Danny Alexander has announced £154 million of extra funding for HMRC to “get under the skin” of multinationals who are not paying their fair share of tax.
Some media sites are reporting that he may boycott Starbucks.
There is one slight snag with that claim.
Danny revealed on Today this morning that he is a tea drinker.
* Newshound: bringing you the best Lib Dem commentary in print, on air or online.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
What’s going on with party strategy? (Caron Lindsay)
We do have a two-tier system (Neil Hickman)
Observations of an Expat: NATO Irony (Tom Arms)
What really happened? (Simon Banks)
Why community politics matters (Mark Corner)
We do have a two-tier policing system but it is not what our homegrown racists think it is.
Lib Dems are reviewing policy and strategy says PoliticsHome
From Norman settlement to a civic square
Northern Ireland debates the future of its railways in 1957
"The old savage England": D.H. Lawrence visits the Stiperstones
Church Green video
Doing my bit at Whickham Church Green
Have a goat day tomorrow!
Pride inside instead
Neil Hickman 
Alex Macfie 
Tom Walker Alex Macfie 
paul barker 
12 Comments
Starbucks serve tea! But its like Norman Smith said, the press can’t wait to catch an MP in Starbucks – enter stage right Nadine Dorres!
If you’d drunk their tea you wouldn’t bother again as its c***. It also comes in plastic tea bags for gods sake.
Am aware of that David, but Danny seemed to say it as if to say he never goes to Starbucks…
How will he do it? Get under their skin? It looks like something of a legal minefield, as well as a political one.
These are international companies and some of their costs and profits are rightfully spent and earned abroad. What sort of law will be able to distinguish companies that have real, tangible foreign operations from companies whose foreign costs are somewhat intangible, hard-to-value ones like the costs of a patent or other intellectual property?
And how will other countries react? There are many many businesses headquartered abroad and operating internationally, including construction businesses for example. If I own a patent and move to Switcerland, should I pay tax on my patent earning in Switserland or here?
If I am a Swiss citizen, UK-born but naturalized through my Swiss wife, and Iand my wife own a Swiss company which owns a UK company that operates in Brazil and Nigeria, where “should” we pay tax, and how will the tax laws identify our tax obligations accurately, and without unfairly taxing us multiple times in different countries?
Richard Dean. You put your finger on the problem. Capital and the elite are globalised and can shop for the lowest tax jurisdiction, while labour and the state are tied to countries. Perhaps the answer is to tax these people and companies at the global level.
I really do not know why everyone is so frightened of taking on these global enterprises. The fact is if you charged them an operating/ fee/tax and they moved on a company that was willing to pay it would fill the gap. It”s this ludicrous idea that there are special people and special companies that must be placated that causes the problems. You call their bluff.
I don’t believe it would be in the least bit difficult to tax big international companies. Any company that operates and/or makes profit by selling goods and/or servicess within the United KIngdom shall pay UK taxes. End Of. Al that is needed is a government will the political will so to do. Sadly this is not the case at the moment; the Conservatives are not really interested for ideological (and other unmentionable!) reasons; some of the LibDems do seem interested in ‘going after’ big tax avoiders, but I don’t think this includes those at the top of the party. As for ‘naming and shaming’, well the government seems dead against naming big companies who avoid big tax bills – one is left wondering WHY? People who fiddle the tax and benefits system (usually poorer individuals) are vilified from all quarters; there seems a massiver double-standard going on here. I must say the Polly Toynbee makes sence today in the following piece.
http://www.guardian.co.uk/business/video/2012/dec/03/should-tax-avoiding-companies-be-named-and-shamed-video
I understand Ms Toynbee’s views are not universally welcomed, but what she says here is difficult to argue with.
But you have to assess the profits on which corporation tax is payable, and assessing them is not simple at all.
https://www.libdemvoice.org/vince-cable-criticises-starbucks-over-tax-dodging-31942.html#comment-230424
“I don’t believe it would be in the least bit difficult to tax big international companies. Any company that operates and/or makes profit by selling goods and/or servicess within the United KIngdom shall pay UK taxes.”
Firstly we also tax UK based companies on the profits they make overseas so this isn’t a zero sum game.
Secondly your statement is the situation at the moment – companies pay corporation tax on the profit they make in this country. The issue is over calculating what that profit is if a company (say) buys its coffee beans in Holland, has its payroll management in Germany, it’s research, publicity and advertising done in France.
What I would like to hear from Margaret Hodge is if this is easy to sort out why didn’t Labout do it when they had 10 years to get to grips with it. Either it isn’t easy or it is easy and neither the current or the past government want to tackle it.
@Hywel. Yes I certainly agree with you about Labour and Margaret Hodge. I believe that ALL politicians are culpable when it comes to very big companies and the tax they do or (more likely) do not pay. I have paid income tax (like most British citizens) for a very long working life, both PAYE and as a self-employed sole trader; I have never ducked paying as much as one penny of tax (again, like most British citizens). So for me, and millions more like me, to read that officers from the ‘Revenue’ sit down privately with financial executives from these big companies and NEGOTIATE how much (or probable how little) tax they need to pay is, frankly, utterly staggering. And I suspect staggering to the greaat majority of people in this country. On my many dealings with the HMRC I have always received a no-nonsence demand; Pay x amount by x date or else (presumably prison awaits!). And we hear from Mr Cameron and Mr Clegg that ‘we are all in this together’. I am speechless.
Does this mean that the UK is planning to stop being the best tax haven going with it’s non-dom rules? The UK offers unique opportunities as it is a lot harder for foreign tax offices to use anti-avoidance provisions against people moving to a business / cultural / shopping superpower like London than it would be against people moving to obscure islands.
What do I hear? Such a change would not be in the UK national interest? Ok, fine, but don’t expect other countries to help you catch your own tax avoiders then.
@BigDave
One reason why HMRC have to negotiate with big companies is the tax code is so mammoth and complicated that no-one really understands it. I’ve seen articles suggesting that you can calculate a tax liability and come up with three different liabilities (with quite a difference between the three) depending on how you work through various allowances (and not involving any complex business with overseas bodies). Done properly it’s probably a more efficient way of sorting things out than adversarial court proceedings (which would end up involving negotiation as some sort of pre-action mediation would be involved.)
That’s why we had a policy of tax simplification but I don’t really know what’s happened to that
I would also love to have had a no-nonsense demand from HMRC. My self-assessment this year took a few months of too-ing and froing with them before we got to the right figure (actually a refund :-)). That included me having to correct them after they decided I’d written in a figure for total net profit which was not what I’d actually written by interpreting my handwriting in an extraordinarily bizarre way! I’m not getting one out to check but I think my self-assessment statement usually says something like “I’ve calculated the tax due as… if you disagree please write back by…” so it’s not quite as stark a demand as suggested.
“I have never ducked paying as much as one penny of tax”
I’m not sure how far you go down that line. I have a pension, an ISA which reduce my tax due. I also claim for the costs related to my self employed income . Is that ducking tax?
There is some merit in what someone (I think from the CBI) said, “If the government wants us to stop reducing our tax bills then they need to stop giving us ways to do that!” (I paraphrase 🙂