Snap General Election?

[sidicks]

Tryke3 said:

Facebook made 6 billion last year, whatever profits are made no one really knows exactly

The accounts would suggest otherwise.

Facebook's total profits are irrelevant as far as their UK tax liability is concerned.
HTH

Please confirm your source for your claim that 'Facebook made billions in the UK'!!

[JawKnee]

robemcdonald said:

Sidicks you keep saying I don't understand the basics.

That's Sidicks for you in one sentence. Like a poorly trained parrot, he is incapable of saying anything else.

[rich1231]

Cant we discuss Labour's amazing new economy crippling policies?

Instant full employment rights, stronger unions, and magic money trees planted all over the UK?

[Yipper]

rich1231 said:

Cant we discuss Labour's amazing new economy crippling policies?

Instant full employment rights, stronger unions, and magic money trees planted all over the UK?

Don't mock too much. There has been a *massive* swing in betting and polling toward Corbyn this week since he announced 4 extra bank holidays. The moron masses have lapped it up.

And the fascist anti-Brexit maniacs are ploughing full-steam ahead with attempted tactical voting (even though it will never overturn Brexit).

At some bookies, Labour bets are now outstripping Tory bets. If that trend continues, commie weird-beard Corbyn will be Prime Minister about a month from now...

[Tryke3]

sidicks said:

Tryke3 said:

Facebook made 6 billion last year, whatever profits are made no one really knows exactly

The accounts would suggest otherwise.

Facebook's total profits are irrelevant as far as their UK tax liability is concerned.
HTH

Please confirm your source for your claim that 'Facebook made billions in the UK'!!

• Billion

[PurpleAki]

JawKnee said:

He is incapable of saying anything else.

Thank goodness you don't have one favourite topic that you always talk about...

[98elise]

robemcdonald said:

Sidicks you keep saying I don't understand the basics. In an earlier post I acknowledged you probably have a greater understanding of these matters than I do. All you have really done is reiterate I don't understand. Others have joined in and claimed that I and the various articles in the left and right wing press that I have based my opinion on are misleading. As yet no one has explained why it's ok for a large corporation to pay less corporation tax than the average earner pays on PAYE. At no point have I said it was illegal, but if it were totally legitimate why were Google et al so keen to accept Osbornes deal. Why didn't they simply say "we haven't broken the law so sod off George"
I am always open to having my mind changed and very interested in learning / understanding how things work. I would genuinely be grateful if you could try to enlighten me as to how this corporate tax strategy works. I'm particularly interested in why Facebook would want to operate in the U.K. If the profit was very small. I assume there must be a financial benefit in doing so?

Edited by robemcdonald on Sunday 30th April 20:53

Because its a tax on PROFIT!!!! Whats hard to understand?

I have a small ltd co. if I pay all the money my company makes into my pocket I will pay 40% tax. If i leave it in the company the company will pay 20% tax (then I will be taxed the difference when I do take the money out). If I choose to pay all of the cash to me my company will pay ZERO corporation tax, but instead will pay more to HMRC as Income Tax and NIC.

facebook will be paying the Income Tax, Employers NI, and Employee's NI, and possibly the Apprenticeship levy on any money that is paid to staff.

If there is nothing left in the pot after money (and taxes) have been paid, then there is no CT liability.

[PurpleMoonlight]

Any chance the thread can return to the election and not Facebook?

[FiF]

PurpleMoonlight said:

Any chance the thread can return to the election and not Facebook?

Quite so, it's bloody tiresome suffering this protracted technique we are seeing of arguing without presenting a coherent clear argument as to why in the specific example being discussed.

Some of us understand the issues around this, ie how a multi national reduces a local group business' profits in order to affect local corporation tax liabilities. Continuing the argument in the manner it is proceeding is both tiresome and disruptive.

In my opinion the participants (plural) should now either take it elsewhere or shut up.

[Welshbeef]

Tryke3 said:

Facebook made 6 billion last year, whatever profits are made no one really knows exactly

You are really going to hate it when you learn how little tax the banks have paid since 2008 - and try guessing how long it will take for RBS to actually pay any corporation tax ....it's also sacked lots of staff and so many high earners who would all have been paying 45% tax. Oh well.

