My thanks to a loyal reader who pointed us to a rather interesting article in Private Eye, that exposes the hypocrisy of the government/PAC wrt tax avoidance practised by multinationals.
On the one hand the government/PAC lambastes these companies for not paying "enough" tax, yet on the other hand the government pays them vast sums of taxpayer money for government contracts.
As per Private Eye:
"Across the board the position is clear enough. The companies to which British taxpayers hand over billions every year for questionable IT services are paying peanuts to the government in tax on their ample profits."Included within Private Eye's list of companies are the Aspire consortium (paid approximately £800M per annum by HMRC).
Within the consortium Fujitsu (which is paid by HMRC to run its ICT) paid £10M tax on its profits over the last four years on turnover of £9BN, and Capgemini, which doesn’t disclose details of actual payments, shows tax credits in recent years, indicating no tax payments at all. Their absence is accounted for by profit margins way below the group’s worldwide performance, and tax relief for pensions costs and research spending.
Tax avoidance is perfectly legal. However, it is hypocritical of the government/PAC to lambaste companies for practising it yet at the same time rewarding them with taxpayers' money for government contracts.
Tax does have to be taxing.
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