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I'm ignorant of the tax implications relating to the link below other than, according to the article, these companies pay negligible corporation tax in relation to the profits they make. Perhaps someone can enlighten me as to why this should be the case?
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They do pay tax, just not in the UK - the revenues get shuffled around so the actual tax liability falls in a country where it's cheaper, or large payments ((which are tax-deductible expenditures in the UK) are made to divisions in other countries.
All (or most, at least) perfectly legal, unfortunately.
There was another case this week (the name of the conglomerate escapes me at present) who don't one pay one single penny to the HMRC coffers.
The system stinks. Always did - always will. Why? Corruption.
Nope, more likely legal or grey loop holes.
Why do you think Boots moved the head quaters from Nottingham to Zurich
Quote: Why do you think Boots moved the head quaters from Nottingham to Zurich
And I thought that it was 'cos the chocolate is nicer !!!!
A report earlier (I think it was Amazon or Vodafone, can't remember) which explained that they build something like an internal market where they 'pay' costs to branches in other countries for services which leaves UK with little profitoreven a loss.
The other thing about eBay is whether they are an auction house or a point of sale? The arguments have been going on for years and I think it is France who have unilterally decalred them a point of sale and are taxing on business in the same was as for any other company. Sometimes I admire the French chutzpah.
It is not corruption but playing the rules. Whatever laws you have, accountants will find a way to reduce payments. If they paid tax on turnover it would drive loads of businesses bankrupt and all international manufacturing companies would pull out of UK, and for retail outlets prices would rocket. So do you take a small percentage of a lot or 100% of nothing?
I'm not defending the system, I am as frustrated as many but what do you do?
It might be unpalatable, but what would you propose should be done about it? If you insist that a "British" company pays tax to the UK treasury, what's to stop them moving overseas? If you say that there's a penalty for moving capital out of the country, would that not have the effect of discouraging inward investment in the first place? I don't know the answers - it's for certain that I'm no tax expert or economist. What would you suggest?
Looked at from the other side, as it were, would you willingly pay more tax than you must? The people who run these big companies have a responsibility to maximise return on investment for their shareholders, and part of that involves minimising tax liability.
I'm neither condoning nor condemning. Absent an solution that works for all concerned, I suppose it's just a fact of business life.
The law says that everyone has the right so to adjust his affairs as to pay the least amount of tax possible. You can't blame anyone for taking advantage of this & if the government don't like it, they should close the loopholes that their badly drafted laws have opened. And if you don't like it, just ask yourself what you'ld do given the chance to avoid paying tax legally.
In view of this it does beg the question what would happen if we taxed the big companies and rich fat cats even more, as many suggest we should do ....... They are already able to circumvent our tax system, legally, if not morally, though some choose not to, some choose to partially and some almost completely. Taxing even further may just worsen the situation. Is it really just as simple as deciding to close easily identifiable loop holes just like that ?
Most of us have avoided tax when we don't buy our DVD from a friendly high street shop (if they arent already avoiding tax as well) when we instead order it from a Jersey supplier .. we are supporting this loophole exploitation yet calling it immoral in the same breath.
Its good to see some rational argument on this subject
Tax evasion is illegal, tax avoidance is not.
Moral arguments don't come into it (unless we wish to open up the can of worms about the immorality of successive Governments using our taxes to pay for armaments, starting wars, paying people more for not working than those in work can earn etc)
Quote: The law says that everyone has the right so to adjust his affairs as to pay the least amount of tax possible. You can't blame anyone for taking advantage of this & if the government don't like it, they should close the loopholes that their badly drafted laws have opened. And if you don't like it, just ask yourself what you'ld do given the chance to avoid paying tax legally.
Don't you think that tax laws are badly drafted precisely because it allows "our people" to avoid paying tax.
I think, without us all being experts in corporate tax, it is not a case of badly drafted laws any more than it is about realising no laws are perfect, NONE, and never will be, and if we make laws so draconian and restrictive we will find we scare any investment abroad anyway.
Quote: if we make laws so draconian and restrictive we will find we scare any investment abroad anyway.
Hmm, I'm not convinced by that argument. In am ephemeral business like banking, I can see them moving abroad pretty easily as there is really not much physically in place. But Boots?, Starbucks?, Vodaphone? if Boots were to pull out of Britain would we suddenly all stop buying asprins? no we would buy them from another chemist. Same for the other two, they should pay the same levels of tax as their competitors and stop leaching off the country.
I don't follow the "ohh their is nothing we can do" line either. We have introduced windfall taxes before, so if need be pass tax laws detailing the specific companies to tax.
The normal working man cannot find a loophole to dodge paying his tax (PAYE) So, again the normal working man is being hit in the pocket, while these large companies pay little or no tax at all. How can normal working class people just sit back and say it's OK for these companies to cheat paying there share of the tax burden? Any and all loopholes should be shut and any company who trades in the UK, pays it's fair share of tax. If their headquarters are in Outer Mongolia, they should still pay tax for any business run in the UK.
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