I personally have broken the story about Marks and Spencer avoiding corporation tax by setting up their website in Ireland. But unlike Amazon and Google they do not sell any of my fine books about tax avoidance so there can be no accusation of hypocrisy this time.
Now, let’s be clear, there’s nothing illegal about this. Also, the argument that “tax avoidance is legal” is dead and buried following the release of my GAAR guidance. So this must not be legal as it is tax avoidance.
However, this is legal and tax avoidance, but not caught by the comprehensive GAAR guidance I wrote (due to the other members of the panel inserting loopholes into my guidance, I hasten to point out). This does not contradict that statement I made in the slightest. Obviously.
But, the similarities with Amazon are shocking. Look:
Amazon immorally don’t pay corporation tax in the UK where the sales occur. M&S immorally don’t pay corporation tax in the UK when the sales occur in Germany, France, Belgium and everywhere else but the UK.
Amazon are essentially a foreign business trading with the UK. M&S are essentially a UK business trading in the UK (including when they trade with other countries but from a non-UK country).
Amazon are being accused of not being taxed on their full profits in the UK. M&S are being accused of not being taxed on their full profits in the UK.
See? Identical situations.
So if you accept that Amazon is avoiding UK corporation tax, the completely uncontradictory conclusion is that M&S are also avoiding UK corporation tax. As Iven Horrocks has pointed out in his illuminating comment on another post, the UK should tax both companies on exactly the same basis because although the facts appear to be completely different, the outcome is exactly the same of the UK not getting any money!The common denominator here isn’t one of a continual persecution complex by UK tax campaigners. No, it is not. It is one of morality.We in the UK are morally entitled to all the tax from both M&S and Amazon on online sales occurring here and occurring abroad respectively. The reason I know it is a moral issue is that the people who think they should benefit are upset that they are not benefiting as much as they want. And they are complaining louder than everybody else so I think we should listen to them.
If that’s not a compelling moral case, I don’t know what is.