To: Rishi Sunak, The Chancellor of the Exchequer
Curtail corporate tax avoidance
Change the law and regulations that allow large companies to benefit from tax avoidance activities.
Deploy more government resources to actively recover tax revenue from large corporations
Why is this important?
The Office for Budget Responsibility estimates that The Chancellor of the Exchequer will have to borrow £300bn to pay for the economic actions taken to address Covid-19. [1]
A freeze of public sector workers would be a snub to those workers who risked their own lives and lives of their families to keep us all safe and society ticking over in these unprecedented times.
Public sector workers should not have to bear the brunt of the UKs economic recovery actions when revenue from Tax Avoidance actions taken by large corporations would provide annual and sustainable increases in funds available to the UK government.
Profits for large corporations should be capped until the money borrowed to support them during Covid-19 has been repaid in full.
In 2018 Netflix clocked up worldwide revenues of $20bn and by our reckoning around £1.1bn of that will have been from subscribers in the UK. However, they received a Tax Credit form the UK government. [2]
Amazon is not required to publish the accounts of its UK branch, meaning it is impossible to scrutinise the amount of tax it pays on profits generated here. However, it has a UK-based logistics arm, Amazon UK Services, which paid £4.6m in corporation tax in 2017 on reported profits of £80m. [3]
In 2017 Starbucks paid tax equivalent to 2.8%. This equates to $5.9 million on a profit of $213 million. [4]
The tax rate on corporate profits in 2017 was 19 per cent.
[2] https://www.independent.co.uk/news/business/comment/netflix-corporation-tax-uk-avoidance-analysis-a9315456.html
[3] https://www.independent.co.uk/news/business/news/jeremy-corbyn-attacks-amazon-tax-avoidance-a8989726.html
[4] https://www.bloomberg.com/news/articles/2018-09-19/starbucks-paid-2-8-effective-u-k-tax-last-year-ft-reports
