Mr. George Osborne, the UK chancellor of Exchequer has put greater effort in collection of unpaid tax and dealing with tax avoidance. As a result of this Starbucks Corporation the world’s biggest coffee shop operator has agreed to pay more tax in Britain after being reprimanded by the lawmakers for being involved in tax evasion.
Mr. Osborne is now putting more money and effort in the project to handle those who are evading tax. For these 77 million pounds has been spent in improving Her majesty’s Government revenue and customs’ technology and to strengthen its staff, which resulted it in getting an extra 2 billion pounds unpaid tax recovery from Starbucks Corporation .
According to the 13th November hearing in parliamentary hearing, Starbucks Corporation , Amazon.com, Inc. and Google Inc were accused of using multifaceted accounting standards to misrepresent the annual income in order to minimise the tax liability. Osborne expects a 10 billion pound collection of unpaid tax by December and hopefully he would reduce a tax liability of 1 billion pounds for the bureaucracy surroundings as carbon reduction commitment.
Managing the fiscal deficit
In order to reduce the fiscal deficit, Osborne has to appease lawmakers by making the system strong enough for the recovery of unpaid tax as well as for implementation of a new stricter plan of rule for reduction tax avoidance.
Some of the UK companies are involved in transferring their funds to some tax havens in order to minimise tax liability.
Osborne has not failed to notice that some of the UK individuals have money in Swiss bank accounts to evade tax. Thus he has plans to collect a as much as 5 billion pounds by implementation of the stricter system.
Need to do more
The company evaded a corporation tax bill of 5 million pounds by paying royalty fees of 4.7% to its Dutch division so as to use their patented rights.
Last year Google Inc paid 6 million pounds as tax.
Amazon.com, Inc. was a laughing stock among the committee members of the testimony, a month earlier, about how a profit of $25 million it has made by sales amounting to 9.1 billion Euros across Europe.