Tax evasion: act now or we will, Labour tells government

20 May 2013

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The UK's opposition Labour party, tapping into widening public anger over corporate tax avoidance that has been brought into sharp focus after tax evasion charges against Google and Amazon, wants the government to push for new international rules to force companies to report profit and tax payments country-by-country.

Campaigners say the move, which is receiving increased support internationally despite strong opposition from business, would deter companies from shifting profit into tax havens where they have no staff or sales.

Prime Minister David Cameron has said corporate tax avoidance will be discussed at the annual summit of the Group of Eight leading industrial economies, which Britain is hosting next month in Northern Ireland.

He has urged companies to be more transparent but has only proposed voluntary measures.

Labour leader Ed Miliband has vowed to rip up the rule book when he becomes prime minister and go it alone if there is no international consensus to tackle multinationals engaging in massive tax avoidance.

In an interview with the Observer, Miliband Cameron to find agreement at the G8 summit of leaders next month around an ambitious agenda forcing corporate giants to pay their fair share.

He said that if Cameron fails, he himself as prime minister would unilaterally act to make multinationals operating in the UK more transparent about the money they make here, the movement of cash around their corporate structures, and the justifications for the tax they pay.

He would also increase the resources of HM Revenue and Customs to strike at tax cheats.

Miliband, who will speak at a Google event in Hertfordshire on Wednesday, said he believed some multinationals, including the internet giant, were not living up to their responsibilities to society.

Companies say country-by-country reporting would impose unreasonable administrative burdens.

But campaigners say firms fear being embarrassed by highlighting how they frequently pay low or no taxes in countries where they have big sales and how they report big profits in tax havens.(See: Under fire for evading UK taxes, Google's Schmidt seeks to blame system)

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