4 November 2018
Schools, hospitals, the emergency services, roads, welfare – there is an endless list of critical services that we rely on our government to provide. And they can’t do it without our help.
We all rely on each other to do our bit and contribute in our own small way. Collectively, we are the massive force that runs this great nation. Every person and every business, although, sadly that’s not quite correct.
There are companies who are happy to locate in the UK and enjoy the rich rewards and huge consumer base to bolster sales and profits, yet frustratingly, they see zero sense of responsibility to towards contributing to the British people, infrastructure and system to ensure the UK continues ticking like clockwork.
Far too many companies are not paying their fair share of tax.
If you make money on something in this country, regardless of where you are based, you should be taxed on your profits the same as other businesses providing similar services. For many years, the playing field has been far from level.
According to the Guardian, Google paid just £49m tax on revenues of £7.6bn. That’s less than 1%. Facebook paid £16m on £1.3bn which is 1.23% and Amazon paid £4.5m on £8.7bn in 2017, which is the lowest of them all at a disgusting 0.05%. In total five of the biggest tech firms – including Apple, Facebook and Google, deprive the UK of billions of pounds and there are a great deal more of them that are under the publicity radar!
For some time I, along with many other entrepreneurs and British Tax payers, have been lobbying government to step in and level the playing field. Year after year, our requests have fallen on deaf ears. I am not one to give up but, even with my resilience, I was beginning to believe the quest was futile.
However, finally, in this recent budget, chancellor Philip Hammond announced a new tax designed to target global tech firms with revenue of more than £500m per year. Whilst this may only apply to a small area of operations, it’s certainly better progress than the discussions taking place in Europe on an international agreement to tackle tech firms’ tax.
We are an incredibly hard-working nation but it is undermined when foreign businesses come into this country and don’t play by the same rules. Imagine how fast British tech firms might have grown if they paid the tiny percentages of tax that we’ve seen from some of these giant firms. Yes, it’s just about legal and they’re “technically” playing by the rules, but it’s certainly not right, it’s definitely not ethical in my opinion.
I hear analysts and experts talk how clever these US tech giants are, “look at their profit!” “look at their growth,” yet they never take into consideration that they don’t give up a large slice of their profits each year like the rest of us. I can’t imagine the size we’d be if we could have put every penny from our tax back into R&D and marketing.
If every business played by the US tech rules, our country would collapse. We rely on each other to stand shoulder to shoulder and share the responsibility. One of the reasons the UK is lagging behind with the NHS and other key areas is a lack of investment and funds that would have come from our economy if every pound was taxed properly and fairly.
Instead it has long been the SME and entrepreneur propping up the country paying the lion’s share in proportion, while the huge multinationals are granted an easier route. Where the profits of the giant corporations are siphoned off to offshore accounts.
You do have to wonder what are the chances that they’ll contribute properly under the new regime or will they cleverly hide revenue with management charges and even more complex structures. Creative and clever accounting has paid off for many big businesses so far, so what’s to say they won’t find new loopholes? I will certainly be watching the progress of this to see how it all pans out. Hammond has to take all of this into consideration rather than making a bold statement in the House of Commons and hoping for the best.
When you see the news that the Metropolitan Police have hired an agency to push branded merchandise to raise money, you know that something has gone radically wrong. When our police have to raise money to fund frontline services this way, it’s concerning to say the least. I am involved in a number of initiatives to raise money for children’s hospitals and other charities. Why is it that we don’t have enough?
Would all the local government services, hospitals and critical infrastructure be in the same position if we had instead been receiving the reported billions of pounds shortfall from those big tech firms?
Equally, you have to ask the same questions of schools. When trying to help kids in classrooms learn technical skills, we found out some schools don’t even have computers! Would businesses like UKFast need to step in to install computer suites for schools to ensure every kid gets a fair chance to access tech? We run ‘teach the teacher’ classes to help inspire the next generation of IT teachers in our area, would we need to do this as well?
These are services we do for the community, because they need it, because they are underfunded. We don’t charge for them and we never will. They are essential and whilst they should be provided by the government, rather than complain and wait whilst year after year school children are neglected, I believe it’s our obligation to help. And yes, to all the greedy Tech giants, this is on top of the tax we pay!
I too could focus on creating more profits, but if we all did this, where does it get us? The sense of belonging I get from being part of the community not just the tech community but Greater Manchester and beyond as a whole is worth every penny and the bigger we get, the bigger the difference we will continue to make.
How teachers are not the best paid people in society is beyond me, but that is a blog and discussion for another occasion. At least maybe when the taxes that have been deliberately siphoned abroad start to hit the treasury, surely it’s time for some proper pay rises for the public sector workers.
And it’s not just teachers that deserve it, the police and so many other civil servants need their pay bringing back in line. It shouldn’t be possible that house prices have accelerated so much that general salaries are falling significantly behind. So much so, that young people are unable to get on to the property ladder.
We have given a minimum 5% pay increase to every person in UKFast since inception in 1999. That’s 19 consecutive years. If a tiny business like UKFast (in the scheme of things) can achieve that, how can a country not keep up in a similar way?
The answer is, they may be able to now! How does a government deliver a budget where they give record numbers to the NHS and deliver a tax cut? They have finally come to their senses and started to tackle these businesses who have been taking the mick!
In the meantime, with the uncertainty of Brexit and the economy showing signs of slowing, it is unchartered waters ahead for us all. Whatever the outcome, it is only temporary and as long as we stay focussed to building a better Britain together, the sun will be out again before you know it.
Time to focus and good luck!Back to Blog