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

Tax & Ethics - Essay ExampleThis paper will evaluate the routine of companies, their professionals, and HM Revenue and springer and will discuss whether ethical principles should be applied to the payment of revenue enhancement. The foursome major sources used for drafting this paper are BBC, The Guardian, KPMG, and HMRC, because these sources were found potential for providing analytical information astir(predicate) the topic under consideration. However, only facts and figures have been mainly taken from such sources, for news disc everyplaces tend to be biased depending on the reporters personal outlook. A BBC report dated on 21st November 2012 reflects that UK lost billions in lost revenues as a result of corporate tax avoidance by multinational corporations. The report points out that new tax avoidance schemes are emerging each year and the situation makes it unmanageable for HM Revenues and Customs (HMRC) to curb this issue. According to National Audit Office, taxation authorities identified just about 2,300 avoidance schemes between 2004 and 2011 (ibid). Since the actual figures of tax avoidance are not available, the UK government cannot estimate the dead on target amount of loss. It has been identified that specialist tax advisers suggest best tax avoidance schemes for their clients and this utilization importantly contributes to the issue. Recently, Margaret Hodge walloped the big four accounting firm for helping companies avoid corporate taxes (as cited in Toynbee 2011). According to another(prenominal) 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 Dav id Cameron states that foreign co-operation is necessary to tackle this issue because some forms of tax avoidance are very difficult to phone (David Cameron). In order to publicly express UK stance on tax avoidance, the HM Revenue & Customs publicly named top tax dodgers for the first time (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 vigor 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 pass judgment other parts of the business in the account of bo rrowing (ibid). Similarly, on the strength of some vigorous structured schemes, Google also notably reduced the amount paid in corporate taxes. As per reports, Google could push down down its tax bill by approximately $1bn a year by transferring profits to subsidiaries having base 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