Financial Transparency Coalition

The Sunday Times did an expose of Google’s tax affairs Sunday. I’ll declare an interest: they asked me to help the investigation, and I did. The findings? Google has avoided £3 billion of tax worldwide over the last five years. It’s tax rate outside the USA is just 3%. In 2009, if Google had declared profits in proportion to sales in the UK in the ratio that the worldwide accounts showed (about 35% profit pre tax) then the expected UK tax bill would have been about £190 million.

Tax Research UK published a new report this weekend on the administration of the UK’s Register of Companies by Companies House, the agency responsible for it on behalf of the UK government’s Department of Business, Innovation and Skills. The report extended the review to look at the administration of corporation tax returns by H M Revenue & Customs, the UK’s tax agency. In combination these are the two main agencies with responsibility for registering and regulating companies in the UK. The Task Force on Financial Integrity and Economic Development funded the study.

Vanessa Houlder has written an excellent article in the Financial Times this morning on the subject of tax and reputational risk. As she notes:

One lesson for companies is clear: tax is becoming an important source of reputational risk. Increasingly, businesses are weighing up whether they are vulnerable to attack and how they should respond if they become the target of a campaign.

The article has, of course, been inspired by the latest Vodafone protests,but it is much broader in it’s focus than that. It does, in particular, look at the tax...

I have suggested before, and I will suggest again, that transfer pricing is contributor to the tax gap. Oddly (!) the tax profession – and especially those parts with links to secrecy jurisdictions – deny this. Many are not convinced by such arguments. Take this testimony given by the IRS to Congress in July:

Testimony of Stephen E. Shay Deputy Assistant Secretary (International Tax Affairs) U.S. Department of the Treasury Before the U.S. House Committee on Ways and Means July 22, 2010 Chairman Levin, Ranking Member Camp and members of the Committee, thank you for the...