Facebook, the social network colossus, paid only £4,327 in corporation tax in 2014. That’s less than the amount paid by a British worker who, on the average salary of £26,500, would be liable for £5,392.80 in income tax and national insurance contributions.
Facebook made a staggering profit of $2.9bn – this is at a time when more than one in three NHS trusts in England have deficits with a combined total of £241m.
It is not only Facebook who is failing to pay its fair share. Starbucks have paid a miserly £8.6m in corporation tax in the 14 years between 1998-2012, despite making more than £3bn in profit during the same period.
Being ripped off by multinationals is all too commonplace. The car maker giant Volkswagen has cheated on its emissions levels, tricking millions of customers into believing they were driving environmentally friendly diesels. The Big Six energy companies have been overcharging us for years. Rail companies’ profits continue to rise but the increased costs in rail travel fail to result in improved services for workers.
But who is responsible for ensuring that multinationals play by the rules? None other than George Osborne. For all his recent rhetoric about clamping down on tax dodging, ensuring multinationals play by the rules and do not rip Britain off, this is the Chancellor who abandoned the 50p tax rate and introduced huge cuts in corporation tax. According to the treasury’s own estimates £20bn has been lost in tax receipts since he took office. Osborne’s cuts to corporation tax – from 28% in 2010 to 23% in 2015 on their own resulted in losses of more than £5bn a year to the country.
The Facebook revelations will now doubt reignite the debate about how much corporation tax companies pay but the time for debate has long since passed – now is the time for action. Instead of ruling for the 1% we need to have a country that looks after the 99%.