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Another thought struck me .
OK, so THEY legally minimise the amount of coporate tax they pay BUT:
- they employ large numbers of people and through that pay NI contributions, VAT, rent and rates etc
- by employing the people they add to the exchequer in two ways:
- the employees are able to contribute directly via income tax and indirectly via sales taxes etc
- they aren't claiming social security
- even though some (most ) of THEIR product may come via other countries they will still have a significant positive effect on local economies via the need for services and products
The story of the Golden Goose comes to mind, I think we need to beware of killing off sources of taxation & revenue streams to this country in our desire to see that THEY are not allowed to "Get Away With It".
Business is there to maximise profit and will go wherever it is easiest to do so. The UK is not such a large market that these global organisations will feel that they have to stay here if it becomes non-profitable compared to countries with less onerous tax regimes and a less hostile press
(note "THEY" is any of the large organisations that we love to hate )
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Quote: The UK is not such a large market that these global organisations will feel that they have to stay here if it becomes non-profitable
And yet their competitors manage to pay UK taxes and stay profitable. Costa pay UK tax and Starbucks avoid it, seriously is it likely that Starbucks are making so little profit that if they had to pay tax they would pull out of the UK ? If they are they must be running a very inefficient ship compared to Costa.
If Starbucks pulled out another company would take their place, same for most of the others.
Why should a multi-national have a tax advantage over a UK business ?
So ebay is the latest to be avoiding UK corporation tax http://www.bbc.co.uk/news/business-20022365
Its a common practice.
If all the large players are set up like this is this unfair an unfair business practice to the new enterprises trying to start up?
Small player CompanyUK pays UK tax as it should and this make all our lives easier (in the UK), But CorporateWld make more money from the sale, not due to economies of scale but due to basically just not paying tax.
When taking a buying decision would having a "Fair Trade UK" tax index change how you buy - e.g.
D7000 £701 (UKTax £1) CorporateWld
D7000 £710 (UKTax £10) CompanyUK
Would you pay the extra £9 to know that goes into the government coffers, or would you buy from CorporateWld who are trading in a way that sees them choosing the lowest tax haven country to base operations from?
When thinking about this, remember that without cash from trade, the government will either need more direct employee tax or have less for pensions etc.
Or should VAT have a variable surcharge that try to level the tax playing field based on the prior years tax filings?
Personally I think that any company that trades in an country should be contributing both tax and employment into that country, otherwise its just the legal plundering the citizens cash with nothing being paid to the citizens country - UK Gov listen up, trading here is a privilege and company's that do that should play fair when trading here and not just syphon away cash and employment at the expense of increased personal taxation - effectively having taxpayers subsidise corporations global profits!
Most foriegn companies who sell their products in the UK call us 'Treasure Island' because they can charge more and know we will pay. Having been in the retail trade for 35 years, I can vouch for this.
Surely its the British tax structure that drives British companies to re locate their HQ abroad, Switzerland being a particuly lucrative place to do business from. I'm boycotting all Nestle's products.
Quote: If all the large players are set up like this is this unfair an unfair business practice to the new enterprises trying to start up?
its not about "Fairness" but the legal structure of the tax system.
Business has a requirement to maximise the returns to its investors (I think this may be a legal requirement?) and is entitled to use every legal means to do so.
If there is a problem surely it should be resolved by corrections to the taxation system?
As kodachrome said, if the individual feels strongly about a company the answer is in their own hands
Quote: its not about "Fairness" ...
Agreed entirely, I'd want companies to do as well as they can in all situations.
The idea i was thinking about here was anti-competition or monopolies etc. where companies position themselves in such a way that others can not compete on equal terms.
I'd like some easy to see guide of how much any company i trade with contributes to the country i live in - then i can choose which products i buy. E.g. Fair trade coffee, Salt and Fats in food. Tax paid as a % of turnover.
Quote: where companies position themselves in such a way that others can not compete on equal terms.
the trouble is that companies look for their unique selling point and raise the barrier for intervention by other companies as high as they can. You could end up arguing that patents covering unique products are "Unfair" because other companies can't compete, likewise the access to a unique product stream or material is "unfair" (I'm thinking of chemical companies here who, because of their ingenuity have developed a unique process that no other company can follow, thus gaining a market dominance in that area)
Its a real minefield this subject and much of the concern expressed seems to me to be based on subjective feeling and lack of knowledge of the real situation (and I include myself in that camp )
Quote: real minefield this subject and much of the concern expressed seems to me to be based on subjective feeling and lack of knowledge of the real situation (and I include myself in that camp )
Completely agreed again - its so easy to sensationalise news or create a story.
Its also so complex as many of us will just say - to complex for me, i'll stop asking about it.
Discussions like these help us understand if we are being ripped off or not and even if no single one of us can understand perhaps these discussions will trigger/maintain enough interest to see that in time an investigation is made to check out whether I'm paying unecessary income tax or losing my pension heating allowance because less corporate tax was collected as corporates are clever than me.
Quote: 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.
I think the point was about corporate headquarters being moved out of the UK, not that those companies cease trading here. Boots can still have as many shops here as it likes, but be headquartered outside the UK. As a corporation, their tax liability is then not to the UK but in the country where they're legally considered to be based. (They'd still have some tax exposure in the UK, though).
Windfall taxes? Yes, government has "successfully" applied them in the past, but that's not the same as saying they've achieved their objective. The law of unintended consequences usually plays a part to some degree. Besides, I think we need to be very careful about the use of this kind of approach. The term seems to imply taking a slice of money that a company has managed to rake in through luck. Kind of like "You happened to find that suitcase of money. It's not yours. We're taking a slice of it". Sometimes there's a case for that approach...maybe. But there's a huge danger in arbitrary taxation. Tax should be collected through a recognised (ideally understandable, but we all know that's not going to happen!) framework of laws and tax rates. Simply slapping a tax on a company which does well looks more like penalising legitimate success.
We should perhaps also try to remember that although there are very wealthy individuals who find it worthwhile paying accountants and lawyers to find ways to minimise their tax liability - legally - a lot of the biggest investors who hold shares in big companies and who push for the boards of those companies to do whatever it takes to reduce the tax bill, are companies themselves....banks, hedge funds, pension funds, etc. In other words, some of the money they're saving on their tax bill may well end up trickling into your ISA, pension fund, or savings account. The difference to you may be small, but the point is that it's not all about "fat cats" milking the system at the expense of the ordinary people. Everything is interconnected, and so the solutions are unlikely to be simple. Tweak one part of the system and you will have knock-on effects elsewhere.
I don't think anybody is really arguing that there's "nothing we can do". Just that moaning about something is easy - finding an answer that works is far more difficult.
Quote: whether I'm paying unecessary income tax or losing my pension heating allowance because less corporate tax was collected as corporates are clever than me.
much more likely to be because those who collect the tax on behalf of the government are incompetent as here and those who spend the taxes collected spend the money on the wrong things and in the wrong way Quote: The paper demonstrates the existing high level of optimism in project estimates arising from
underestimating project costs and duration or overestimating project benefits
I've been involved in very large commercial projects in the Oil Industry and run very large budgets myself and if these had been run in the way that successive governments run this country the company would have been bankrupt very quickly.
As it is, they just increase our taxes and keep on wasting our money
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