Pressure tax dodgers

The most heartening development from the escalating political row about the amount of tax that big companies pay in Britain has been the move by Starbucks, the coffee chain, to engage in talks with HMRC about its future tax payments. The company was acting within the law in paying much of its earnings as royalties through a sister company in the Netherlands, which reduced its corporation tax bill here to zero, but it is one thing to act within the law and it is quite anoter to act in a manner that strikes customers as right. And in the case of a coffee chain there is no shortage of other options for consumers.

It remains to be seen whether consumer pressure can be brought in the same way on other multinationals that go out of their way to minimize their tax payments in the UK, such as Google, Amazon and Apple. Certainly, the Chancellor is right to be boosting the number of skilled workers at HMRC whose mandate is to investigate the tax tactics employed by big companies to see whether they comply with the law, and whether the law itself should be changed. Companies that make money here should pay tax here.

London Evening Standard