MPs put American multinationals Starbucks, Amazon and Google under scrutiny yesterday over suspected off-shore tax-avoidance schemes denounced as "immoral" during a three-hour investigation.

Previous attempts to question company representatives have seen low-ranking delegations sent in place of high-profile executives, or even representatives simply not turning up. However on this occasion, MPs took their chance to mercilessly lambast the American corporations before the eyes of the watching world.


Andrew Cecil, Director Public Policy at Amazon was made uncomfortable under the gaze of Margaret Hodge MP. Amazon allegedly avoids UK tax by by re-routing international commerce through Ireland and Luxembourg, which generates a tax-rate of 3.2% on non-US profits. The hearing drew more unwanted attention to Amazon's disagreement with the French authorities, who have already demanded £159m of unpaid tax be accounted for.

Last month it was revealed that coffee chain Starbucks, which employs over 7,000 staff in more than 800 UK stores, has paid no corporation or income tax in Britain for three years. Starbucks has paid £8.6m in total UK tax over 13 years - during which time it recorded sales of £3.1bn. Global Chief Financial Officer Troy Alstead drew the short-straw for the Seattle-based company as he was grilled by MPs.

Matt Brittin, the head of Google in northern Europe, then admitted the internet operate in Ireland because of a low corporation tax rate there of 12.5%. Google's 2011 financial results show £2.5bn of UK sales but a paltry UK tax charge of a £3.4m.

Among executives denying knowledge of published financial results, other U.S companies are still wanted for more probing questions.

Social network Facebook ($3.7bn global turnover) paid £238,000 in tax last year; Apple paid under 2% corporation tax on foreign pre-tax profits of $36.8bn. US auction site eBay are also under scrutiny.


"People want to know why companies which benefit from an infrastructure paid for by them and are paying people low wages who receive taxpayer-funded tax credits from the exchequer are not paying their fair share," said Margaret Hodge.

"Your entire activity is here yet you pay no tax here and that really riles us."

In response, Google's Matt Brittin shrugged: "Like any company you play by the rules [and] manage costs efficiently to offer fair value to shareholders."

"We're not accusing you of being illegal, we are accusing you of being immoral," replied Hodge.