You are here: Home - Household Bills - News - Understanding -

BLOG: What consumers really think about corporate tax avoidance

0
Written by:
24/05/2013
This week Baker Tilly commissioned a short survey of 100 UK consumers on their views on corporate tax.
BLOG: What consumers really think about corporate tax avoidance

It asked which was worse – US companies avoiding paying tax in the UK, or UK companies not paying enough tax in this country. Unsurprisingly, nearly 75% of people thought they were as bad as each other, but surprisingly more people thought that UK companies not paying enough tax (17%) was worse than their US counterparts not paying enough (9%).

This week we have seen tax-related fingers pointed at Marks and Spencer, following on from the even more vigorous finger “prodding” of Google by Margaret Hodge and the Public Accounts Committee. Google and Amazon will remain under the cosh, but it looks now like attention may turn to companies closer to home as well.

If public and media attention unearths anything it does not like in the tax affairs of a domestic company, especially if it is a household name, that company could find itself on a major PR defensive. Indeed our survey suggests that the backlash from the public could be far greater than that experienced in the wake of the ‘naming and shaming’ of the US corporates.

It is perfectly legitimate and sensible for a public company to transparently and legally manage their tax affairs for the benefit of their public shareholders. There is no moral imperative for them to pay more tax than they need to, whatever the vibes given off by certain politicians. And looking at the tax rates paid by a snapshot of UK household names, there is little to suggest that they are comparable to Google or Amazon in the sense that the amount of UK tax they pay is out of proportion to their UK economic activity.

Expect domestic companies to come under intense scrutiny nevertheless. What remains to be seen is whether Margaret Hodge and the PAC can continue to use the morality card while conducting their investigations. I suspect not. The position that years of government competition for international business investment is responsible for flourishing tax avoidance, not companies, is gaining traction and we are starting to see Hodge acknowledge this.

While they may come under the microscope somewhat, I think it is unlikely that we will see the sort of mudslinging at domestic firms that we have seen recently against Google and Amazon (and this week, Apple in the US). With David Cameron making tax a priority at the G8, and both he and Ed Miliband now publicly pushing for country by country reporting, it looks like reform will come sooner or later. Whether any reform is consistent with George Osborne’s stated aim of “building the most competitive tax system in the world” remains to be seen, however.

George Bull is senior tax partner at Baker Tilly

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

Your rights for refunds if travel is affected by strikes

There have been a wave of strikes this year across many different industries, and more are planned over Christ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week