MPs criticise ‘voluntary’ tax arrangements for Starbucks and other big companies

Danny Alexander might be glad that a PR panic before the Public Accounts Committee published its report into HMRC and the ability of multinational companies to avoid paying their share of corporation tax means he could be able to visit a Starbucks again in the near future. But his remarks on Radio 4 this morning show what a mess our tax system has got into. As PAC chair Margaret Hodge observed on Radio 5Live, there is now ‘a danger that corporation tax is becoming a voluntary tax’, and the Chief Secretary to the Treasury’s remarks did little to diminish that impression. Alexander said:

‘I think what I’d say is, look, if any company wants to come to see HMRC to say we think we might be paying too little tax and we want to pay a little bit more and we think we owe a little bit more within the law, then of course, that is a good thing, but there are millions of small companies up and down this country who pay the proper amount of tax, day in, day out, who think like I do, that at a time of economic pressure, that at a time of austerity, it is vitally important that everyone pays the right amount of tax, because to be honest, if everyone else paid the right amount of tax, then everyone else could pay a little bit less.’

This all sounds very cosy, doesn’t it? That if a finance director of a multi-national company suddenly has a burst of altruism, they can pop along to HMRC, and, over a latte, they can discuss paying a bit more money to the exchequer.