Birkenhead MP Frank Field is calling on the Government to take firm action to tackle tax avoidance by US multinationals
Last week senior executives from Starbucks, Amazon and Google endured a torrid time being grilled by Parliament’s public accounts committee.
The committee's Labour chairman, Margaret Hodge, told the executives before her: "We're not accusing you of being illegal, we're accusing you of being immoral" when it became apparent legal tax avoidance techniques are a component of their business models.
Like many other large multinationals, all three avoided paying corporation tax in the UK. Starbucks alone has paid just £8.6m on a reported £3bn in sales since 1998.
That equates to a tax rate of less than 0.3%.
Mr Field has today put down an Early Day Motion in Parliament - signed by Mrs Hodge - calling on the Government to announce plans in the Autumn Statement to levy a form of turnover tax on the multinationals' economic activity in the UK.
He said this would be equivalent to the revenue which would normally have been raised through corporation tax on would apply to any multinational found not to be paying an appropriate level of tax on their UK sales.
He said: “While not illegal, the manipulation by these multinationals of their accounts to minimise the payment of corporation tax is immoral.
"With the collapse of Government revenue from 2008, corporation tax is vital in helping to balance the Government’s books in a fair manner.
"The more tax that these companies avoid paying, the greater the tax burden will be on the rest of us, and cuts in public services will get even worse. Their actions also damage British businesses that pay full taxes.”
Mr Field’s paper has been signed by MP’s from all three main political parties.
The Autumn Statement will be made by Chancellor George Osborne on Wednesday, December 5. It provides an update on the Government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility.