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PAC may call in Facebook

/ 15 October 2015

‘Meg Hillier, chairwoman of the PAC, has said she will discuss the possibility of calling Facebook before the Committee after it was revealed the firm paid just £4,327 in UK corporation tax last year. Meanwhile, The Times’ Hugo Rifkind says new media companies like Google, Amazon and Facebook pass the guilt of their ethical transgressions on to their consumers and show contempt for those who pay their dues.

Elsewhere, the Mail argues that tax rules are outdated, noting that corporation tax accounts for just £43bn of the £672bn total UK take while HMRC estimates Britain’s tax gap stood at £34bn in 2013, £3.5bn of which was estimated to be lost corporation tax revenues. The Guardian’s Aditya Chakrabortty points to AstraZeneca’s corporation tax bill of zero for both 2013 and 2014, despite racking up global profits in those years of £2.9bn, and says liaison committees set up by George Osborne have meant some of the country’s biggest businesses have helped design their own tax regimes. Representatives from Astra and Vodafone were among those who advised the Government on how big businesses are taxed.

Sources: The Times, Daily Mail, The Guardian’
Plenty of Hugo Rifkind’s writing is light in tone. Only a few weeks ago, he wrote a TV review amusingly bemoaning Doctor Who’s non-sequiturs (or should that be non-prequiturs?). But he is equally adept at adopting a more serious, resolute approach (more so than some other journalists we’ve commented about) and his opinion piece for The Times is serious to the point of scathing. Examples: ‘These companies are not your friends … what they truly represent, in fact, are brazen, open wounds in the global social contract’ and ‘Ethical transgressions that would ravage the reputations of other sectors … are simply not their problem … the guilt is shunted to the consumer, with our complicity washing corporate hands clean’.

This consumer might be compared with one from much earlier in the digital age: Pac-Man (or, if you prefer, Ms Pac-Man), ingesting as long as there is stuff to ingest. And with a third of all Britons making daily use of a Facebook account (according to Rifkind), there is no shortage of Pac-Men. It might be a pleasing irony, then, if the PAC were to hold Facebook to account. This might bring some satisfaction to those who share Richard Murphy’s view, expressed in The Guardian, that ‘we have a tax system that lets it get away with paying very little tax and accounting standards that do not require that it properly explain why this is the case’. We’re further reminded of Hugo Rifkind’s aforementioned TV review, in which he complained about Peter Capaldi appearing in a room full of Daleks with a cuppa and the words: “The real question is: where did I get the cup of tea? Answer: I’m the Doctor. Just accept it.” If Facebook is questioned by the Public Accounts Committee, a perceived air of ‘Answer: we’re Facebook. Just accept it’ might just fail to work this time.

But what was Rifkind’s true motivation for writing the article? Elsewhere on social media, he gives the answer: ‘Wholly in order to spend the entire day arguing with accountants on Twitter.’ Evidently an irresistible pastime, he got what he bargained for. You can read much of the Twitter correspondence with Hugo here, including ACCA’s comment that for a proper analysis, ‘we’d need specifics which Facebook aren’t publishing to be sure.’ Hugo Rifkind’s piece, including his reference to ‘complex, layman-bothering tax arrangements’, will nonetheless have struck a chord with numerous readers who aren’t overly concerned with such specifics.

Our dilemma is: if we publish a link to this blog post on our Facebook page, are we biting the hand that feeds us? It’s a hand that, many people may now feel, includes both ‘a corporate American middle finger’ (Rifkind’s words) and a trademark thumb, pointing hypnotically upwards. The latter, we can be sure, is the digit to which Facebook wants us to pay the most attention.