The Commons Public Accounts Committee is launch an investigation into why nearly two thirds of the UK's biggest businesses paid little or no corporation tax in 2006.
An analysis by the National Audit Office of the 700 UK companies (whose affairs are handled by HM Revenue and Customs' large business service) revealed that 50 businesses paid 67 per cent of the total tax collected by the service, while 210 paid less than £10m and a further 220 alarmingly paid no tax at all.
Dr John Pugh, a Liberal Democrat MP and a member of the Accounts Committee, said the failure of the tax system needed to be carefully examined and dismissed claims that pension top-up payments were to blame for the lack of tax .
"This is more than special pleading; it is a distinctly dodgy argument," he said.
"The committee already has a programme of work, but this is one report we could legitimately select. We necessarily look at the gamekeepers rather than the poachers but we need to examine the failure of the tax system," Pugh added.
Senior PAC member and Labour MP Austin Mitchell said companies were justified using profits to bolster under-funded pension schemes, but was concerned that tax avoidance through offshore havens is increasing.
He said: "I think the committee ought to look into this. More and more companies are using financial engineering to avoid paying the social rent they owe this country."
Tax Avoidance By UK Companies To Be Investigated
Thu, 06 Sep 2007
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UK Companies Avoiding Tax Payments
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