A TREASURY select committee MP yesterday demanded a new tax on firms including Google and Facebook that channel funds out of the UK to avoid corporation tax.
Labour MP John Mann told City A.M. that members of the committee were “increasingly concerned” about tax avoidance and suggested a “transmission tax” on the revenue that firms make in the UK and declare in countries with lower rates.
“There needs to be some sort of transmission tax. This is a problem for lots of internet companies who are freeriding on us,” Mann said yesterday. “They should pay a modest tax. It’s about time we get wise to non-physical goods,” he added, singling out Google, Facebook and Microsoft. Mann also called for Google executives to face the Treasury select committee. “We should be in dialogue with them about what taxes they should pay,” he said.
Google made $4bn (£2.6bn) in the UK last year, but only declared £396m to the Treasury, meaning it paid just £6m in corporation tax on a £21m loss. Google, Microsoft and Facebook declare the majority of their UK revenue in Ireland, where they benefit from a lower corporation tax. A Google spokesman said: “We comply with all the tax rules in the UK.”