During a parliamentary debate, it emerged that the Revenue has awarded lucrative contracts to IT mastodons Capgemini and Accenture, both of which were recently exposed as tax avoiders.
As Labour MP John McDonnell noted, Capgemini made a £38 million profit last year but paid just £308,000 in corporation tax. This is less than 1%, as many PAYE Umbrella Company Employees could easily tell you. Mr McDonnell put it this way: “That company is employed by HMRC but avoids the tax that HMRC seeks to use it to collect. It is extraordinary.”
Things did not stop there. Mr McDonnell also highlighted the fact that Accenture, which has a £9.6 billion contract with HMRC, made £83 million in profits but paid just £2.8 million in tax – a tax bill of 3.5%. Effectively, it used its massive contract with HMRC to expand its private coffers and avoid paying tax. “You couldn’t make it up,” Mr McDonnell remarked.
The debate was instigated by the LibDem MP for Redcar, Ian Swales, who noted that Government is “by far the biggest purchaser and grant-awarding body in this country.” He added: “Is it right that Accenture, Capgemini and others win Government contracts when they are named as aggressive tax avoiders? Should HMRC itself have sold its buildings for leaseback to Mapeley, a Bermuda-based company? Is it not time that we recognised in financial assessments that most of the profits from private finance initiative and outsourcing contracts are now disappearing offshore?”