The public should boycott Starbucks, Google and Amazon until they pay proper corporation tax on their UK profits, the head of a House of Commons inquiry has urged.
Labour MP Margaret Hodge, who heads the public accounts committee, said: “I think one should boycott these companies. I do actually think that is the right thing to do.”
Starbucks has reported a taxable profit only once in its 15 years of operating in the UK.
The taxable profits of its UK business are calculated net of the royalty paid to its Netherlands regional headquarters.
The royalty rate used to be 6 per cent of sales, but was recently reduced to 4.7 per cent after a UK revenue challenge.
Last week chancellor of the exchequer George Osborne and German counterpart Wolfgang Schäuble demanded a change in international tax rules. “Some multinational businesses are able to shift the taxation of their profits away from the jurisdictions where they are being generated, thus minimising their tax payments compared to smaller, less international companies,” they said.
Business secretary Vince Cable said: “It has got to go much further because the kind of thing that we are now exposing with Starbucks and Amazon and the like is just unacceptable business practice.”
Tax campaigner Richard Murphy of Tax Research UK highlighted Amazon’s use of a Luxembourg base, even though it employs thousands in Britain. “Their representative could not justify how an order made in the UK for a product in a UK warehouse, shipped by UK staff through the UK post and with a bill enclosed printed in this country, could somehow have anything to do with Luxembourg.”
