The report just shows that the PAC fundamentally misunderstands the relevant law, how companies operate, and how tax enquiries work.
A few examples:
- The £130k actually collected by HMRC is compared to amounts asked for by other countries, and found wanting. But amounts which have been asked for are always going to be overstatements. It's like saying someone undersold their house, if they sold for £200k and a similar one was on the market for £300k, as clearly theirs would be worth £300k too. But the £300k is an aspiration, and there is no guarantee that it is at all realistic.
- The report refers to the previous PAC report, which found that "to avoid UK corporation tax Google relied on “the deeply unconvincing argument that its sales to UK clients take place in Ireland, despite clear evidence that the vast majority of sales activity takes places in the UK”". The "clear evidence" is that a Google employee told the PAC that he thought there was sales activity going on. It seems extremely unlikely that this person (not a tax person) understood the definition of "sales activity" for tax purposes, which has a lot of nuanced precedent about it; so I'm not at all sure why the PAC thinks that their impression should be more reliable than HMRC's.
- On the issue of transparency vs confidentiality, they seem to miss the point completely when they say "We have not, for example, seen any evidence to prove that confidentiality results in more tax being raised than would otherwise be the case". That's not why you keep things confidential!
Biting the hand that feeds IT
