The ‘factsheet’ claims to be ‘setting out some facts to help dispel myths which have arisen about how HMRC ensures compliance among multinationals’ and argues that ‘aggressive tax planning, by which some multinationals exploit the complexity of the international tax system to reduce their tax liabilities… is a global issue that requires a global solution.’
Here’s just a few things they had to say regarding the “sweetheart deal” accusation and the settlement with Google:
‘Sweetheart deal’
HMRC does not do “sweetheart deals”.

This process is subject to routine scrutiny by the NAO.
The Google enquiry

Some commentators have applied Google’s group profit margin to its sales to UK customers and estimated that Google’s UK Corporation Tax is equivalent to an effective tax rate of around 3% on the group’s profit’s arising in the UK.
This calculation does not reflect how tax law works.
In accordance with our published guidelines on resolving disputes, HMRC has taxed all of Google’s profits chargeable to tax in the UK for the period in question, at the full statutory rate of tax.
There has been media speculation about what other European tax authorities are doing regarding Google. We can’t comment on enquiries carried out in other countries, or on media speculation about them. So far, there has been no public confirmation that other countries have concluded enquiries with Google, either by agreement or by litigation. HMRC is satisfied that our enquiry has secured all the tax that is due in the UK.
On the wider issue of its dealings with multinational corporations, HMRC claims to have:
- secured more than £100 billion of compliance revenues from all sources, of which £38 billion was from large business compliance work
- reduced the corporation tax ‘gap’ – the tax which is due but is not paid – from 9.3% (2010 to 2011) to 6.7% (2013 to 2014) of tax liabilities
- won more than 80% of tax avoidance cases in tax tribunals; and
- secured almost £3.2 billion in additional tax from challenging transfer pricing arrangements of multinational companies
Like many small businesses we hope that major multinational corporations will soon be held to account much the same as UK businesses, and at the recent FSB Policy Conference Chancellor George Osborne reassured that an international agreement to change out of date tax laws is imminent.
We'd love to know your thoughts on the alleged "sweetheart deal", and reforms that you would like to see accomplished to help small businesses - please comment and let us know your thoughts on the HMRC factsheet.
Looking forward to hearing from you soon,
Tessa Foy
Assistant Accountant
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