Monday, 9 April 2012
Corporation Tax – not for the Multinationals
Two matters relating to the global free market have come to light in recent days. On Wednesday the Guardian reported that Amazon has generated sales of more than £7.6 billion in the UK without paying any UK corporation tax and yesterday the Telegraph reported that Apple paid only £10 million, in British tax, in 2010 despite accounting for an estimated £6 billion in sales.
If foreign based global corporations continue to expand their sales here, as seems almost certain under the current regulations, an ever increasing volume of business activity will be carried out with minimal tax paid and significant sums of sterling will pass into the hands of these foreign corporations. Since these corporations are not generally looking to buy UK produced products with this income, the most likely eventual use for this money will be purchase of UK property and businesses.
The Chinese, who accumulate huge sums of sterling, are always seeking to buy UK businesses with potential and, at present, we are heading for a situation where an ever increasing amount of UK assets will be in foreign hands and the people will be the employee ‘servants’ of these foreign owned businesses.
The continuing rise in unemployment must eventually lead to a reduction in the minimum wage and there is a danger that the dreadful employment practices of India and China will be brought to our shores in time.
It is our membership of the EU that allows these global corporations to trade in the UK. However, each corporation carefully selects the nation it will operate out of that will give the greatest advantage, including paying a minimum of tax. These benefits are given because the siting of the corporations usually brings benefits to the host nation through jobs and the local economy generally.
The only real solution is to leave the EU and install import controls on goods from other nations – unless a balanced trade agreement is reached.
It is likely that Francis Maude will see these untaxed profits of Amazon and Apple as an acceptable development since he wants to provide similar arrangements for as many of the global corporations as possible, here in the UK – hence the Tories desire to lower the top rate of tax.
It is not difficult to understand why Maude and the Tory backers are happy with these arrangements – but surely they are hugely to the detriment to the majority of British citizens.