Workers have to pay tax. But companies? Google’s overseas tax rate has averaged just 2.4 per cent in the last three years. All the revenue it generates in Britain goes through a subsidiary firm in Ireland, then on to the tax haven Bermuda. Likewise, Facebook avoids tax by going through Ireland to the Cayman Islands.
In the popular tax avoidance scheme known as the “Double Irish”, companies set up two companies in Ireland, one of which is just a shell with operations in Caribbean tax havens (usually British ex-colonies). Through another scheme, the “Dutch Sandwich”, big companies have set up 13,000 “middle” companies in the Netherlands, through which they moved £10.9 trillion in 2008.
One firm’s tax avoidance is another man’s tax increase.