Let’s face it: we had to tackle this highly controversial subject at some time or other! At a time when the UK’s economy has seen far better days and when local authorities and public bodies are forced to make dramatic cuts to their budgets, it cannot be helpful that some of the largest companies trading in this country are steering away from paying vast sums of tax to our government.
Indeed, these companies are not actually doing anything illegal. They base their headquarters in other countries, which is perfectly legitimate under EU and international law, and manage to get away without paying Her Majesty’s Revenue and Customs literally hundreds of millions of pounds. In fact, if you analyse some of the largest companies that are taking part in this practice, they alone may be avoiding well over £100 million in taxes that should be going into the country’s coffers.
This is shocking, especially when austerity measures are starting to take hold now and most households up and down the land are struggling to make ends meet. But when you actually sit back and see why companies are taking this course of action, you may come some way towards understanding it. We all know that we live in a country that has been deservedly labelled as “rip-off Britain”, and this appears to hold true where corporation tax and all other business taxes are concerned. Where a large, publicly limited company has an ultimate responsibility to its shareholders, surely it makes sense to follow a course of action that will save the company from losing out on vast chunks of its profit. In our capitalist society, this cannot really be argued with.
It is the fact that these companies have such a ubiquitous presence on our high streets and in our everyday lives, however, that makes the general public see red and react so adversely to such behaviour. Most of us would hold that if a company wishes to trade within our borders, it has an ultimate duty to pay back its fair share of tax accordingly. Otherwise, the company is seen to be leeching from us and enjoying the best of both worlds.
Then, of course, we need to spare a thought for the small and medium-size businesses that would never be able to rely on such a luxury. It’s a known fact that most of these companies are swimming against a rising tide at the moment; indeed, businesses are sinking on a weekly basis and this has much to do with the high level of commitment that they face through business taxes.
Although companies may feel entitled to avoid paying tax in this country, we come back to the fact that this cannot be permitted to continue. The Government needs to take immediate action to prevent these massive losses to our economy. It’s very simple: we just can’t afford to lose revenues such as these to the likes of countries such as Switzerland, which really do not need this money as much as we do. Some kind of emergency derogation should be set in place, in the best interest of the nation, to ensure that any company that benefits from trading in this country is responsible for every single penny of tax it owes.
The public are becoming more and more incensed by the actions of these huge companies, and as a result, action groups are springing up at a rate of knots. We all know that public opinion is usually the strongest factor behind any change in the law, so let’s just hope the Government gets the message here sooner rather than later.