Meanwhile in Britain, Austin Mitchell, a member of the Commons Public Accounts Committee, said he would recommend that the panel of MPs looked into why Ingeus was paying so little tax in the UK.
The same committee has already closely questioned executives from Vodafone, Starbucks and Google over how much tax their firms pay in Britain.
The most recently accounts filed by Ingeus’s UK operation suggest the company paid £2.5 million of corporation tax on gross profits of £38.4 million during 2011. The company legally lowered it’s tax bill by deducting “administrative expenses” of £32.7 million against its profits – a completely legal arrangement that is similar to those used by Google and Starbucks to reduce their corporation tax bills.
“Any companies winning work from our Government should not be avoiding paying tax here,” Mr Mitchell said. “That does not appear to be happening in this case and I will be urging the committee to look into this. Tax avoidance by companies is nothing short of a racket – it must be stopped.”
Or even MPs for that matter.
Administrative expenses are part of the cost of doing business. You know, things like filling out the VAT forms, making sure that PAYE is properly deducted. These are indeed administrative expenses and they are indeed tax deductible.
I mean seriously: what tax system would not allow the expenses of conforming to the tax system to be tax deductible?
In fact, as I dimply recall it, Austin Mitchell\’s paying someone to prepare his tax return is tax deductible in a manner that it isn\’t for the usual PAYE bod.