Belfast Telegraph

Tuesday 21 October 2014

Miliband pledges tax crackdown

Labour leader Ed Miliband will write new rules to tackle corporate tax dodgers if he wins the next election

Labour leader Ed Miliband will write new rules to tackle corporate tax dodgers if he wins the next election, even if there is no international consensus for action.

Prime Minister David Cameron will lead efforts at next month's G8 summit of world leaders to find ways of preventing multinational firms from exploiting tax loopholes.

But Mr Miliband told the Observer that if no deal is done a future Labour administration would act unilaterally to make global firms operating in the UK be more transparent about their tax structures.

The move comes just days after internet giant Google was given a mauling by MPs on the Public Accounts Committee over its tax affairs. At a stormy session MPs reacted with incredulity to claims that the company - which paid just £6 million in corporation tax in 2011 - did not carry out advertising sales in the UK, despite generating more than £3 billion a year in revenues.

Mr Miliband, who will speak at a Google event in Hertfordshire on Wednesday, said he believed some multinationals were not living up to their responsibilities to society.

He said: "Now, what is the politicians' responsibility: change the law. But it is also to talk about the kind of society we want to create and what the responsibilities of a company like Google are. I don't think they are living up to their responsibilities at the moment, and I will be very clear about that on Wednesday. It is part of a culture of irresponsibility. If everyone approaches their tax affairs as some of these companies have approached their tax affairs we wouldn't have a health service, we wouldn't have an education system. And actually the point I will make at Google is that will undermine Google."

Google's executive chairman Eric Schmidt, who will appear at the same event as Mr Miliband on Wednesday and is also due to visit Downing Street on Monday, claimed his company ''has always aspired to do the right thing'' but said ''international tax law could almost certainly benefit from reform''.

Writing in the Observer he added: ''While profit has become something of a dirty word, it's important to remember that many corporations reinvest their profits in research and product development, which in turn tends to lead to job creation, further economic growth and, ultimately, more tax.

"For example, Google has just announced plans to invest more than £1 billion in new offices in London's King's Cross. It's been estimated that this investment will generate some £80 million a year in new employment taxes and £50 million in stamp duty. This is in addition to the significant amounts we already pay in UK tax through corporate, local and employment taxes."

Meanwhile, former Google executive Barney Jones has told The Sunday Times that British taxpayers are being "cheated'' by the company. The whistle-blower claims Google has a system in place which diverts British profits through Ireland to the Bermuda tax haven. He said: "It uses a concocted scheme to avoid tax. It's a smokescreen to distort where the substance of its economic activity is really taking place.'' The Sunday Times said Mr Jones is ready to hand over a cache of more than 100,000 emails and documents to HM Revenue & Customs detailing the scheme.

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