Reports that US coffee chain
is ready to voluntarily step up the amount of corporation tax that it pays in the UK is bad news as it is ‘anti-business’ suggests Nigel Green, chief executive officer (CEO) of financial advisor the deVere Group.
Should Starbucks pay one penny more in tax than they are lawfully required to, simply because of pressure from a committee of politicians, it sets a serious anti-business precedent,” said Green. ““A tax system which is based on ‘donations’ as a result of blistering attacks from Members of Parliament [MPs] on a handful of high-profile companies, could deter foreign firms from investing in the UK.
“Indeed, in many ways, the whole saga flies in the face of [Chancellor George] Osborne’s message that ‘Britain is open for business.”
Green added that by not legally mitigating its tax liabilities for its shareholders, the Starbucks board might be in breach of its fiduciary duty.
Separately, lawyer and tax expert Richard Jordan, a partner at the firm of Thomas Eggar, commented on the assertion by Margaret Hodge, chairwoman of the Public Accounts Committee (PAC), that HM Revenue and Customs (HMRC) needed to be “more aggressive and assertive in confronting corporate tax avoidance”.
“Anyone who has experienced a tax investigation knows that HMRC is tough and ruthless, and exploit its considerable powers to impose the maximum inconvenience on immoral but legal tax avoiders,” said Jordan. “However, HMRC carefully picks its battles and chooses to spend the tax payer’s money only on cases that it has a realistic prospect of winning.
“To do otherwise would be madness, and yet this is what [Hodge] suggested in proposing that it should spend tax payers’ money challenging more tax cases to demonstrate a ruthless streak, despite having no prospects of winning. The cost of litigation is immense and, if there is one good way to demonstrate inefficient and wasteful public spending, it would be to litigate on lost causes.
“If MPs are unhappy, then they should change the law to make the corporations pay more tax. The problem is that, unlike HMRC employees, MPs today have rarely worked in the real world of commerce which means they lack any commercial common sense. We need MPs who truly understand how business works. HMRC employees have a lonely and thankless job to do, but they do it well. It is disappointing to see them publicly undermined and criticised by some MPs in this way.”
Sentiment in the financial services sector deteriorated in the three months to September, as firms digested the challenges of lower interest rates and the uncertainty caused by the vote to leave the European Union (EU), according to the latest CBI/PwC Financial Services Survey.
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
The proposals of both US presidential candidates could shake up operating conditions in several sectors, reports the credit ratings agency.
The Danish shipping and oil conglomerate confirmed that it will separate its businesses into stand-alone transport and energy divisions.