Deliver on e-business rhetoric

As well as denting the company’s already battered reputation, it is a timely reminder of how geography really is no barrier when it comes to tax avoidance.It comes as a more significant – and overlapping – debate rages in the background. How should e-business be taxed?

Last week Gabs Makhlouf, the Inland Revenue’s international division director, sought to put the UK in pole position in the race for an equitable solution. He said neither a website nor a server is a permanent establishment and should not be taxed in the UK.

The end of the debate? Maybe not. But if it can deliver on its rhetoric, the Revenue has a real chance to take a lead. The US has shied away from a solution, while the OECD will make its views known later this year. For now the main competition seems to be the Caribbean island of Anguilla.

Arguing that a website is different from bricks and mortar may not seem like a revolution. But it is significant.

And if the Revenue follows this by reforming the treatment of unapproved share options – which will benefit start-ups – it will send out a signal that making the UK the best place to trade online it’s a realistic ambition.

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