Multinational Tax Avoidance – A Case of Corporate Social Responsibility

I am an Amazon shopper, but also recently signed the Change.com petition by Frances and Keith Smith of Kenilworth and Warwick Books.  This calls for Amazon to pay UK tax on their £3.3 billion UK earnings.

Corporate social responsibility.

Should Google and Amazon pay more UK tax?

Amazon does provide an incredible service, but seems to have annoyed both customers and third party retailers by both avoiding UK tax and increasing charges to the small businesses that use its storefront.   Goodwill should not be taken for granted.

Online retailing is a disruptive technology.  All disruptive technologies have their casualties.  On the high street Borders has already gone, HMV is hanging on, Waterstones has an uneasy truce and now has an Amazon-run e-book service.

It’s understandable why Frances and Keith are concerned.  In the past this would have been a private grumble, but in the Internet age customers can aggregate their power.  An attitude that says ‘we are bigger than you and only small people pay tax’ will alienate customers.  Private grievances can become mass movements to boycott and look for alternatives.

For me, and no doubt millions of others, it is a matter of fairness, transparency and showing responsibility.  I would feel better about Amazon if it was making a proper contribution to the wider economy and recognised that it has responsibility to the community that supports it.

In PR terms this all falls under corporate social responsibility (CSR).  I have no doubt Amazon have legions of well-paid CSR advisors, but in a spirit of generosity from a much smaller business, here are our free guidelines http://www.free-pr-advice.co.uk/corporateresponsibility.htm.

Frances and Keith’s petition is being presented to Downing Street today:  Wednesday April 24.

In a separate development Eric Schmidt, CEO at Google, defended his company’s payment of only £6 million in corporation tax on £2.5 billion UK revenue in 2011.   His justification is that this was how international business works and Google makes a wider contribution to the UK economy and society just by doing what it does.  An interesting argument, but perhaps not one with which most UK Google users would agree.  It looks like if you are big enough, tax is voluntary and negotiable. The full article is here http://www.guardian.co.uk/technology/2013/apr/22/google-eric-schmidt-tax-avoidance.

Kevin Ainsworth, Partner, Ainsworth Maguire Public Relations

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