UK: David Cameron’s ‘broken pledge’ to tackle £30bn tax haven used by Google
BY JASON BEATTIE From Mirror UK
David Cameron has broken a pledge to tackle tax havens used by Google
David Cameron is accused of breaking his pledge to force tax havens used by companies such as Google to open their books.
The Prime Minister announced two years’ ago he would make British territories such as Bermuda and the Cayman Islands set up public registers of firms using them to avoid billions of pounds in tax.
But only two countries have so far complied with the request.
It came as it emerged that six of Britain’s ten biggest multinationals including Shell, British American Tobacco and Lloyds Banking Group paid no corporation tax in Britain in 2014 despite making millions of pounds in profits.
All have subsidiary companies based in the tax havens.
Its head of PR Peter Barron said he did not have the precise figure when asked how much of the £30billion may have come from the UK. He said: “I don’t know the answer, I haven’t got the answer to my fingertips, except I would say that about 10% of global revenues come from the UK.”
The internet giant sparked outrage last week after striking a deal with HM Revenue & Customs that will see it pay just £130million in back taxes for the last decade despite making more than £4billion in profit in the UK.
George Osborne hailed the agreement as a “major success” but Business Secretary Sajid Javid admitted the settlement wasn’t “a glorious moment.”
“They do look at this and they say ‘look, I don’t operate all these multiple jurisdictions around the world, I can’t shift profits around, what about me, where’s the level playing field?’ and I share that sense and the sort of sense of unfairness that exists,” he told the BBC’s Andrew Marr show.
Mr Javid denied the Treasury was lobbying the EU to stop Brussels imposing sanctions on Bermuda.
“I don’t think that’s the case at all,” he said.
Bermuda has not only refused to set up a public register of beneficial ownership but it also refused to hold a consultation on the issue.
Other British Overseas Territories which have failed to set up registers include the Caymans, British Virgin Islands, Anguilla and the Turks & Caicos islands.
The Crown Dependencies of Jersey, Guernsey and the Isle of Man are also stalling on the demand.
Mr Barron claimed Google’s interests in Bermuda had “absolutely no bearing on the amount of tax we pay in the UK”.
He added: “It doesn’t have a relationship with the taxes we pay in the UK. This is a relationship with the United States.
“The United States has a very, very high corporate tax rate and the Bermuda structure is there because of the way that America deals with its taxation of global companies, and it leads to a very high incentive to keep profits returning to America.”
Lib Dem leader Tim Farron MP said the failure to clamp down on tax havens was a “national embarrassment.”
He told the Mirror: “Tax havens like this are sunny places for shady people. The recent Google tax deal was announced by the Chancellor as a ‘victory’. He is utterly deluded.
“Thousands of small businesses must be looking at this with utter horror and thinking if you are big enough, can pay lobbyists enough, then you can pay the tax you want. It is a national embarrassment.”
Mr Cameron wrote in April 2014 to the Overseas Territories and Crown Dependencies asking them each to establish a register, open to the public, of those firms and individuals who had stashed their money in those tax havens.
The PM’s letter said: “Beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion.
“So I am proud that the establishment of a publicly accessible central registry of company beneficial ownership information will now form a key pillar of our G8 legacy.”
But the Foreign Office has admitted in a parliamentary question to the Lib Dems that none of the countries has set up the register except Montserrat, which will charge for the service, and Gibraltar which has agreed to EU reporting rules.
Foreign Office minister James Duddridge said the Overseas Territories were being asked to “implement either a central register of company beneficial ownership, or a similarly effective system.”
Asked how many had set up registers, he replied: “We are continuing our dialogue with the Overseas Territories and have offered technical support as they develop their proposals.”
Lib Dem peer Susan Kramer added: “Despite great claims of progress, in reality plans to tackle companies that hide away their profits and their records oversea appear to be at a standstill.
“If the Government was really committed to making these companies more transparent they would be providing real direction to overseas territories, rather than sitting on their hands and hoping in vain that the territories will find a solution themselves.”
Joseph Stead of the charity Christian Aid, added: “The Government has made a number of statements about what it expected the Overseas Territories to have delivered by now, but it looks increasingly clear that these were expressions of hope rather than expectation.
“All the Overseas Territories with financial centres were expected to have produced timetables for implementation of central registers (or similar) of company owners, but it is clear these have not been forthcoming.”
IMAGES:
PAGoogle Searching questions: Britain has failed to act on tax havens despite a promise to do so
PAGoogle CEO Eric Schmidt (centre) arrives at Downing Street today Search the money: Google boss Eric Schmidt visiting Downing Street
Sunshine and shade: Google has £30bn in the tax haven of Bermuda
Reuters Google How much? Google cannot say how much money from its UK arm it has in Bermuda
For more on this story go to: http://www.mirror.co.uk/news/uk-news/david-camerons-broken-pledge-tackle-7282202