Tax & Ethics Essay Example | Topics and Well Written Essays - 1000 words

Tax & Ethics - Essay ExampleThis paper will evaluate the role of companies, their professionals, and HM Revenue and Customs and will controvert whether ethical principles should be applied to the payment of levy. The four major sources used for drafting this paper are BBC, The Guardian, KPMG, and HMRC, because these sources were found potential for providing analytical information about the topic under consideration. However, only accompaniments and figures have been mainly taken from such sources, for news says tend to be biased depending on the writingers personal outlook. A BBC report dated on 21st November 2012 reflects that UK lost billions in lost revenues as a result of incorporate tax liftance by multinational corporations. The report points out that new tax avoidance schemes are emerging each year and the situation makes it difficult for HM Revenues and Customs (HMRC) to curb this issue. According to issue Audit Office, taxation authorities identified nearly 2,300 a voidance schemes between 2004 and 2011 (ibid). Since the actual figures of tax avoidance are not available, the UK government cannot estimate the stainless issue forth of loss. It has been identified that specialist tax advisers suggest best tax avoidance schemes for their clients and this practice significantly contributes to the issue. Recently, Margaret Hodge walloped the big four accounting firm for dowry companies avoid corporate taxes (as cited in Toynbee 2011). According to another BBC report dated on 3rd December 2012, some leading multinational companies including Starbucks, Amazon, and Google were severely criticised by UK government authorities for paying little or no tax. The UK government officials point that it is unfair for these companies to practice different schemes to avoid corporate taxes despite the fact that their UK operations account for hundreds of millions of pounds (BBC 2012). UK Prime Minister David Cameron states that international co-operation is nec essary to tackle this issue because some forms of tax avoidance are very difficult to spread over (David Cameron). In order to publicly express UK stance on tax avoidance, the HM Revenue & Customs publicly named top tax dodgers for the first cadence (as cited in King). Reportedly, Starbucks, Google, and Amazon are the three major multinational corporations that have practiced schemes to avoid corporate taxes. In addition, small businesses including Cheshire wine merchant, Menemis, and Brian Clifford Tattersall were also criticised for tax avoidance. Yet another BBC report says that Starbucks sold goods worth ?400m in UK in 2001 but paid nothing in corporate taxes (BBC news Business 2012). Starbucks managed to avoid corporate taxes by transferring some of its funds to a sister company in the form of royalty payments, buying coffee beans from Switzerland, and paying high interests range other parts of the business in the account of borrowing (ibid). Similarly, on the strength of so me well structured schemes, Google also notably reduced the amount paid in corporate taxes. As per reports, Google could trim down its tax bill by approximately $1bn a year by transferring profits to subsidiaries having number one tax rates (OCarroll 2011). A subsidiary located in Bermuda assisted Google to save nearly $3.1bn over a period of three years because corporate tax rate is zero in Bermuda (ibid). In response to this criticism, a Google spokesperson said we have an obligation to our shareholders to set up a tax-efficient