brotherhood_of_LAN - 6:43 am on Dec 12, 2012 (gmt 0)

by routing its business though Luxemburg where it does very little business and has a very low rate of tax it avoids paying corporation tax in the UK, Germany, France and all other EU countries.

That is the problem, essentially. Being in the common EU market this is perfectly acceptable. Ireland's boom was helped a lot by having low corporation tax, so the likes of Google set themselves up there for their EU customers.

It's a lawmakers problem, IMO. Of course, the problem remains that if they tax more, or tax more effectively... it raises the possibility of companies going elsewhere or thinking twice about investing in the country.

If corporation tax in the UK isn't effective because it's being 'priced out' by other EU countries... then change it.