Okay Google, how do I avoid tax?

January 31, 2019

 

On average each year, tax evasion loses the UK £34 billion. To put that into perspective, running the entire NHS for a year costs £116.4 billion. This means that tax evasion could pay for nearly a third of the NHS annually; a fact that I will be petitioning to put it on the side of a UNI 1 bus before the end of this term.  

 

Some of the biggest tax offenders are much loved household names, such as Amazon, Starbucks and Vodafone. Google, however, is the latest company to join that list. Now facing a huge fine of £130 million by British tax authorities, Google represents only a fraction of the companies and celebrities who defraud our legislative systems every day, effortlessly and without remorse.

 

The leader of the Labour Party, Jeremy Corbyn, remarked ‘Google is paying an effective tax rate on its UK profits of around 3%’, despite the corporate tax rate in the UK being 19%, with an even lower rate of 12.5% in Ireland.’

 

Thankfully for struggling multi-million-pound businesses such as Google, there exists schemes such as ‘transfer pricing’, where companies can legally move large amounts of their profits to tax havens such as the Bahamas or Bermuda, where there is little or no tax. This scheme is one of many that helps corporations to avoid UK tax. It is perhaps no coincidence, however, that these laws exist, considering much of the legislation concerning tax avoidance is advised by individuals employed within accountancy firms, who then use their knowledge of the laws to avoid tax.

 

Even our most treasured British icons have been participating in these shady activities, more specifically Mr David Bowie, who moved to Switzerland in 1976 to avoid the 83% income tax for high earners. A more recent example may be Cristiano Ronaldo, who managed to avoid prison this week, despite being found guilty of tax evasion. Instead he was let off with a fine of a mere €18.8 million.

 

The blame for tax evasion clearly lies with a myriad of culprits. The government’s loop-holed legislation, the greed of elites, and the accountancy firms who enable it are all to blame. These firms sell their ‘expertise’, in order for their clients to maximise their profits.  Not only does this directly lose the UK money, but it normalises the practice and embeds it in ‘enterprise culture’ for the future.‘

 

Having said all this, I can most heartily say I would avoid tax, if it applied to me that is. But why? It’s no longer corporate greed, but human nature to desire more, to have more wealth, and to eventually shop at M&S. The appeal is obvious, and for some as easy as buying a lottery ticket, although with odds decidedly more favourable. As human beings, we love to cheat the system, to try our luck, especially when corruption is engrained within our society regardless.

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First published in 1965, InQuire is the University of Kent student newspaper.

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