With a new yes-we-can Prime Minister in place, the focus post-Brexit may well be on how the relations with Europe are repaired.
Indeed, attempting to cement foreign relations and move on from Europe’s hostile initial reaction to Britain’s Brexit vote on the morning of June 24, US treasury secretary Jack Lew called on Brussels and London to come up with a “highly integrated relationship” if Britain leaves the EU.
“An outcome from the UK and EU that produces a highly integrated relationship between the two is in the best interests of Europe, the United States and the global economy,” said Lew in a press conference on Wednesday evening.
But some companies will be looking beyond the obvious with the appointment on Wednesday of Britain’s longest-serving Home Secretary in 60 years as the new premier, Theresa May.
In her maiden speech as PM, May vowed to tackle injustice in society and stressed her determination to preserve unity of the United Kingdom, after Scotland made overtures towards a second referendum Independence in a bid to re-join the EU.
“The government I lead will be driven not by the interests of the privileged few, but by yours. We will do everything we can to give you more control over your lives,” she said.
As May emphasised her crusade to listen to and back the little citizen over big corporations and her intentions to tackle what she described as the “burning injustice” in British society, a number of companies in the United States may well have been sitting on the edge of their seats – with a prayer book.
For although May’s husband Philip has had a rather awkward career - from Theresa May's standpoint this week - as a client liaison officer for a fund manager – Capital Group – which has assisted in helping major companies avoid paying hefty tax in Britain, it now looks like the new premier will need to get tough in that department if she is to maintain a long honeymoon in office.
Among the celebrated companies that have managed to avoid tax legitimately albeit controversially is Facebook (NASDAQ:FB). Facebook paid just £4,327 in corporation tax in 2014, after it made a pre-tax loss of £28.5mln, according to filings at Companies House. That is less than the average UK employee. Facebook shares closed down 1% at $116.78 on Wednesday.
Amazon’s (NASDAQ:AMZN) UK business paid just £11.9mln in corporation tax last year, even though the online retail giant took £5.3bn in sales from British shoppers. Amazon shares closed down 0.75% at $742.63.
Google, now Alphabet (NASDAQ:GOOGL) has become notorious in tax circles, so much so that attempts to move profits to lower-tax countries earned a tax applied to such multi-nationals known as the “Google tax”.
In 2012, Google revealed it paid only £11.6mln to the UK Treasury, despite taking receipts worth £3.4bn in the UK. Alphabet shares closed down 0.4% at $729.47.
It might seem a whole lot more conservative, but taxi cab service Uber paid £22,134 in UK corporation tax last year despite making a profit of £866,000.
Coffee bar group Starbucks Corp (NASDAQ:SBUX) faced a European Commission ruling last October that Starbucks' tax deal in the EU was illegal, ordering it to pay between €20-30mln to the Netherlands. Starbucks shares closed down 1.7% at $56.48.
The irony of Brexit is whether in fact such companies will benefit from disagreement between tax jurisdictions over how to pursue unpaid tax. Or whether Britain’s new regime would be tougher than that of the EU. Possibly a local vote winner until someone spots that it could curtail the attractiveness of Britain as a sales target for major US companies.
Meanwhile, all of this might not be totally appreciated by Philip May’s employer, whose portfolio includes $20bn of shares in Amazon and Starbucks, both of which were cited by May on the eve of her appointment by HM The Queen to become Prime Minister as a pledge to crack down on tax avoidance yesterday.
Latest filings to US authorities show that Los Angeles-based Capital Group owns huge stakes in a variety of companies, including investment bank JP Morgan Chase, defence giant Lockheed Martin, tobacco company Philip Morris International, the pharmaceutical sector’s Merck & Co, and also budget airline Ryanair. Many of these companies had also backed a Remain vote to stay in the EU.
The twists and turns of business and politics.