HMRC defends its record on taxing multinational corporations

Posted on: 17-02-2016

Following widespread media scrutiny of the rate of tax paid by Google, HMRC has taken the unusual step of issuing a press release defending its record of dealing with the search engine giant in particular, and multinational corporations in general.

The statement, or ‘factsheet’, claims to be ‘setting out some facts to help dispel myths which have arisen about how HMRC ensures compliance among multinationals’ and argues that ‘aggressive tax planning, by which some multinationals exploit the complexity of the international tax system to reduce their tax liabilities… is a global issue that requires a global solution.’

In particular, it attacks ‘myths’ about the settlement with Google which saw the US company pay an additional £130 million in tax following a six-year investigation by HMRC. The press release states that the figure is ‘over and above the tax that they have paid for past years (or would pay for the current period were it not for HMRC’s enquiry)’, and argues that ‘the current tax charge that Google took in its accounts increased significantly from 2012, when the company first disclosed that it was under enquiry and made a provision for additional tax’.

On the wider matter of its dealings with major corporations, HMRC claims to have:

HMRC also denies that there are any ‘sweetheart deals’ with multinationals or that government ministers are involved in tax investigations and negotiations.

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