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The Public Accounts Committee has called on HMRC to publically “name and shame” individuals and companies which use tax avoidance schemes. The Committee also welcomed a government move to ban tax-avoiding companies from being awarded government contracts.
Margaret Hodge MP, chair of the PAC, slammed schemes which promote and allow individuals and companies to aggressively avoid paying tax. She was speaking months after Amazon, Google and Starbucks were hauled in front of the PAC committee to answer questions on the structure of their companies and how much tax they pay in the UK, which led to widespread condemnation of those companies in the media.
Hodge said: “Since our hearing, the government has announced that it is consulting on draft rules designed to allow departments to ban tax-avoiding businesses from being awarded government contracts. This is a welcome move but we will want to monitor closely how any such rules are applied in practice.”
Amazon recently received a subsidy from the Scottish government after it opened a warehouse in Dundee, a move criticised by Waterstones m.d James Daunt.
Hodge added: “We have seen how public anger and consumer pressure can influence large companies, such as Starbucks, to behave more responsibly. HMRC should publically name and shame those who sell or use tax avoidance schemes in order to discourage such activity.”
Hodge also called on HMRC to crack down harder on companies which avoid tax. “With at least £5bn lost to tax avoidance each year, HMRC has got to get much more robust in its approach,” she said.
Yesterday Prime Minister David Cameron denounced “aggressive” tax avoidance by international corporations while speaking on the first day of a trade mission to India, but said that the practice was difficult to outlaw, according to the Independent.
“Some would say, 'Just change the law to make aggressive avoidance illegal', but, with respect to my friends in the accountancy profession, it is difficult to do that,” Cameron said.