Tax avoidance? It may be simply how corporation tax works, says HMRC

HMRC strives to maintain a level playing field for businesses the department said yesterday in response to recent media reports alleging that some of the largest multinationals structure their businesses to avoid paying their ‘fair share’ of UK tax.

An ‘issue briefing’ titled Taxing the profits of multinational businesses said recent news stories had suggested that some high-profile multinationals ‘do not pay their fair share of corporation tax on the profits they make from their business with UK customers’. HMRC set out to explain that a company that pays less corporation tax than might be expected is not necessarily engaging in tax avoidance.

The briefing was published on the same day that The Independent reported that Facebook had been ‘accused of “disingenuous and immoral” tax avoidance’. An analysis of Facebook’s UK business suggested that it paid ‘just £238 000’ in corporation tax in the UK last...