The British Government is powerless to stop large multi-national companies like Starbucks and Google from paying almost no tax on their profits in this country, Britain’s most senior tax official admitted today. Lin Homer, Permanent Secretary of Her Majesty’s Revenue and Customs, told MPs the Government was currently unable to prevent big international corporations from declaring their profits in foreign countries with tiny tax rates - even if they made those profits in this country.
Next week senior executives from the coffee chain Starbucks are due to face MPs on the Public Administration Committee to explain why they have only paid £8.5 million in Corporation Tax despite in the last decade despite racking up £3bn in sales in the UK.
Officials from Apple and Google may also be called to give evidence to the Committee. Last year Google paid £6m in tax on a turnover of £395m while Apple is thought to be paying £14.4 million in tax on more than £1 billion of sales. It has been claimed that a more realistic tax bill would be closer to £570m.