A study published this week with the support of the Tax Justice Network has suggested that the top 50 FTSE 100 companies in the United Kingdom have avoided some GBP20 billion in corporate taxes since 2000.
The study, entitled 'Mind the Tax Gap' was authored by Richard Murphy, and according to the TJN (which states in its website that its members have a "shared concern about the harmful impacts of tax avoidance, tax competition and tax havens"), is the first published, statistically rigorous attempt to measure the size of the UK's 'Corporation Tax Gap'.
The report defines this as the difference between the expected and actual rates of corporate tax paid by firms in the UK.
The TJN-supported report suggested that the 50 companies studied paid an average of 5.7% less corporation tax than expected rates from 2000 to 2004, resulting in them paying GBP20 billion less tax on their profits than expected rates would suggest appropriate;
Extrapolating from these figures across all UK companies, Mr Murphy suggested that the likely total UK 'Expectation Gap' may be as much as GBP9.2 billion a year, or about 28% of corporation tax receipts in 2004-05.
However, reports in the UK media have suggested that many companies located in the United Kingdom are far from happy with their tax lot, and are considering relocating to countries with more favourable regimes.
Speaking to The Times on Tuesday with regard to the government's ongoing crackdown on corporate tax avoidance, Linklaters tax chief, Guy Brannan warned that:
"The government's attitude is becoming counter-productive. If companies do not have to be headquartered in the UK and a large proportion of their business is elsewhere, they are investigating moving outside the UK."
The full text of the 'Mind The Gap' tax report can be found in the Tax News Resources section
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