Should Google, Amazon and Starbucks pay more tax?

They may have been criticised by MPs of all sides in recent months, but new data shows that online retail giant Amazon actually pays a higher effective rate of business tax in the UK than dozens of other well known companies.

The BBC has reported that ‘multinationals such as Amazon and Google have…come under fire for paying little UK tax.’ Prime Minister David Cameron has called for global action on tax avoidance while many people are boycotting companies such as Amazon and Starbucks because of their tax practices.

However, data for Tax Credits shows that Amazon actually pays an effective corporation tax rate of 60.8 per cent, higher than other companies including Visa, Samsung, Coca-Cola, McDonalds and HSBC. The online retailer most recently paid £1.88 million of corporation tax on profits of £3.092 million, according to the company’s latest accounts. Almost two thirds of Amazon’s profits went on UK business tax.

The 2011 rate of corporation tax in the UK was 26 per cent and many other large companies paid an effective business tax rate higher than this. Nestle paid £12,208,000 in tax on profits of £23,552,000 – an effective rate of 51.83 per cent. Wal-Mart’s effective tax rate was 42.96 per cent, Unilever’s was 34.58 per cent and Microsoft paid an effective tax rate of 28.59 per cent.

Other major firms did pay tax at well below the 26 per cent rate, however. Kraft, who bought Cadburys in 2011 – paid no corporation tax on profits of £16,873,000 and turnover of over £1.2 billion. Other companies who paid no corporation tax in their last accounts include Starbucks, BP, Toyota and Google.

The data below shows how much UK corporation tax a number of major companies pays. It also shows their tax payments as a proportion of their turnover.

What do you make of these figures? Should major companies be forced to pay more tax? Please share your thoughts below.

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