Lost VAT equivalent to cost of London 2012

The amount lost in Value Added Tax (VAT) on the sales of digital services is equivalent to the cost of staging the London Olympics, a report by a top telecoms and digital consultancy claimed Tuesday. The report by Greenwich Consulting estimates that Britain is losing over £1.6 billion a year in VAT on digital services bought from suppliers based overseas, according to figures seen by the Guardian. The study suggests Britain will lose £10 billion between 2008 and 2014, £1 billion more than the official cost of the 2012 Olympics. Britain announced a campaign against "tax dodgers" and "cowboy advisers" on Monday to claw back £2 billion a year, as lawmakers alleged that multinationals such as Google and Amazon are avoiding huge tax bills. Parliament's public accounts committee on Monday released a report after it quizzed senior figures from coffee chain Starbucks, US online retailer Amazon and Internet search giant Google. Margaret Hodge, who chairs the committee, said: "Global companies with huge operations in the UK generating significant amounts of income are getting away with paying little or no corporation tax here. The report said multinational firms were using complex structures and exploiting tax laws to move offshore profits that were "clearly" generated within Britain.