Multinationals reap billions in profit every year here in the U.K but do they put back into the system? And does the HMRC treat small businesses the same way they treat big businesses?
Let’s take Amazon for example, they only paid 11.9 Million in corporation tax in 2015, they made a profit of 5.3 Billion in the same year. Facebook paid a mere 5k into the economy last year.
Contrast this with the situation of Small to Medium Businesses selling digital goods, since January 2015 they are bound to pay VAT on their products according to the country they are sold in. LTD companies whether small or large corporations both play Corporation Tax at the rate of 20%, of course if earnings are in triple figures, that’s peanuts, if however you own a struggling small business with maybe 10 or so employers scraping 10k a year, 20% is a LOT. Add on to that VAT, Council Tax and business rates depending on circumstances, it’s very clear that the HMRC follow the money in every sense of the word.
It is this imbalance that has allowed large high street retailers and online businesses to quite literally eat up the competition plus the richer these companies are, there’s more chance they will be operating offshore tax havens in the Caymen Islands or even closer to home in the Isle Of Wight where corporation tax is 0%
Some positive signs of a fight back are emerging such as the small Welsh town of Crickhowell who successfully managed to register their local businesses to a tax haven. Another group making progress is non profit community benefit society Fair Tax Mark who offer accreditation to companies who adopt their criteria for transparency and disclosure of taxes. So far The Co Op has signed up along with 11 other companies. you can watch the BBC Panorama documentary about how Crickhowell took on the taxman here: