Amazon, Starbucks and Southport Leisure PLC are the names of just a few companies who have dodged tax in recent times. The only difference is that the latter is based in a small town in the North-West of England, while the other two are large multi-national corporations.
Yet, it is Southport Leisure PLC that features on HMRC’s new list of “deliberate tax defaulters” for errors in their tax returns or purposely failing to comply with tax obligations.
The government’s latest attempt to show it is cracking down on tax evaders is a gimmick to say the least. A list to name and shame companies dodging tax is no doubt a great idea, but when the fines levied range from £11,000 to almost £300,000, the whole idea seems laughable.
The Treasury loses about £5bn a year due to tax dodgers, according to Margaret Hodge, chair of the Commons public accounts committee. Going after the little fish is in no way going to make up this deficit.
HMRC’s attempt to name and shame tax evading companies is the right move, but with companies paying fines as small as £10,986.36, the effort seems wasted.
Starbucks reportedly paid £8.6m in corporation tax in the UK over 14 years. Online retail giant Amazon generated sales of more than £3.3bn in the UK last year but paid no corporation tax on any of the profits, and is under investigation by the UK tax authorities.
With multinational corporations finding ways to evade tax through basing their headquarters in Luxembourg in the case of Amazon or other means of filing losses like Starbucks has done, HMRC need to find ways to tackle these complex schemes instead of fighting small businesses in tiny towns.
A name and shame list is a good idea, but in its current form, you can’t help but feel that the bosses of the big corporations are sitting back in their swish offices in Europe laughing away.