Leader: Corporate tax loopholes must be closed

Amazon is under fire over its tax arrangements. Picture: TSPL
Amazon is under fire over its tax arrangements. Picture: TSPL
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THE taxman forces the closure of one Scottish business every working day of the year for failure to pay what is due to HM Revenue & Customs. This is just one of many brutal facts thrown up by the recession from which we are struggling to emerge.

Against this background – and every one of these instances involves the crushed dreams and thwarted hopes of a Scottish entrepreneur – it is breath-taking to learn that online retail giant Amazon can pay a tax bill of just £2.4 million on UK business with a turnover of £4.3 billion.

Any examination of the morality of such a state of affairs inevitably gets bound up in an angels-on-the-head-of-a-pin argument on the technical difference between tax avoidance and tax evasion.

But it is an argument that does not exist in a vacuum. It has to be considered in the context of an age of austerity in which real financial hardship is being experienced as a result of welfare cuts, and front-line public services are suffering crippling cuts. Every pound of tax avoided by a multinational corporation operating in Britain is a pound that has to be saved elsewhere.

It is this we must bear in mind when asking if HMRC needs to amend the way it treats companies such as Amazon – and Starbucks before it, and with many others falling into a similar category. And we should ask ourselves if the principle declared by Prime Minister David Cameron when he came to power – that “we are all in this together” and that those with the broadest shoulders must bear the heaviest burden – applies only to individuals or whether it also applies equally to corporations.

Surely corporate entities must pay a fair contribution in the effort to get the country through this most difficult of times. But it is too much to ask for to expect companies to pay tax out of the goodness of their hearts. Chief executives make the point that they have a duty to their shareholders to make as much money as possible through whatever legal means, be it making staff redundant, putting up prices or – yes – paying less tax. Expecting them to voluntarily surrender millions of pounds that they have saved by clever use of tax loopholes is an honourable position – but

an unrealistic one. The brutal truth is you cannot appeal to a shareholder-owned corporation’s better nature.

What governments can do, however, is bring skill and imagination to the task of closing those loopholes and reducing room for manoeuvre. The efforts to achieve this must redouble, and be pursued with the same relish the government has pursued public sector cuts.

We need a tax system where the fair amount a company pays is the sum required of it by law. If it is confusing tax laws that need to be amended then politicians need to do that. The European Union must also play its part in this, or face Britons losing even more confidence in the institution.

IVF rules are tough but fair

A POSTCODE lottery in health provision is cruel and unfair. It goes entirely against the spirit of the NHS to have one patient denied something that is provided to another simply by virtue of an accident of geography and an administrative quirk.

When the NHS service in question is IVF fertility treatment that disparity across the country is even more cruel, given the hopes invested in such procedures. So, it is right of the Scottish Government to introduce a standard set of criteria across Scotland to even out inconsistencies.

Inevitably, however, some areas with generous provision will see the quality of service reduced – for example from three cycles of IVF to just two. This is regrettable, but inevitable.

What some patients may find harder to accept are new strictures on who will qualify for treatments – including the requirement that the mother is not obese and that both would-be parents desist from smoking and drinking alcohol for the course of the treatment.

This is a tough decision to take, and ministers should be congratulated for having the toughness to take it. It is not a judgment on whether people should be slimmer or have a more healthy lifestyle – rather, it is a clinical assessment of the factors that contribute to making a course of IVF treatment a success or a failure.

The hard truth is that if a would-be mother is obese, there is far less of a chance of her conceiving through artificial means. For clinicians to ignore such evidence, they would be failing in their duty to provide value for the taxpayers’ money, but also – more importantly – they would be failing to provide a treatment with the best possible chance of success.