LEADING companies will today appear in parliament to answer questions on their alleged tax avoidance – but the Labour MP who summoned them faces questions about financial arrangements at her own family company.
Margaret Hodge, head of the public accounts committee, is set to quiz representatives of Google, Starbucks and Amazon following claims the multinational companies seek to minimise their UK tax bills.
But questions have been raised over her holding in Stemcor – the world’s largest independent steel trader – which was founded by her father and is now run by her brother. One analysis of its accounts showed it paid just £163,000 of tax in the UK last year on profits of £65m.
Hodge has told parliamentary authorities that she has a “registrable shareholding” in the firm. She says she has repeatedly sought assurances that the firm does not actively seek to avoid tax.
In a statement Stemcor said poor trading conditions were to blame for the low tax bill: “UK operations and margins were squeezed due to the adverse economic climate – this resulted in a very low UK corporation tax charge for that particular year. In the past three years, a total of £14m of corporation tax has been paid by Stemcor in the UK. Stemcor’s effective tax rate internationally in the last three years has been over 30 per cent.”
Meanwhile former City minister Lord Myners told The Sunday Telegraph that the government should consider a sales tax to increase revenue from large multinational companies. He said that global firms view UK corporation tax as “close to being a voluntary payment”.