Discussion
The issue is that the law and the government of most countries has failed to predict the impact that the internet/MNC's/Data will have as well as the speed of that change. The majority of our laws are based around the idea that items and property are physical, hard to duplicate and non trivial to move.
Ignoring the fun world of tax and services look at good old napster. before MP3's if you wanted to share a cassette or Vinyl with someone you needed to physically give it to them, whilst they had it you did not, they could copy it but the speed they could make a copy was limited, and they would be creating another physical item which took up space and also cost to create. Unless you wanted to invest serious money in copying cassettes and had a small warehouse to store them in your impact on global sales was marginal. Then napster came along.... It's not doing anything clever other than matching people. The ability to instantly duplicate music at next to zero cost and requiring no physical storage to do so already existed but unless you were trading CD's with friends at school not much happened. Suddenly though anyone in the world could be friends and swap this data instantly... uh oh that's a huge change if everyone used this you'd only need one copy of a cd bought and the whole world would be able to get it for free!
Since then people have failed to learn the lesson that anything gated on the ability to match two people together would never be practical will in fact eventually be practical. air BnB is just advertising your room in your local paper but which everyone gets instantly and is instantly searchable, suddenly you can rent par tof your house out everyday of the year, that never used to be a buisness but now it is, has the law really changed? Not really.
So long story short instead of worrying if Vodafone have paid all the millions they should HMRC/governments/the law should be thinking how the system should really work at some point these companies will be providing services so entwined in your everyday life that they can't be easily removed or substantially changed. Right now if you decide to level a load of tax against uber or deliveroo the worst that happens is they become unavailable and we all have to collect our own takeaways etc. At some point a service will arrive that isn't untangle able and at that point the government is screwed and the tables will turn almost overnight.
Ignoring the fun world of tax and services look at good old napster. before MP3's if you wanted to share a cassette or Vinyl with someone you needed to physically give it to them, whilst they had it you did not, they could copy it but the speed they could make a copy was limited, and they would be creating another physical item which took up space and also cost to create. Unless you wanted to invest serious money in copying cassettes and had a small warehouse to store them in your impact on global sales was marginal. Then napster came along.... It's not doing anything clever other than matching people. The ability to instantly duplicate music at next to zero cost and requiring no physical storage to do so already existed but unless you were trading CD's with friends at school not much happened. Suddenly though anyone in the world could be friends and swap this data instantly... uh oh that's a huge change if everyone used this you'd only need one copy of a cd bought and the whole world would be able to get it for free!
Since then people have failed to learn the lesson that anything gated on the ability to match two people together would never be practical will in fact eventually be practical. air BnB is just advertising your room in your local paper but which everyone gets instantly and is instantly searchable, suddenly you can rent par tof your house out everyday of the year, that never used to be a buisness but now it is, has the law really changed? Not really.
So long story short instead of worrying if Vodafone have paid all the millions they should HMRC/governments/the law should be thinking how the system should really work at some point these companies will be providing services so entwined in your everyday life that they can't be easily removed or substantially changed. Right now if you decide to level a load of tax against uber or deliveroo the worst that happens is they become unavailable and we all have to collect our own takeaways etc. At some point a service will arrive that isn't untangle able and at that point the government is screwed and the tables will turn almost overnight.
I asked:-
"What is your agenda on this?"
Your reply was:-
I find it strange that someone can be so interested in VAT.
Is that right? Is it really VAT, or tax in general that interests you and the fact that it happens to be Uber that is involved is incidental?
"What is your agenda on this?"
Your reply was:-
JPJPJP said:
You asked the same question many pages back. Here is the answer I gave then. It hasn't changed.
"At the risk of repeating myself (again), I am interested in why it is taking a private prosecution to get the question of a potential several hundred million pound VAT liability looked at.
That it is Uber that is involved is of no real interest to me.
That it isn't HMRC that is being seen to be asking the question is of great interest to me"
My apologies for my poor memory."At the risk of repeating myself (again), I am interested in why it is taking a private prosecution to get the question of a potential several hundred million pound VAT liability looked at.
That it is Uber that is involved is of no real interest to me.
That it isn't HMRC that is being seen to be asking the question is of great interest to me"
I find it strange that someone can be so interested in VAT.
Is that right? Is it really VAT, or tax in general that interests you and the fact that it happens to be Uber that is involved is incidental?
I have a particularly unhealthy interest in vat just now. I could blame a talk by Rita de la Feria for initially piquing my interest, but that would be unfair on her.
