Last week the Google organisation apparently agreed to pay the sum of £130 million in settlement of a deal agreed with HMRC regarding tax upon its UK revenues generated between 2005 and 2015.
At least I think those are the bare facts – it is difficult to tell because ever since the world and his dog have been out there ‘spinning’ the outcome in the hope of persuading us to form a variety of different conclusions upon the matter.
Google itself is stressing that there was no admission of any guilt or liability on its part. Matt Brittin, effectively Google’s head of operations for Europe if I’ve got it right, seemed to explain to the media that Google “had complied with the law then … and, now the law has changed, will comply with it now”. To me this was a quirky statement to say the least, as it seemed simultaneously to maintain both that Google had done nothing wrong [but, if that was the case, then why pay anything?] and that somehow the UK law in this area has changed [something that, if true, has been brought to my attention by nobody, still less the Government].
The Chancellor George Osborne has spoken with satisfaction of Google’s deal – (to the effect): “Labour did nothing about the level of tax that the big multi-national companies pay in respect of their UK operations during their time in office. We always said that we’d do something about it, and now we have …”
In response, Labour’s Shadow Chancellor John McDonnell did the rounds of the radio and television studios yesterday to complain that (as usual) the Tories were letting their Fat Cat friends in business get away with murder – “Google should be paying ten times that … when you compare what they’re paying to what the average British taxpayer has to fork out, it’s not fair”.
Now I’m neither a rabid free-marketeer nor a Fat Cat banker, but – irrespective of how little any corporation, or even any citizen taxpayer, pays HMRC in the way of tax – what I fail to understand is that those waffling ad nauseam about ‘tax ‘avoidance’ and/or ‘tax evasion’ [and just about everyone seems to get confused about which is which], and indeed the ‘unfairness’ of people and organisations (who are rich enough) hiring lawyers and accountants clever enough to get around whatever laws individual countries may introduce, seem conveniently to ignore the glaring truth that if the Government actually enacted legislation that covered the point they’re complaining about … then nobody would be able to do anything but pay up on the nose.
Further, personally I see nothing wrong whatsoever in anyone arranging his tax affairs in such a way that he ends up paying as little tax as possible – just as long as he always complies with the law as it is written and enforced in any country in which he resides or is required to render taxation.
What on earth is wrong with that?
It’s no use any far-Left activist shouting from the roof tops about moral rights and such like.
The law of the land sets out how much tax everyone has to pay upon what income or gain … we all have to pay up … and that’s that.
Presumably – that is, unless the Establishment is acknowledging that de facto it only has access to lawyers and legislation-drafters who are less intelligent and/or able than those available to wealthy organisations and individuals out there in the street – it cannot surely be beyond the wit of Man for the UK Government (any UK Government) to devise legislation tomorrow that would ensure that every company operating within these shores must pay [whatever the current Corporation Tax rate is on companies in the UK] upon its net profits here.
That’s my view anyway. Perhaps any Rust readers possessed of greater intelligence – or indeed greater understanding of tax laws – than mine could offer enlightenment if I am wrong.
So – assuming my conceited perspective above is correct – if the successive governments of the past thirty years have consistently failed to bring forward such legislation, why haven’t they?
Is it as simple as because they don’t want to offend their Fat Cat chums (and/or risk affecting said Fat Cats’ very healthy political donations to Party coffers)?
Is it because they don’t want to kill the Golden Goose (or Geese) … i.e. offend those organisations which provide enormous amounts of prestige, employment and well-being to the UK economy generally and which, if dealt with more harshly tax-wise than they would be elsewhere, would simply bugger off to other countries taking all these beneficial things with them?
I mean … what other reasons could there possibly be for a UK Government not to bring in ‘perfect legislation’ that covers the point causing concern … and instead just opt to make encouraging noises designed to promote such companies to make a half-baked deal with HMRC (without any admission needing being made by anyone that they have done anything wrong, naturally)?
Is it just an admission that the Government feels powerless to force multi-national companies of a certain size and financial power to do anything – and thus an ‘any old how will do’ cosmetic deal like this recent Google one is, sadly, the best that can be achieved in the circumstances?