Is corporation tax-avoidance an issue of corporate responsibility?

3 December 2012
Rebecca Ellinor, managing editor, Supply ManagementUnless you’ve been trapped under a desk somewhere, you’ll have seen the numerous headlines in recent days concerning the level of corporation tax paid by some companies on their profits achieved in the UK. In other words, some are paying very little or even none. And today a committee of MPs has weighed in on the debate. Margaret Hodge MP, chairwoman of the Public Accounts Committee, said as the group published its report on the basis of evidence from HM Revenue & Customs (HMRC), that: “Global companies with huge operations in the UK generating significant amounts of income are getting away with paying little or no corporation tax here. This is outrageous and an insult to British businesses and individuals who pay their fair share.” Her group examined HMRC’s annual report and accounts for 2011-12 and found corporation tax revenues have fallen “at a time when securing proper income from taxes is more vital than ever”. While Hodge said there is little credible information about what is going on, the evidence the committee took from large corporations was “unconvincing and, in some cases, evasive”. HMRC was also criticised for lacking clarity when trying to explain its approach to enforcing the corporation tax regime. “The inescapable conclusion is that multinationals are using structures and exploiting current tax legislation to move offshore profits that are clearly generated from economic activity in the UK,” said Hodge. In discussions with friends at the weekend, a couple said they planned not to buy from those companies accused of paying insufficient taxes. Consumers like low prices, but increasingly they do not want them at the expense of something else. So on this, Mega Monday for Christmas shopping, will customers start making their views known by spending their money elsewhere?
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