Big Companies Avoiding Tax
Discussion
Google and Amazon are in the dock for tax avoidance - again.
http://www.theweek.co.uk/business/tax-avoidance/53...
Is this OK so long as it is legal?
I wish my tax rate was as low as Amazons. Maybe I need to transfer-price my profits to Jersey?
http://www.theweek.co.uk/business/tax-avoidance/53...
Is this OK so long as it is legal?
I wish my tax rate was as low as Amazons. Maybe I need to transfer-price my profits to Jersey?
The Week said:
According to The Guardian, which has published an in-depth investigation into Amazon's finances today, "the online retailer is pushing the tax rulebook to its limits to minimise its tax bill."
The Guardian are in no position to take the moral high ground on tax dodging.They should be careful with those stones.
This seems really really simple to me.
Tax man has many discretionary powers, so here's an extension.
Default position is that tax is paid on profit, but has the power, if he suspects abuse (obviously is the case with many multi nationals as listed) to tax on turnover.
Assume 10% of turnover is profit, and assume tax on profit is 20%, tax turnover at 2%,and the jobs done. How hard can it be??
Tax man has many discretionary powers, so here's an extension.
Default position is that tax is paid on profit, but has the power, if he suspects abuse (obviously is the case with many multi nationals as listed) to tax on turnover.
Assume 10% of turnover is profit, and assume tax on profit is 20%, tax turnover at 2%,and the jobs done. How hard can it be??
SmoothCriminal said:
Why would anyone pay more tax than they were legally obliged to?
It's up to the government to legislate to make sure that all sales in the uk are subject to the appropriate taxes.
Yes - the government set the tax laws and are now moaning that some people are compiling with them.It's up to the government to legislate to make sure that all sales in the uk are subject to the appropriate taxes.
OK some would say the companies are using them to avoid paying tax but that's the governments fault not the companies.
But I do wonder why/who gave Amazon £2.5m in grants.
bearman68 said:
This seems really really simple to me.
Tax man has many discretionary powers, so here's an extension.
Default position is that tax is paid on profit, but has the power, if he suspects abuse (obviously is the case with many multi nationals as listed) to tax on turnover.
Assume 10% of turnover is profit, and assume tax on profit is 20%, tax turnover at 2%,and the jobs done. How hard can it be??
So if you make a loss you still get taxed on no profits?Tax man has many discretionary powers, so here's an extension.
Default position is that tax is paid on profit, but has the power, if he suspects abuse (obviously is the case with many multi nationals as listed) to tax on turnover.
Assume 10% of turnover is profit, and assume tax on profit is 20%, tax turnover at 2%,and the jobs done. How hard can it be??
You need to read the [i]Eye[/] on the government's view on those companies that pay light tax rates. Taxes are for the little companies. For the big ones it is all up to negotiation. Vodaphone, et al enter into talks with certain government quangos and all of a sudden the tax they should have paid is recalculated and everyone is happy.
The Eye names names but I reckon that Haymarket would not appreciate them being repeated on here.
There is little doubt that some companies tell lies about costs and profits. Or actually that is an exaggeration. There is no doubt that some companies tell lies about costs and profits.
Don't forget that a couple of years ago Cameron's cronies went around the world telling everyone virtually that tax rates are negotiable.
Tax is for us little people. For those at the top, who owe the most, it is something that can be lowered and all but eliminated.
The Eye names names but I reckon that Haymarket would not appreciate them being repeated on here.
There is little doubt that some companies tell lies about costs and profits. Or actually that is an exaggeration. There is no doubt that some companies tell lies about costs and profits.
Don't forget that a couple of years ago Cameron's cronies went around the world telling everyone virtually that tax rates are negotiable.
Tax is for us little people. For those at the top, who owe the most, it is something that can be lowered and all but eliminated.
Like I said, powers are discretionary, so a loss may or my not result in tax. It's easy for a multinatioanl to make a loss, it just adjusts transfer pricing to move profit to where the lower tax rates are. But this is tantamount to tax evasion, and the tax man has no power to stop it. Taxing turnover would do this - in the event of large scale tax avoidance going on.
BTW, 2% tax on 4 billion is 80 million. I'm assuming a billion is 1*10^9 (million 1*10^6)
BTW, 2% tax on 4 billion is 80 million. I'm assuming a billion is 1*10^9 (million 1*10^6)
Derek Smith said:
Taxes are for the little companies. For the big ones it is all up to negotiation. Vodaphone, et al enter into talks with certain government quangos and all of a sudden the tax they should have paid is recalculated and everyone is happy.
We have to encourage big companies to move to the UK somehow, the priority should be to maximise the number of jobs created not the amount of corporation tax paid. Even without CT big companies will pay a lot of tax, employers ni and business rates for example, but the biggest benefits will be reducing the number of unemployed and putting money in peoples pockets that will be spent on uk goods and services. Overt encouragement will be seen as state subsidy and not allowed. It would be nice if they turned a blind eye towards creative accounting at small companies as well...AJS- said:
Should you encourage big companies at the expense of smaller ones? I don't think so. But I'd favour simplification and tax cuts over endlessly chasing loop holes and more tax.
I'd be perfectly happy to abolish corporation tax entirely, as you say, it's largely optional for multinational companies anyway and as a small company owner I'm confident I could put the money to better use than the government.Whilst I'm not condoning the actions of companies like Amazon and Starbucks, the implication in the media that they pay no tax is slightly misleading. They may not be paying any corporation tax but they are still paying employer's NI, plus all of the PAYE that the individuals they employ pay, plus there is the tax take from other UK based businesses that they trade with.
The government/HMRC need to up their game to ensure that the tax system is fit for purpose and appropriately enforced, but in the meantime, directors have a responsibility to maximise returns to shareholders and surely minimising your tax bill within within the law is one way of doing this? I suppose that there is a flipside to this in that the negative publicity could impact sales but I'm guessing Amazon could afford to lose a fair few sales before it's worse off overall.
The government/HMRC need to up their game to ensure that the tax system is fit for purpose and appropriately enforced, but in the meantime, directors have a responsibility to maximise returns to shareholders and surely minimising your tax bill within within the law is one way of doing this? I suppose that there is a flipside to this in that the negative publicity could impact sales but I'm guessing Amazon could afford to lose a fair few sales before it's worse off overall.
People need to get that tax jurisdiction is now just another supply chain decision for many businesses; if the Govt wish to maximise their tax take, they need to offer a very competitive tax proposition to corporates, otherwise those corporates will make choices to go elsewhere, taking direct tax liabilities, jobs and supply contracts with them.
Those who say that the tax laws are wrong if it allows companies to avoid tax are correct. Lets give the HMRC a big fat bonus if they get the tax laws fit for the age we live in and for how much they collect legally. And the sack if they don't.
I have no issue with big companies who are paying tax within the law, all this talk of morality is a bit rich coming from MP's who don't seem to be of high morale when it comes to themselves. Instead of bleating and playing to the galleries get off their arses and fix the loopholes.
Tax and benefit cheating is rife, do you think if HMRC provide cash bounties for those who reported such activities, that we might have a lot of information to enable prosecution and collection of back tax?
I have no issue with big companies who are paying tax within the law, all this talk of morality is a bit rich coming from MP's who don't seem to be of high morale when it comes to themselves. Instead of bleating and playing to the galleries get off their arses and fix the loopholes.
Tax and benefit cheating is rife, do you think if HMRC provide cash bounties for those who reported such activities, that we might have a lot of information to enable prosecution and collection of back tax?
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