[robemcdonald]

98elise said:

robemcdonald said:

Sidicks you keep saying I don't understand the basics. In an earlier post I acknowledged you probably have a greater understanding of these matters than I do. All you have really done is reiterate I don't understand. Others have joined in and claimed that I and the various articles in the left and right wing press that I have based my opinion on are misleading. As yet no one has explained why it's ok for a large corporation to pay less corporation tax than the average earner pays on PAYE. At no point have I said it was illegal, but if it were totally legitimate why were Google et al so keen to accept Osbornes deal. Why didn't they simply say "we haven't broken the law so sod off George"
I am always open to having my mind changed and very interested in learning / understanding how things work. I would genuinely be grateful if you could try to enlighten me as to how this corporate tax strategy works. I'm particularly interested in why Facebook would want to operate in the U.K. If the profit was very small. I assume there must be a financial benefit in doing so?

Edited by robemcdonald on Sunday 30th April 20:53

Because its a tax on PROFIT!!!! Whats hard to understand?

I have a small ltd co. if I pay all the money my company makes into my pocket I will pay 40% tax. If i leave it in the company the company will pay 20% tax (then I will be taxed the difference when I do take the money out). If I choose to pay all of the cash to me my company will pay ZERO corporation tax, but instead will pay more to HMRC as Income Tax and NIC.

facebook will be paying the Income Tax, Employers NI, and Employee's NI, and possibly the Apprenticeship levy on any money that is paid to staff.

If there is nothing left in the pot after money (and taxes) have been paid, then there is no CT liability.

I understand that and if you owned and worked for your own company it makes sense. But why would a large corporation do it?
It's not just Facebook either I just used them as an example as £4K corporation tax in 2012 seemed a joke. Last year google paid around £140m in tax (sorry can't remember the exact figure) after some previously low figures and cutting a deal with the previous chancellor. Why change if there wasn't something dodgy going on?

Purple moonlight.

I take your point, but the original post was about cuts to services that are already happening or being proposed. I was accused of believing in a magic money tree,and we ended up here.

It is about the election though. We need more money. Do we take it from those that have the most or least? I personally fall into the former category as I earn a reasonable salary. Now I'd rather the money came from a big corporate than me, but I'd also be prepared to give a bit more myself if it means not taking from people who have nothing. It looks as though the PM agrees with me as she yesterday discussed tax increases for medium to high earners. If this makes it to the manifesto and results in fewer cuts for the poor I will definitely vote Conservative.

[PurpleMoonlight]

robemcdonald said:

It is about the election though. We need more money. Do we take it from those that have the most or least? I personally fall into the former category as I earn a reasonable salary. Now I'd rather the money came from a big corporate than me, but I'd also be prepared to give a bit more myself if it means not taking from people who have nothing. It looks as though the PM agrees with me as she yesterday discussed tax increases for medium to high earners. If this makes it to the manifesto and results in fewer cuts for the poor I will definitely vote Conservative.

The current tax burden is the highest it has been for 30 odd years I believe. The Government cannot just keep taking more and more. It needs to spend less even if that is painful for some.

For a start, we could reduce the number of MP's by 50%.

[dimots]

Arguing over this point with an accountant who believes it is the duty of every business to pay as little tax as it can get away with is truly a waste of energy.

However, should a forward thinking government wish to raise more taxes, clean up the online advertising industry, reduce spam and scams, and also deliver the arguable side-benefit of improving the chance of bricks and mortar high street stores remaining competitive it should introduce a point of consumption tax on online ad impressions delivered to residents in the U.K.

Online advertising is currently too cheap because many of the companies offering it are dodging taxes which should be being collected and priced into their business models.

[andy_s]

dimots said:

Arguing over this point with an accountant who believes it is the duty of every business to pay as little tax as it can get away with is truly a waste of energy.

However, should a forward thinking government wish to raise more taxes, clean up the online advertising industry, reduce spam and scams, and also deliver the arguable side-benefit of improving the chance of bricks and mortar high street stores remaining competitive it should introduce a point of consumption tax on online ad impressions delivered to residents in the U.K.

Online advertising is currently too cheap because many of the companies offering it are dodging taxes which should be being collected and priced into their business models.

