Big companies ‘avoid £20bn’ in tax

Big companies 'avoid £20bn' in tax

Tax Justice Network issues report comparing effective tax rates to actual tax rates

Britain’s 50 largest companies have avoided £20bn in tax since the year 2000,
according to a report by lobby group the Tax Justice Network.

The study, released at the weekend, examined the top 50 companies in the
FTSE100 and examined their effective tax rates, at 24.5%, against the notional
corporate tax rate, of 30%.

If they had paid the full amount, they would have paid £20bn more in tax of
which £12bn could have gone to the UK exchequer, the report’s author Richard
Murphy said.

‘The tax gap is growing steadily, a trend that is not explained by changes in
tax rates around the world. That means tax avoidance has to be a significant
part of the explanation,’ Murphy was quoted in The Observer saying.

Companies mentioned in the report defended their low tax bills yesterday.

Astrazeneca, which paid a 23% rate, said it operated around the world where
different and lower tax rates applied, as well as receiving credits for R&D
work. BAA, said it got tax allowances for its investment in infrastructure.

Murphy has insisted that global variances in tax rates could not explain the
low rates completely. A weighted average of worldwide tax rates would suggest
they should have paid tax at 29.7%, he said.

Tax avoidance has become an increasingly sensitive issue for corporates, with
the Tax Justice Network establishing itself as a leading critic.

To read the report go to
http://www.thetaxgap.com/4682.html.
A blog discussing the issues raised has also been set up at
http://taxgap.blogspot.com/.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource