The UK’s HMRC have just done a deal with Google for £130 million back taxes for the last ten years. Some would say you ‘you gotta have a laugh…’ and most would look aghast at that figure. I don’t think the UK differs much from most other European states in using American ( and most are American giants) as political tax footballs. They are big and easy to kick, Google, Apple, Amazon, Facebook, Microsoft and Starbucks to name but a few .
I left Starbucks last as all the others have not inconsiderable links to our industry, in so far as most of us rely upon their services or products in order to operate. Starbucks has rather more tenuous links, but at least there are competitors. I,for one, have had meetings in Costa Coffee. That’ll teach Starbucks for not paying their taxes !
The point is they do pay their taxes, or rather they use legitimate ways to minimise their tax obligations. This may not appear right or socially just , but then that is the fault of European Governments. There is the belief is that Europe should had some form of uniform approach , but reality steps in as the companies would only seek alternatives. It all starts to get very political , which is perhaps a legitimate approach if it were not for the fact that it is mainly American companies that get bashed. In the UK it would not be difficult to look to our own venerable establishments. Our esteemed press DGMT owners of the Daily Mail, are in turn owned by a trust based in Bermuda, the noble Rothermeres, are non doms . Another, bastion of Britishness, the Daily Telegraph, is owned by the Barclay Brothers, once again based offshore. The Angel of British business , Richard Branson, a non dom, plus most Virgin companies are under a web of offshore organisations. Phillip Green, Top Shop supremo neither disguises nor apologises for being a non dom. The lists are endless.
Google are currently building a 750,000 sq ft (approximately 75,000sq m) office site in London. It will house 4,500 employees and is generating 1250 jobs in its construction. Amazon created over 10,000 jobs in Europe in 2015. It plans to increase the UK workforce in 2016, by over 2,500. The other much overlooked fact is that many of the mechanisms are the creation of the Brits, the Channel Islands, Isle of Man, more exotic locations such the Banamas, Bermuda, and the Caymans. We have to be very careful what we wish for.
Not only do these organisations have a direct link with the structure and future of our industry. They also have very close links in terms of creating additional consumers. By the nature of the demographic of their typical employee it would very likely be close to that of a ‘party’ consumer. The issue of the fiscal status of multi national organisations will not go away , any day soon. Whilst none of us , within our little industry , could even contemplate such complex and sophisticated financial mechanisms. What I do know , is there have been a fair few , individuals , fairly close to our market, who legitimately benefited from such legitimate offshore arrangements.
My blogs will never be party political but occasionally they maybe a little political about those of us in the ‘party ‘ industry.
The question we have to ask ourselves, if given the opportunity to legally minimise our tax obligations, do we take it ?