UK giants Amazon, Microsoft and Apple could be hit by tax

Image copyright Getty Images Image caption Amazon, Walmart and Google could be hit by the higher tax

Proposed taxes on businesses could hit UK giants Amazon, Microsoft and Apple, according to new analysis.

It also reveals that Britain’s largest supermarket groups could face an even greater overall tax bill.

A report from the Resolution Foundation said 20% would hit Amazon and other tech giants.

The Tax Payers’ Alliance said the “greenshoots” showed how much of a role the UK could play in shaping the rules and standards for global business.

The voluntary tax was made up of four parts.

The basic rate of tax on companies is 27.5%, with the government adding a raft of other levies.

A new rate of 20% on all overseas income is to be set in autumn.

Companies with European earnings of more than £10m are to be pushed up to this level, to reflect the cost of being taxed on earnings that would not be taxed in the UK.

Companies with earnings of more than £50m are to be pushed up to the level of £100m.

The report said: “The UK public faces a potentially significant tax hike on big businesses.

“It would raise about £2.5bn a year, equivalent to a tax rate of about 20%.

“But it could drive many of the UK’s biggest multinational firms into a tax liability that is twice as large.”

The report said those with a greater impact on jobs would be Amazon and Google which employ a combined total of 1.7 million people in the UK.

Sainsbury’s and Wal-Mart’s Asda would also be targeted, with each having a combined workforce of 420,000 and NetApp with 212,000.

It said the tax would hit 96% of Britain’s £25bn-a-year multinational business.

The report is the first to quantify the scale of the financial impact on UK firms.

But George Cross of tax consultancy RSM said its impact was likely to be “more complicated” than just the headline headline level.

He told the BBC: “There could be a £2.5bn tax on Amazon alone.”

The TPA’s Patrick O’Flynn told the BBC: “We’ve got companies in the UK like BSkyB [BSkyB] and Sky that are big beneficiaries of the digital economy which is a pre-revolutionary tax.

“If you were to tax Google and Facebook as a result of the digital economy, there would be a big impact on businesses here.”

‘The much-needed gale blowing right at the climate of globalization’

David Cameron was heavily criticised in 2015 for announcing the tax, but Theresa May has left Mrs Cameron’s policy untouched.

Mr Cameron said that “if we want the global champions of tomorrow to be based here in Britain it will take radical changes, as well as tax changes, to make that a reality”.

Analysis by the BBC’s Europe editor Mark Duffin

Don’t expect this to happen any time soon. Only at the urging of a big US lobbying campaign has the Treasury produced this second white paper that provides a much-needed gale blowing right at the climate of globalization.

But after its failure to remove the corporate tax in most European countries in the original US tax law (which President Donald Trump has re-invigorated) it was imperative to draw up a new, more targeted plan.

Read Mark Duffin’s full blog here

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