Tax justice advocates have criticised George Osborne's announced clampdown on tax avoidance as "hollow" and "yet more hypocrisy".
Murray Worthy, tax justice campaigner for the charity War on Want said: "There is nothing in today’s hollow announcement that will tackle the billions avoided by big businesses like Amazon and Starbucks. The only thing that is new is a few million pounds more investment in tax inspectors which is a drop in the ocean compared to the billions this government is cutting from HMRC.”
A new report released on 3 December by War on Want reveals that the centrepiece of the government’s plans to tackle tax abuse will have no impact on the tax avoided by Amazon, Google and Starbucks. The report, Avoiding Avoidance, shows the government rejected the opportunity to recover up to £5.5 billion a year via a General Anti-Avoidance Principle, instead opting only to target "artificial and abusive" tax avoidance through an "anti-abuse" rule.
Murray Worthy continued: "The government’s tax inspectors are only as good as the rules they have to work with. Yet this government’s plans are only focusing on evasion and a tiny fraction of avoidance on the very margins of what is legal. Despite their rhetoric, this government is giving a green light to multinationals like Amazon, Google and Starbucks to continue avoiding billions in tax. This is yet more hypocrisy from a government that is all too keen to talk tough on tax avoidance, yet in reality is doing almost nothing to recover the billions lost each year."
The report is expected to add further pressure to the government to act as it coincides with the Public Accounts Committee’s stinging criticism of the government’s approach to tax-avoiding companies like Starbucks, Google and Amazon. The Committee found that the government’s approach “looks way too lenient”, “lacked determination” and criticised the “pervasive acceptance of the status quo”.