Tax not 'voluntary', Alexander tells firms

[dutchman]

Danny Alexander has told multinational firms that paying tax is an obligation, not "a voluntary choice" they can make to please their customers.



The chief secretary to the Treasury was speaking in regard to Starbucks, which last week said it would voluntarily pay more UK corporation tax.

Mr Alexander told the BBC's Andrew Marr Show that the government was continuing efforts to tackle tax avoidance.

He said this work was taking place both in the UK and abroad.

'Responsibility'

"Taxation for big companies, or for anyone in society, can't be, and mustn't be, a voluntary arrangement," said Mr Alexander.

"Thinking of the tax system as if it is like the church plate going around on a Sunday morning is completely the wrong way to think about it."

He added: "Paying tax is not a voluntary choice, it is not something you can just chose to do willy nilly because you think it will please your customers, it is an obligation."

Coffee chain Starbucks announced on Thursday of last week that it would pay about £20m in UK corporation tax [tax on its profits] over the next two years, following a public outcry over how little it pays.

The company has paid just £8.6m in corporation tax in its 14 years of trading in the UK, and nothing in the last three years, despite UK sales of nearly £400m in 2011.

Two other multinational companies which have also been criticised for paying too little corporation tax - Amazon and Google - both said they would not be following Starbucks' voluntary contribution lead.

London Mayor Boris Johnson on Sunday defended companies, such as Starbucks, for seeking to minimise the level of tax they paid in the UK.

In an interview on Sky News, he said: "Imagine that you are the corporate finance director of one of these companies.

"Your job is to look at the law as it stands. Your fiduciary duty to your shareholders is to minimise your tax exposure."

Mr Johnson added that Starbucks should be praised for announcing that going forward it would voluntarily pay UK corporation tax.

"Now that Starbucks has stepped up to the plate and announced they are going to be making this payment I think rather than everybody sneering at them, people should welcome that," he said.

"My point is it is a bit unfair to bash the companies and then sneer at them when they try to do good."

[dutchman]

Danny Alexander has told multinational firms that paying tax is an obligation

No it isn't. There is no law which says you have to pay a tax which you don't legally owe. At present the 20 biggest companies based in the UK don't pay a single penny in Income Tax or Corporation Tax.

If the Tories were serious about taxing big companies they'd introduce a 'financial transactions tax' equal to just 1% of these companies' annual turnover. That would raise more money than all the income tax paid by individuals in the UK put together but Cameron has completely ruled it out.

Not that individual taxpayers would ever benefit, the government would simply blow the increased revenue on various so-called 'vanity projects'.

[rebbonk]

Don't know about anyone else, but I'm not about to pay tax if I don't have to.

As far as I can see, these companies have done nothing illegal. Perhaps immoral, but not illegal.