The UK lost out on £2bn in tax in 2021 as Apple and other big tech companies shifted their profits abroad according to WatchTax. These are the estimates from a group campaigning for greater tax transparency. TaxWtach is an investigative think tank in the field of taxation.
Campaign group TaxWatch reports that major seven tech companies including Apple, Microsoft, and Google owner Alphabet are estimated to have paid £750m instead of a possible £2bn in UK corporation tax and digital tax sales.
The seven largest tech companies have headquarters in the United States of America. Among the world’s two largest public companies by market value are Apple and Microsoft. Alphabet comes in fourth place. TaxWatch analysis also included Amazon and Facebook owner Meta as the fifth and sixth-largest companies. The seventh one includes Cisco and Photoshop maker Adobe.
TaxWatch estimated how much these global companies would have paid the UK tax if their British subsidiaries had declared profits at the same rate at which they declared them worldwide.
UK Tax Analysis TaxWatch Estimates
Taxwatch estimated that these seven companies made £60.5 billion in United Kingdom revenue in tax in 2021 year. It estimates that companies made a profit of £14.8 billion in the UK by applying global profit margins.
According to TaxWatch estimate, companies paid £750 million in UK corporation tax at £2 billion less than expected. WatchTax admits that its figure can be a rough estimate based on the lack of data provided by public company reports. But it said the lack of transparency is part of the problem that should be solved by country-by-country tax reporting.
TaxWatch claims its figures were supposed to be a more realistic estimate of UK profits. Until Amazon disputed this saying underlying assumptions are wrong.
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