Monday 19 November 2012
Vince Cable believes more needs to be done to prevent corporate tax avoidance in the UK.
The Business Secretary told the BBC's Andrew Marr Show that there are some "appalling stories of abuse" where companies are paying less tax than they should be.
His comments come after executives from Starbucks, Google and Amazon were questioned by the Public Accounts Committee about how they use European tax jurisdictions for their UK arms.
Mr Cable commented that the best off in society "have got to contribute more, and that includes companies".
"There's nothing more galling to small and medium-sized enterprises when they are paying [tax], and others are dodging it," Mr Cable said.
"Our own tax authorities have got to be very tough on things like royalty payments, which is where a lot of the subterfuge takes place."
The Public Accounts Committee discovered that Starbucks has made a taxable profit only once in its 15 years of operating in the UK.
The coffee house admitted the Dutch government had granted a special tax deal on its European headquarters, which receives royalty payments from its UK business.
Mr Cable noted that Starbucks claims to be making losses in the UK.
"I don't know whether they are not but you would need some pretty intensive investigation by the Inland Revenue to establish what exactly is going on, whether their transfer prices and their royalties are being fiddled or not," he told the BBC.
Posted by Steve Williams