HMRC’s willingness to come down like a tonne of bricks (rightly) on uk traders for any breach (intentionally or by accident) of the staggeringly complex legislation, whilst seemingly allowing, eg Uber, to avoid scrutiny and for non uk online sellers to seemingly just ignore vat liabilities entirely
HMRC’s willingness to come down like a tonne of bricks (rightly) on uk traders for any breach (intentionally or by accident) of the staggeringly complex legislation, whilst seemingly allowing, eg Uber, to avoid scrutiny and for non uk online sellers to seemingly just ignore vat liabilities entirely
I happened to see a select committee questioning of HMRC a while back.
Apparently HMRC have tried to enforce VAT on similar operations six times already, and lost every time. They claimed to be unwilling to try again without further justification of a likely success.
The ECJ decision last week may do it.
Apparently HMRC have tried to enforce VAT on similar operations six times already, and lost every time. They claimed to be unwilling to try again without further justification of a likely success.
The ECJ decision last week may do it.
Indeed, that was mentioned on this thread previously
I read the tribunal reports on a couple of the HMRC failures and can understand their reluctance to some extent. But I can see the argument that says Uber is different enough to warrant another look too
Maugham touches in it in his latest update (linked above)
I read the tribunal reports on a couple of the HMRC failures and can understand their reluctance to some extent. But I can see the argument that says Uber is different enough to warrant another look too
Maugham touches in it in his latest update (linked above)
JPJPJP said:
Indeed, that was mentioned on this thread previously
I read the tribunal reports on a couple of the HMRC failures and can understand their reluctance to some extent. But I can see the argument that says Uber is different enough to warrant another look too
Maugham touches in it in his latest update (linked above)
Uber hasn't changed in that time. I read the tribunal reports on a couple of the HMRC failures and can understand their reluctance to some extent. But I can see the argument that says Uber is different enough to warrant another look too
Maugham touches in it in his latest update (linked above)
We could argue that clarity of the law has with the ECJ ruling and so maybe it's worth another go. But then I actually respect HMRC's approach. Them constantly having another go at tax payers' expense is not good use of money unless they *know* they can win.
Maybe Maugham thinks things have changed or that he thinks he's better than HMRC's lawyers. Maybe he is. But there's an irony in your interest noted above JPJPJP...if HMRC had had 6x legal goes at a smaller industry, I would imagine most people would be up in arms about that level of badgering.
I agree with what I think MDMetal is noting...HMRC need to revamp the way the rules work to "design in" coverage of modern business methods. Simplify the code and maybe even simply acknowledge that in some areas certain types of tax are outmoded/inappropriate. Let them slide legitimately to allow other taxes to be reaped (Uber employees spending their ill gotten gains; Uber users more inclined to go out and spend their ill gotten gains on booze etc etc). Maybe consider dropping VAT on all taxi rides if levelling the playing field is meant to be am aim. And hotel rooms etc.
Murph7355 said:
JPJPJP said:
Indeed, that was mentioned on this thread previously
I read the tribunal reports on a couple of the HMRC failures and can understand their reluctance to some extent. But I can see the argument that says Uber is different enough to warrant another look too
Maugham touches in it in his latest update (linked above)
Uber hasn't changed in that time. I read the tribunal reports on a couple of the HMRC failures and can understand their reluctance to some extent. But I can see the argument that says Uber is different enough to warrant another look too
Maugham touches in it in his latest update (linked above)
We could argue that clarity of the law has with the ECJ ruling and so maybe it's worth another go. But then I actually respect HMRC's approach. Them constantly having another go at tax payers' expense is not good use of money unless they *know* they can win.
Maybe Maugham thinks things have changed or that he thinks he's better than HMRC's lawyers. Maybe he is. But there's an irony in your interest noted above JPJPJP...if HMRC had had 6x legal goes at a smaller industry, I would imagine most people would be up in arms about that level of badgering.
I agree with what I think MDMetal is noting...HMRC need to revamp the way the rules work to "design in" coverage of modern business methods. Simplify the code and maybe even simply acknowledge that in some areas certain types of tax are outmoded/inappropriate. Let them slide legitimately to allow other taxes to be reaped (Uber employees spending their ill gotten gains; Uber users more inclined to go out and spend their ill gotten gains on booze etc etc). Maybe consider dropping VAT on all taxi rides if levelling the playing field is meant to be am aim. And hotel rooms etc.
Alpinestars said:
Why not repeal VAT? The ultimate level playing field.
Surely though a sales tax like VAT has advantages:- it raises a lot of cash
- it's hard to avoid for the most part (black economy aside, and does income/corporation tax do any better here?)
