17.03.2016 | Ray Dzikiti | General
Global firms including Starbucks, Google, Vodafone and Amazon have come under fire for tax avoiding in the UK. Through their legal tax avoidance schemes these firms face up to £300 penalties which are obviously dwarfed by the millions in potential profit they gain.
The latest company to be in the headlines for their avoidance is Google, in 2012 Google’s UK division paid £11.6m to the treasury on UK turnover of £3.4bn, which hardly seems like a fair figure for a firm that earns such a high turnover when compared to other firms who pay large tax bills that some firms such as Google are able to avoid.
Although tax avoidance schemes may be legal it doesn’t mean that they are ethical. The advantage for these schemes is that firms get to keep larger amounts of their profit, but does that outweigh the potential disadvantages? Potential disadvantages include damage to public image which can lead to withdrawal of custom. If this does occur the number of customers needed to be lost in order to affect Google’s £3.4bn turnover must be very extensive which I personally doubt would happen. Google is the world’s most used search engine, on top of which its phone market is growing along with their other auxiliary products including Ad words. All these are very popular products of Google which are used in everyday life.
It’s not just these large global firms that use tax avoidance schemes. There are other smaller firms which use the same tactics but go unnoticed under the “tax shaming” radar due to their size. So that begs the question “if other firms are going unnoticed for tax avoiding, is it morally correct to tax shame large global firms?”