The UK’s tax authority believes Irish-owned companies have underpaid their corporate taxes by £535 million (€625.25 million) in the last year, according to a report by accountancy firm UHY Hacker Young.
HMRC (His Majesty’s Revenue and Customs) suspects that the total bill for tax obligations underpaid by multinationals in the 2022-23 financial year topped £11.5 billion, up 6.9 per cent from the previous year.
US companies, accounting for an estimated 48.6 per cent of the total or £5.6 billion, were the worst offenders by far, the report indicates.
Campaigners and politicians have repeatedly accused large US companies, particularly tech multinationals, of using aggressive tax-planning strategies to divert earnings from the UK to lower tax jurisdictions, including Ireland and other countries.
Wills without residuary clauses can see people inherit even if you didn’t want them to
An Irish businessman in Singapore: ‘You’ll get a year in jail if you are in a drunken brawl, so people don’t step out of line’
Balmoral shows ‘small’ investors the door
A helping hand with the cost of caring: what supports are available?
In the past few years, a number of US tech giant have agreed to pay more tax in the UK, among them Microsoft and Netflix. Microsoft agreed to pay HMRC £136 million in back taxes under a “bilateral agreement”, according to accounts filed in the UK in October. Netflix announced in November 2020 that it would declare revenue from UK subscribers to HMRC, rather than booking the earnings through its Dutch European HQ.
Companies from the Republic, meanwhile, may have underpaid £535 million in UK taxes last year, or around 4.7 per cent of the estimated total, according to the report, down from £636.8 million in the 2021-22 financial year.
Swiss companies may have underpaid £1.2 billion in taxes while French and German companies combined paid £1.2 billion less than expected.
“It is often pointed out that US tech companies sometimes pay a much smaller amount of tax than some would expect,” said Andrew Snowdown, partner and head of tax at UHY Hacker Young in a statement. “Efforts are being made globally to ensure that companies pay an appropriate amount of tax in the countries where their sales are made.” – Additional reporting: The Guardian
Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
