Accenture and Capgemini, which both have lucrative contracts with HMRC are the latest companies to be drawn to the UK corporate tax avoidance row.
According to a report here on Contractor UK, which followed up a Sunday Times report, Accenture managed to reduce its tax bill to less than 3.5%, while Capgemini was able to pay its liabilities at a rate of less than 1%. The standard rate of UK corporation tax is 24%.
Accenture said it “pays tax in accordance with the tax legislation of each country in which it operates.”
So Indian suppliers don’t pay UK tax for onshored workers in the UK and others are minimizing theirs. Is anybody actually paying tax?
With the government calling for all of its suppliers to reveal UK taxes there could be more of these revelations.
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This is what, National Outsourcing Association Chairman Martyn Hart had to say:
“It is time for a change in the law to ensure that companies earning revenues from the taxpayer pay their fair share in taxes. That the largest of companies pay the least tax is a failure in the system, and this loophole needs to rectified. If companies earning from the government paid more tax, maybe there would not be such a great need for budget reductions.
“There is a worry that if companies had to pay their taxes, that price rises could result (as Andy Street, CEO of John Lewis says, companies that do not pay their fair share of tax in the UK have a price advantage: this is anti-competitive). But with such a congested, competitive marketplace, with a tendency to embrace shorter, more flexible contracts, there are so many options for buyer to go elsewhere – provided they have paid proper attention to contingency and built a robust strategy for exit.
“Attitude to taxes could become a differentiator. Of course, price, technology and service levels will remain crucial aspects of a bid, but maybe the company that pays the most tax could prove to be the most attractive bidder – The NOA would like to see the tax factor built into the public sector RFP evaluation process, to make sure companies with the most honest approach to taxpaying get the most business from government. HMRC would need to facilitate this, providing clear and open information and guidance to government departments needing to check potential suppliers’ taxpaying credentials. A scoring system, a tax attitude health-check is required – something transparent, for fair comparison between companies – so that organisations that are currently operating carefree, paying next to no tax, but perfectly within the law, have a more morally righteous code to operate under. “