The Lib Dems are looking to introduce a minimum tax charge on multinational companies based on their global profits as part of this year’s budget negotiations after firms such as Amazon, Google and Starbucks outraged the public over how little Corporation tax they pay in the UK.
Tim Farron, the Lib Dem party president, said it was “right” to look at a tax on global profits rather than UK profits if multi-national companies choose to structure themselves in a way it looks as is they make no profit in the UK.
According to figures published by the Commons Public Accounts Committee in 2011, bookseller Amazon's UK sales were £2.9bn but the company only paid £1.8m in corporation tax. The company claims its European headquarters are based in Luxembourg and that Amazon operates a single European company, Luxembourg-based Amazon EU S.a.r.L, with Amazon.co.uk operating just as a service company.
Farron told The Telegraph: “We are looking at a minimum tax on a company’s global profits. If these companies are structuring their affairs in a way that means they make no profit in the UK, then it’s right to look at the global profit figure – that is made public.”
Mr Farron said he thought a rate of around 25% on the profits a business made in the UK would be “about right”, but the details had not been set, and the idea was at an early stage and being discussed by the Lib Dems.