Business' don't exist for the benefit of the exchequer, they exist for the benefit of the shareholder.

Better to accept the way the world is and adapt to it than try to turn back the tide; I don't think taxing adverts is particularly practical, and I'd like to see how you would artificially rig online advertising prices on a global platform...

[dimots]

Why do you think it would be difficult to implement? I don't understand your reasoning? Should be easy.

E.g. Potential advertisers typically bid on ad impressions at a price per impression in each country/locality. Just add 10% to the UK price before bidding commences and siphon that off to taxman.

India and Canada currently leading online ad tax initiatives. Don't see why UK couldn't jump in. Plenty of cash to be claimed and the only effect on Joe public is less crappy online ads.

Edited by dimots on Monday 1st May 09:15

[turbobloke]

dimots said:

...the duty of every business to pay as little tax as it can get away with...

That's a curious way of looking at the world.

Is paying the correct level of stamp duty on a house purchase 'as little as you can get away with' or is it paying the correct amount of duty?

If a non-VAT registered business buys some stock and pays 20% VAT as the supplier is registered, is that as little as they can get away with or should the seller vary the VAT up a bit if the business is profitable? If so, by how much, and who decides?

Paying the correct amount of tax is just that, it's not 'as little as you can get away with' it's the amount required under tax laws and regulations.

If anyone thinks otherwise and buys a house, runs a business or has a job, why can't they just pay over the odds tax-wise and feel good?

If there are people out there who think along the lines of increasing 'the little they can get away with' and pay over the odds, then most other more sensible folks buying houses / running businesses / earning a salary (etc) could pay a bit less due to those paying a bit more. Win-Win.

Then again the gov't might just pocket the lot, as much as they can get away with.

[andy_s]

dimots said:

Why do you think it would be difficult to implement? I don't understand your reasoning? Should be easy.

India and Canada currently leading online ad tax initiatives. Don't see why UK couldn't jump in. Plenty of cash to be claimed and the only effect on Joe public is less crappy online ads.

They're proposals for preventing online advertising being tax deductible, why it's difficult in practise is that it's not how generalised ad placement works - you don't pay to put your ad in the sidebar of pistonheads specifically, you pay for google [or other] to display your ad when it lines up with a viewers viewing habits and internet history/cookies. You (the advertiser) aren't placing the ad specifically.

It's something that has to be thrashed out, at least that's my understanding.

I agree that the government need to move with the times, but they should do so with a pragmatism about how it actually works - the problem with a lot of proposals of this nature is it assumes the 'target' won't move and adapt, which is patently not the case.

[CambsBill]

sidicks said:

robemcdonald said:

Facebook UK isn't a large Corporation
Facebook UK only made a small profit in the UK - corporation tax is payable on profit
HTH



As explained already:
Profits were low because bonuses were paid to staff.

Possibly unlike some I just took a look at Facebook UK's accounts, and what they tell you is:

Turnover for 2015 was £211m, double that of 2014
It made a loss before tax of £52m, earning itself a deferred CT credit of £16.5m (to offset against any future profits)
The loss was the result of £71m worth of bonus accruals on a share based system, i.e. not a cash cost to the business. Through clever accounting they are able to add this back to the balance sheet to stop the company falling into technical insolvency

All in all, whilst I'm certain that what they are doing is legal under current rules, one could certainly challenge the ethics - or indeed the business sense - of a company that appears to accrue more in bonuses (one third of turnover in fact) than it makes in profit. Certainly they are not contributing Corporation Tax into the Exchequer

[CambsBill]

Back on topic, is anyone tracking the many and wonderful ways the Labour party is promising to spend the increase in Corporation Tax that it plans to enact, or even better calculate the rate of CT that would be required to raise the money?

[robemcdonald]

andy_s said:

Business' don't exist for the benefit of the exchequer, they exist for the benefit of the shareholder.

Without wanting to tread old ground this statement backs up my point. If a company that employs thousands of people only makes a £24k profit what's in it for the share holders?
They're only one miscalculated away from making a loss.

You then say it's easier just to leave things as they are. Once again making my original point; it's easier to take from the poorest than to try and take on the big boys.

At least you've been honest about it rather than offer up a rationale to justify it.