Bloomberg News

U.K. Lawmakers Clash With Watchdog Over Company Tax Deals

October 31, 2012

British lawmakers clashed with the government’s spending watchdog after they were refused details of agreements between five large companies and the tax authorities.

Members of Parliament’s Public Accounts Committee were rebuffed today when they asked Amyas Morse, head of the National Audit Office, to agree to hand over details of the settlements. Morse said in June he backed the findings of Andrew Park, a former High Court judge, that the agreements had been “reasonable.”

“It’s very difficult for us to accept your judgment,” said Margaret Hodge, the opposition Labour Party lawmaker who chairs the committee. Austin Mitchell, another Labour legislator, said Morse’s refusal showed he doesn’t “trust the committee.”

The committee in London called Morse to testify in public after failing to persuade him to disclose the companies’ tax affairs during a series of closed-door meetings. Morse said he is not “willing to commit a criminal offense” by agreeing to its demands and would face a “shower of writs” if he did. The companies have not been named.

The British government has pledged to crack down on what it sees as abusive tax-avoidance schemes, including a Barclays Plc (BARC) plan that denied the Treasury more than 500 million pounds ($800 million).

In a separate parliamentary hearing today, U.K. tax officials defended their strategy for ensuring large businesses pay the tax they owe, saying it had generated an extra 29 billion pounds in revenue since 2006.

“It’s entirely right we expect multinationals to pay tax in the jurisdiction where they are generating their profits,” Jim Harra, director general of business tax at Her Majesty’s Revenue & Customs, told lawmakers. “The rules are designed to ensure the proportion of profits that are relevant to the U.K. gets taxed in the U.K.”

Officials refused to comment directly on the case of Starbucks Corp. (SBUX:US), which has paid no corporation tax in the U.K. over the past three years.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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  • SBUX
    (Starbucks Corp)
    • $81.83 USD
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    • 0.68%
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