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The French have got it right on Sweetheart Deals

1st Jun 2016
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The British Treasury will have egg on its face if France eventually collects all of the tax that it is claiming from the multinationals.

The French finance minister has decided to play hardball, organising raids on the offices of Google and McDonald’s amongst others in an effort to bring in the cash that he clearly believes is due to the nation.

Google, Starbucks and McDonald’s must have been laughing at our government when, like the Queen, they were allowed to choose how much tax they wished to pay.

Even Her Majesty might have been embarrassed at suggesting the kind of levels that were eventually accepted in some of these cases.

Ministers did their best to show a brave face after years of negotiation had brought in a pittance from some of the richest organisations on the globe. Surely behind-the-scenes, they must have been deeply embarrassed at a failure to take a fantastic opportunity to ensure that the Tax Gap could be reduced from its current ludicrous level.

It is all very well to chase chip shop owners and other minor tax evaders for the odd few hundred or thousand pounds here and there. Indeed, some might suggest that is exactly what HMRC is employed to do.

However, the big bucks are not going to come from small fry in a high street up north.

While one has to accept that the methods used by the mega rich corporations to minimise tax liabilities are sophisticated and in many cases do not step beyond what is permitted by law, there has to be more to defending and supporting the economy than just saying thank you when they offer a laughably inadequate settlement.

If the law does not force these companies to pay tax where they make their money, then the law should be changed. Going a step further, should France be successful in its efforts, the suggestion that the UK cannot collect tax using similar legal means in future would be indefensible.

On the other hand, some of the techniques that they use might well be open to challenge already. If that is the case, with literally billions at stake, surely it is worth spending some money on what would admittedly be a long, hard struggle in the Courts.

It will be fascinating to see how long it takes the French to get to a conclusion and how successful they are. In the meantime, those of us on the other side of the Channel will just have to watch our taxes going up to fund shareholders in some of the richest organisations in the world.

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