At the moment, tax avoidance is a hot topic issue, with several large corporations being accused of failing to pay their fair share. The tax policies of Apple, Google, Starbucks, Amazon and Vodafone have caused a public outcry, with many claiming big businesses are taking more in government grants than they’re putting back into the system.
Even financial expert Martin Lewis has described these large corporations as breaching a “moral boundary”, costing the UK billions of pounds of uncollectible tax. Countless Britons are outraged, saying big businesses are cheating the system.
The numbers speak for themselves:
Just lately, Thames Water has been added to the list of high profile companies using tax loopholes. Last year, the company received a £5 million credit from the Treasury but paid no corporation tax.
So what’s next for big name tax rebels like Google, Starbucks, Amazon and Thames Water? The government could deal with the problem in a number of ways: by closing loopholes or simplifying tax code, denying public sector contracts to companies who aren’t paying their fair share, creating a new code of conduct for accountancy firms, policing the tax system or better equipping the HMRC to investigate tax dealings of multinational companies.
Although the media is doing a good job of naming and shaming companies and individuals who’ve taken advantage of tax loopholes, this is a worldwide problem that requires widespread government crackdowns. Britons agree – approximately 80 per cent of people want to see the government take more aggressive action with regards to tax avoidance.
What does this mean for you and your company? Basically, the climate is changing. People are taking a stand against businesses who aren’t giving back to the system. As such, you should go through your tax policy with a fine-toothed comb, with the assistance of chartered certified accountants who will ensure your tax code is up-to-date.