Google and Amazon got a bit of a tongue-lashing yesterday over their suspiciously low tax bills in the UK. As part of a public corporate tax witch-hunt, various bigwigs from the companies got dragged up in front of a committee and subjected to some fairly justified and scathing abuse.
Amazon and Google combined have annual UK turnovers somewhere in the region of £5 billion; despite this, only Google paid UK corporation tax last year, and even then only a paltry £6 million. Amazon made things worse by being “deliberately evasive” during the talks, refusing to disclose its UK revenue even when asked really, really nicely.
Both companies use “creative” corporate structures to funnel profits out of the UK; Google is based in Ireland (not that it pays much tax there either), and Amazon similarly moves its profit out through Luxembourg. All of this is strictly legal, but as the Chair of the Britain’s Public Accounts Committee Margaret Hodge said, “We’re not accusing you of being illegal, we are accusing you of being immoral”.
Morality in tax is a fairly fine and dangerous line to tread, and it’s wise to remember that Google and Amazon do pay pesky things like National Insurance and other indirect taxes. Still, I’m not really sure that quite excuses dodging corporation tax to which the UK government is most likely entitled. Whether or not this public humiliation manages to shame them into coughing up remains to be seen, but I reckon this little dose of accountability is a step in the right direction. [Guardian and Reuters via Techradar]
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