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Press watch: big-name companies under fire for avoidance

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Google: ‘A former Google executive has blown the whistle on a massive and “immoral” tax avoidance scheme that has “cheated” British taxpayers out of hundreds of millions of pounds over the past decade. Barney Jones, 34, has lifted the lid on an elaborate structure which diverts British profits through Ireland to the Bermuda tax haven. Although Google’s London sales staff would negotiate and sign contracts with British customers, and cash was paid into a UK bank account, deals were technically booked through its Dublin office to minimise its liabilities here. Jones is ready to hand over a cache of more than 100,000 emails and documents to HMRC, detailing the “concocted scheme.”

The Sunday Times, 19 May 2013

Apple: ‘Apple would have paid a tax rate of about 15% last year, far below the 25.2% it reported, had it not used a form of reserve accounting that sets it apart from other big US technology companies. The rare accounting treatment has helped to distract attention from Apple at a time when the tax-avoidance strategies of other cash-rich US tech companies, have come under public attack, according to tax experts … [Apple chief executive Tim Cook] insisted last week that Apple paid all the US taxes it was liable for and “does not funnel its domestic profits overseas”’.

Financial Times, 19 May 2013

M&S: ‘Marks & Spencer has become the latest in a string of UK companies to face criticism from tax campaigners over the way it structures its online sales to Europe … the [online] structure involves shipping goods from one country – the UK – while invoicing the transaction to another – Ireland.
‘Earlier this year … an M&S employee sent an email to a superior questioning the need for the complex operation of Marks & Spencer’s international site: “Given that it was developed as a means to avoid UK corporation tax when it stood at 26% it now seems appropriate to reassess this … From a tax management perspective there may have been advantages in avoiding the UK 26% tax rate but the process and IT overhead with the additional VAT complexity may negate these advantages. Needless to say there is also the reputational damage to M&S should it be seen to be avoiding UK tax in the current climate.”
‘Marks & Spencer said Ireland was used to host the website as it was the largest international market for M&S, and therefore the logical host for the EU site.

’The Guardian, 19 May 2013

Issue: 1170
Categories: News , Corporate taxes