- money comes to the govt quite promptly
- it automatically tracks inflation
- there is some ability to manage behaviours ( no-one mention tampons or pasties!)
The US has regional sales taxes, as do a lot of EU countries I believe?
I can't see VAT going anywhere anytime soon. It also gives the govt. the chance to poke their nose into people's affairs....
Ian Geary said:
Alpinestars said:
Why not repeal VAT? The ultimate level playing field.
Surely though a sales tax like VAT has advantages:- it raises a lot of cash
- it's hard to avoid for the most part (black economy aside, and does income/corporation tax do any better here?)
- money comes to the govt quite promptly
- it automatically tracks inflation
- there is some ability to manage behaviours ( no-one mention tampons or pasties!)
The US has regional sales taxes, as do a lot of EU countries I believe?
I can't see VAT going anywhere anytime soon. It also gives the govt. the chance to poke their nose into people's affairs....
And you wouldn't for the reasons you've pointed out
Alpinestars said:
Why not repeal VAT? The ultimate level playing field.
Personally I think more tax should be reaped through consumption. And I'm not convinced levelling of playing fields is necessarily a great idea (all businesses are different, as these cases ably demonstrate) - unintended consequences etc. Others seem to think this is necessary though.JPJPJP's idea of lowering the VAT threshold would probably be a better choice in many respects. But I can imagine a lot of smaller traders struggling with the requirements. There is also the problem of many thinking VAT penalises the poor disproportionately (am not sure how much of a material problem that really is).
A wholesale rethink has to be the best way to tackle this, but I don't think you can just do this with one area of taxation.
Murph7355 said:
I agree with what I think MDMetal is noting...HMRC need to revamp the way the rules work to "design in" coverage of modern business methods. Simplify the code and maybe even simply acknowledge that in some areas certain types of tax are outmoded/inappropriate. Let them slide legitimately to allow other taxes to be reaped (Uber employees spending their ill gotten gains; Uber users more inclined to go out and spend their ill gotten gains on booze etc etc). Maybe consider dropping VAT on all taxi rides if levelling the playing field is meant to be am aim. And hotel rooms etc.
There is a lot of work going on internationally to address some of these issues. At the moment most of the work is around evasion and identification of entities operating in different jurisdiction.
The problem with taxing companies which operate via the internet is that there is no requirement for the company to have any presence in the jurisdiction of its customers. That makes it impossible to tax with out international cooperation.
Mrr T said:
There is a lot of work going on internationally to address some of these issues.
At the moment most of the work is around evasion and identification of entities operating in different jurisdiction.
The problem with taxing companies which operate via the internet is that there is no requirement for the company to have any presence in the jurisdiction of its customers. That makes it impossible to tax with out international cooperation.
Agreed. Though I suspect international cooperation will only go so far. There's a lot of money at stake and nations want as big a stake of it as possible. It will only take one or two countries not to play ball and it's back to square one.At the moment most of the work is around evasion and identification of entities operating in different jurisdiction.
The problem with taxing companies which operate via the internet is that there is no requirement for the company to have any presence in the jurisdiction of its customers. That makes it impossible to tax with out international cooperation.
Very interesting challenges.
Murph7355 said:
Mrr T said:
There is a lot of work going on internationally to address some of these issues.
At the moment most of the work is around evasion and identification of entities operating in different jurisdiction.
The problem with taxing companies which operate via the internet is that there is no requirement for the company to have any presence in the jurisdiction of its customers. That makes it impossible to tax with out international cooperation.
Agreed. Though I suspect international cooperation will only go so far. There's a lot of money at stake and nations want as big a stake of it as possible. It will only take one or two countries not to play ball and it's back to square one.At the moment most of the work is around evasion and identification of entities operating in different jurisdiction.
The problem with taxing companies which operate via the internet is that there is no requirement for the company to have any presence in the jurisdiction of its customers. That makes it impossible to tax with out international cooperation.
Very interesting challenges.
Here is Maugham substantiating the claim he made previously that he had evidence that suggested that HMRC demonstrates a lax attitude towards the taxation of multinationals
https://waitingfortax.com/2018/01/23/dont-be-too-h...
"The link below is to an extract from a covertly recorded 70 minute conversation between Guy Westhead, a senior member of HMRC’s team dealing with VAT policy, and a Mr Richard Allen that took place in late 2015."
https://waitingfortax.com/2018/01/23/dont-be-too-h...
"The link below is to an extract from a covertly recorded 70 minute conversation between Guy Westhead, a senior member of HMRC’s team dealing with VAT policy, and a Mr Richard Allen that took place in late 2015."
Thanks, hopefully all good news.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff