Government fails to take on tax dodgers

Campaigners fiercely criticised the coalition after the Commons public accounts committee published a damning report accusing Starbucks, Google and Amazon of "immorally" minimising tax bills.

The committee warned many multinationals were exploiting tax laws to move profits clearly generated in Britain offshore and called on the government to "get a grip."

It was also strongly critical of HM Revenue and Customs, accusing it of looking "way too lenient" and "selective" over the way it deals with big-name firms which are "getting away with" paying little or no corporation tax.

The committee condemned the firms for the "unconvincing and, in some cases, evasive" evidence they gave as to why their corporation tax payments are so low.

It called for companies that abused the system to be "named and shamed" for failing to meet tax obligations and urged the government to toughen up legislation.

Chancellor George Osborne said yesterday that he will announce extra investment to crack down on tax avoidance by global companies with British operations.

Speaking before Wednesday's autumn statement he claimed the government would bolster the Revenue team that deals with multinationals.

But campaigning charity War on Want accused the government of "breathtaking" hypocrisy over the issue of tax avoidance.

The charity published research suggesting 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.

War on Want tax justice campaigner Murray Worthy said: "The government's hypocrisy on tackling tax avoidance is breathtaking. Osborne and Cameron are happy to talk tough on tax.

"But, in reality, its plans will only go after the small fry on the fringes, while giving a green light to multinationals like Amazon, Google and Starbucks to continue avoiding billions in tax."

Meanwhile, due to intense pressure including a customer boycott, Starbucks said yesterday it was looking at its "tax approach."

The US coffee firm said: "We are looking at our tax approach in the UK. The company has been in discussions with HMRC for some time and is also in talks with the Treasury."

The announcement cut little ice with anti-tax avoidance campaigners. UK Uncut's Jane Harvey said: "Starbucks's announcement is a blatant admission of guilt that it has intentionally avoided tax in the UK for years.

"It is not up to Starbucks to promise it will pay a bit more tax when it suits it, it's up to the government to force companies to pay their fair share."

The group has announced a national day of action on Saturday with protests planned at Starbucks stores across the country, including Birmingham, Glasgow, Cardiff, Portsmouth, Truro and Shrewsbury.