Low corporation tax bills may not be all they seem

Key points

• Turnover is not the same as profit.
• Multinationals operating in the UK pay other UK taxes such as VAT and National Insurance.
• The digital services tax has not had a great effect so far.
• Other measures such as a global minimum corporation tax rate are under discussion.

Google pays £50m corporation tax on £1.8bn of revenues proclaimed the headline in inews in April. It seems rare for a week to pass without a multinational giant featuring in a story of a similar nature. Amazon Netflix Facebook and Starbucks have all experienced excoriation in recent months based on the size of their UK corporation tax payments.

The implication of these stories is that these organisations are not paying their way employing nefarious means to reduce their bills while other ‘ordinary’ taxpayers pick up the tab. But is this fair or accurate? Are they...