What does George Osborne mean when he says he expects technology companies in the UK like Facebook, Amazon and Google to pay tax? UK consumers spend billions on technology companies. It seems that there will need to be a review of intellectual property payments and licensing fees made by UK subsidiaries by which technology companies depress their tax liability. This review will undoubtedly have a major impact on UK PLC.
Intellectual property payments to holding companies, the movement of sales activity to lower tax jurisdictions and the cost of licensing fees to holding companies all confuse the picture and allow firms with very mobile business models (such as in the technology sector) to be highly tax efficient. Eric Schmidt, the chairman of Google, said it was his financial duty to his shareholders to structure the company in such a way.