Tax Avoidance and Multinational Companies Debate
Full Debate: Read Full DebateMike Wood
Main Page: Mike Wood (Conservative - Kingswinford and South Staffordshire)Department Debates - View all Mike Wood's debates with the HM Treasury
(8 years, 6 months ago)
Commons ChamberLet me come on to that point.
It did not take long for independent analysis to show what a derisory sum the Google tax payment was. The word “derisory” is not just my description, but the word used by the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, as well as many others. Google had a UK turnover of approximately £4 billion in 2014-15. If profits here were similar to those across the whole group, about a 25% return, that implies £1 billion-worth of profits. If the standard 20% corporation tax is levied, that implies a £200 million tax bill for the one year, not the £200 million paid by Google for the decade. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, independent assessors have estimated that the Google tax rate for the past decade was 3%.
Companies such as Simworx in my constituency are extremely successful at selling products around the world that are based on their intellectual property developed in the UK. Does the shadow Chancellor think the profits from that intellectual property should be taxed in the country where those products are sold, or here in Britain?
The economic activity definition has to be examined when profits are assessed. I will come on to that point because it is valid and reasonable.