic activity, that drives those profits, takes place and that, alongside their duty to their shareholders, they had obligations to the society, from which they derive their profits, which included paying tax.
‘However, we were not convinced that their actions, in using the letter of tax laws both nationally and internationally to immorally minimise their tax obligations, are defensible. They all accepted that the perceived ethical behaviour of corporations could affect consumer behaviour.’
All three companies had defended their companies’ tax arrangements when they were questioned by the PAC in November, but Starbucks subsequently pledged to pay more corporation tax than required by law.
Google’s vice president in Europe Northern and Central, Matt Brittin, told Channel 4 News that ‘the tax we pay is the right amount of tax as defined by the systems that are set up by politicians’. Brittin said he was not ‘immoral’, and was ‘proud of how we operate’.
