'I think you DO do evil, using smoke and mirrors to avoid tax'
Plus: 'What's next? Will they ask for my inside leg measurement?'
Quotw This was the week when someone kicked Blighty's tax ant-hill and sent MPs and multinationals scurrying in all directions. The Public Accounts Committee called Google and its auditor Ernst & Young back to give more evidence about their British tax dealings, after a Reuters report suggested there might be "inconsistencies" in their original testimony.
Google veep Matt Brittin stuck to his guns at the grilling, despite a new piece evidence from whistleblowers with almost every question and repeated offers of opportunities to set the record straight from MPs.
But in the end, committee chief Margaret Hodge had pretty much the same conclusions about the Chocolate Factory as she had the last time, when she called them "immoral". She said:
You're a company that says 'we don't do evil' and I think you do do evil in using smoke and mirrors to avoid paying tax.
The Labour MP also said that the sources and documents like sales strategies, salary slips and invoices showed that sales were closed in the UK, although Brittin had said British staff were just promotional people who "encouraged" people to buy ads. She said:
We have a pretty substantial document that informed UK sales staff of what they should be doing and it wasn't promotion, it was selling.
If sales are being concluded in the UK, you're misleading [UK's taxmen at] HMRC.
And on the topic of Amazon, whose company filings showed it got more in government grants last year than it paid in tax, she told The Register:
Paying £2.4m in tax on £4.3bn of sales is just a joke. Companies like Amazon should pay their fair share of tax based on their economic activity in this country and the profits they make here.
Its behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage.
Head of tax at Ernst & Young, John Dixon, had the usual excuse for bad behaviour - they're all at it, so why shouldn't we? He said:
The types of relationships you're seeing here are common. Lots of overseas companies set up this way and equally lots of UK companies set up this way when they're trading overseas.
And research from charity ActionAid this week agreed with him. According to its data, only two of the UK's FTSE 100 companies have no subsidiaries at all in tax-friendly places. All the rest enjoy a number of offshoots in tax-happy zones like the Bahamas and the Cayman Islands as well as tax-lite areas like Ireland and Delaware.
ActionAid's tax justice policy adviser Mike Lewis said:
With David Cameron promising action on tax havens at this year’s G8, the problem is on the UK’s doorstep. The UK is responsible for one in five of the world’s tax havens - that’s more than any other country.
Poor countries lose an estimated three times more money to tax havens than they receive in aid each year - money needed to build roads, fund schools and finance developing countries’ own fight against hunger and poverty.
Meanwhile, folks continue to want to invoke the name of Steve Jobs, as Acorn co-founder Hermann Hauser did when he claimed the world is entering a new "sixth wave" of computing. According to his theory, the fifth wave of smartphones and cloud computing is about to be overtaken by omnipresent computers and machine-learning. He said:
The whole point about machine learning is that computers observe and adapt themselves to what we want and a computer, with a whole host of sensors, really becomes part of your environment. It becomes like your pal – and let’s just assume it’s a nice pal.
And since Apple got to be in the old guard, there's unlikely to be a space for it in the new:
[Jobs] was very arrogant and impossible to talk to but he was brilliant and very unexpectedly made the phone the leading computerised device in the world today. [However], the incumbent always misses the next wave.
Bill Gates was also chatting about Jobs this week, complimenting the Apple leader as a guy with an eye for design and the ability to create legions of hyper-loyal fanbois:
We did tablets – lots of tablets – well before Apple did, but they put these pieces together in a way that succeeded.
His sense of design - that everything had to fit a certain aesthetic. The fact that he, with as little engineering background as he had, it shows that design can lead you in a good direction. And so phenomenal products came out of it.
He knew about brand. He had an intuitive sense of marketing - that was amazing.
One of those faithful fanbois' mothers was rather ticked off with the fruity firm this week when it tried to get her driving licence, passport and bank statements to verify her identity. The irate mum said the whole episode was enough to turn her into a fandroid:
When I found out this was a genuine Apple request, I immediately cancelled the order. They've basically turned me into a future Android user.
Apple told me they carry out spot checks for security reasons. But I don't think any private company should have the right to ask you to send over such personal documents by email.
It's Apple's arrogant way of saying: 'Tell us everything about yourself or we won't sell you our products'. What's next? Will they ask for my inside leg measurement or a chest X-ray?
And finally, an alleged CIA agent has been picked up in Russia with some rather outdated spy gear, including wigs, sunglasses, an old Nokia, a knife, a compass and some aluminium foil. What was the intrepid Bond/MacGyver hybrid up to? According to a letter he was carrying, he was attempting to turn Russians into informants.
The letter provided prospective spies with handy tips on how to betray their country, such as to set up a new Gmail account for secret communications and to buy a new computer, which the CIA would be happy to reimburse the agent for. As Russia Today said:
Ever-so-savvy, the document stressed the importance of not divulging any real contact information like phone numbers, email or home addresses when creating an email account for the purposes of spying on one’s own country.
A former FBI counterintelligence officer, Eric O'Neill, had an inkling that maybe folks aren't getting the whole story about the alleged spook:
I very much doubt that a highly trained CIA operative is going to be walking the streets of Moscow wearing a really bad blond wig. It's poor tradecraft, and it looks like a setup to me. ®