Tax-avoiding firms ‘should not receive government support’

The Scottish Government signalled its support for a proposal to bar companies registered in tax havens from receiving bailouts.

Tax-avoiding firms ‘should not receive government support’ Getty Images

The Scottish Government has signalled its support for a proposal from the Greens to bar companies registered in tax havens from receiving taxpayer-funded Covid-19 bailouts.

An amendment to emergency coronavirus legislation will be proposed by Scottish Green Party co-leader Patrick Harvie this week.

Scottish Labour will back the proposal and the Scottish Government said it “strongly” sympathises with the aims of the amendments and is giving it “detailed consideration”.

The Welsh Government has already taken similar action, saying none of its £500m Economic Resilience Fund – set up to offer financial support to help businesses, charities and social enterprises – will be granted to businesses registered in tax havens.

Responding to the proposals, a Scottish Government spokeswoman said: “The Scottish Government is committed to taking the toughest possible approach to tackling tax avoidance where we have the powers to do so.

“We are clear that Government support should go to those who need it the most and ministers are listening to businesses and employees as we continue to explore how best to help during this unprecedented economic crisis and our total package of support now totals £2.3bn.

“Our support, which is under constant review, is for businesses operating in Scotland and providing jobs.

“We strongly sympathise with the aims of the amendments submitted and are giving detailed consideration to the issue.”

Scottish Labour leader Richard Leonard said: “We cannot go back to ‘business as usual’ after this pandemic and by taking this principled stance the Scottish Government can state clearly that the days of the state bankrolling tax-dodging companies at the expense of the domestic economy are over.

“By only providing support to companies that pay appropriate levels of tax, the Scottish Government can ensure that the money to support Scotland’s economy stays in Scotland and that businesses that operate ethically are incentivised.

“Substantial amounts of money are lost from national economies every year due to companies registering in overseas tax havens.”

He added: “Campaigns such as the Co-op Fair Tax Mark, which supports businesses that pay their fair share to tax, must be encouraged and strengthened.

“After this crisis is over we will face a tremendous task to rebuild and reform Scotland’s economy.

“By following in the Welsh Government’s footsteps, we can ensure we face this enormous task with a common sense and ethical approach.”