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Attack on schemes threatens growth, warns tax expert
Aggressive tax planning by multinationals could have unintended consequences for the majority of the UK’s firms, tax experts have warned.
Advisers at Russell New, an accounting and auditing firm, believe global companies such as Amazon, Google and Starbucks are unfairly bringing small and medium-sized enterprises (SMEs) into the authorities’ gaze by pushing the tax rulebook to the limits.
Corporate use of offshore subsidiaries to legally reduce tax bills has attracted widespread criticism from the public, the media, and MPs in recent months. Amazon was this week attacked again when it was revealed that the online retailer paid less in UK corporation tax last year than it received in government grants, and Google was yesterday accused by Margaret Hodge MP of doing “evil” in its UK tax affairs.
But official measures to crack down on avoidance schemes practised by major companies will create a new raft of bureaucracy for businesses of all sizes and hinder growth, claimed Russell New partner Vince McLoughlin.
The government introduced 1,466 new laws were introduced in 2012, compared with 1,355 introduced the previous year, according to research by legal information provider Sweet & Maxwell. McLoughlin believes the 8% increase is a sign the administration’s stated aim to reduce needless admin for businesses may be running into difficulties.
“As more multinationals are thrust into the spotlight for tax avoidance… the red tape is only going to increase and thus cause more unwanted headaches for UK SMEs, he said.
“With 95% of all UK firms classed as micro-businesses, there is little doubt they are the lifeblood of our economy. If just a small portion took on one employee each, unemployment figures would drop dramatically. They need all the help they can get to grow.”
