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Multinationals Face Higher UK Tax After Storm of Criticism

Global companies like Starbucks, Amazon and Google are facing a tax clampdown after an outcry from government and the public over how little U.K.tax they pay.

"Global companies with huge operations in the U.K.generating significant amounts of income are getting away with paying little or no corporation tax here. This is outrageous and an insult to British businesses and individuals who pay their fair share," Margaret Hodge MP, head of the influential committee of public accounts, said Monday.

The cross-party committee called for U.K. tax authorities to be more "aggressive and assertive" in getting tax revenues from multinationals and said: "Its response so far to these big businesses and their aggressive tax planning has lacked determination and looks way too lenient."

Representatives from Starbucks, Amazon and other well-known international companies appeared in front of the committee earlier this year – but MPs described their responses to questions about how they lowered their tax bills as "unconvincing,and in some cases evasive."

Chancellor of the Exchequer George Osborne is expected to announce plans for a crackdown early this week, including money to hire more staff to pursue tax avoiders.

Revelations about global companies operating in the UK using loopholes in U.K. law to reduce their tax bill have caused consternation as the country comes out of its second recession, with some economists warning of a third to come.

Starbucks attracted opprobrium after an investigation showed it has paid tax of less than 1 percent on U.K. revenues of more than 3 billion pounds since it opened in the country more than a decade ago – partly through paying a "royalty fee" to a Dutch subsidiary. It said on Sunday that it was in discussions with the UK authorities over its tax bill.

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