Which is the odd one out; Starbucks, Amazon, Google and PB Taxation Services Limited?
If you were to have been asked that question 2 years ago you would have said, PB Taxation Services Ltd, because it was the only one that you’d never heard of. To be honest, that answer could still be the same today, but the fact that you’ve got this far down the blog, you must at least be vaguely aware of my firm.
Of course the answer is STILL PB Taxation Services Ltd, but now it’s for a different reason (unless you’re reading this sometime in the future and the UK tax legislation has been changed to tax all companies with a UK presence).
At the time of typing, the press is full of indignation from politicians, journalists and the ordinary man in the street at the seemingly low tax rates paid in the UK by those global behemoths Starbucks, Amazon and Google.
It is not my intention to comment on the ethical strategy of “treaty shopping”, whereby a company (or indeed an individual) takes advantages of the various different double tax treaties between the UK and the rest of the world. What is clear, however, is that these companies are not breaking the law. They, and many more businesses, are simply setting up their affairs to legally pay the least tax that they can. Although the numbers are astronomically large, is it any different from an individual putting money into an ISA and paying no tax, rather than putting it into a normal deposit account and suffering a 20% tax deduction?
The Coalition Government are actively promoting a policy of reducing the headline rate of Corporation Tax in the UK. This is not just to benefit those companies that already pay tax in the UK, but also to make UK plc more attractive to overseas investors and incentivize them to set up their businesses here. Perhaps this will mean that we will see more global organisations setting up in the UK in the future, but for the time being, they will continue to shop around for the best tax rates all over the world and pay tax on only a tiny fraction of their UK sales.
By the way, the odd one out is Google. The others are named after people;
Starbuck was the first mate of the boat in “Moby Dick”
Amazons are mythical Greek warriors
And PB is me!