Reforming UK Tax System
Discussion
98elise said:
Turnover tax is a terrible idea. You would be taxing every link in the chain regardless of any profit. Let's say a normal chain is
Supplier of raw materials
Manufacturer of product
Wholesaler
Retailer
At each stage a turnover tax is applied. The product has been taxed 4 times if it's sourced and manufactured in the UK and costs would soar. Goods bought in from other countries would be taxed less. Exports would not be competitive.
Every link is the chain is taxed now. None exits to make a loss to support the other.Supplier of raw materials
Manufacturer of product
Wholesaler
Retailer
At each stage a turnover tax is applied. The product has been taxed 4 times if it's sourced and manufactured in the UK and costs would soar. Goods bought in from other countries would be taxed less. Exports would not be competitive.
kwittery on the level of 2 + 2 = 1917. PurpleMoonlight said:
98elise said:
Turnover tax is a terrible idea. You would be taxing every link in the chain regardless of any profit. Let's say a normal chain is
Supplier of raw materials
Manufacturer of product
Wholesaler
Retailer
At each stage a turnover tax is applied. The product has been taxed 4 times if it's sourced and manufactured in the UK and costs would soar. Goods bought in from other countries would be taxed less. Exports would not be competitive.
Every link is the chain is taxed now. None exits to make a loss to support the other.Supplier of raw materials
Manufacturer of product
Wholesaler
Retailer
At each stage a turnover tax is applied. The product has been taxed 4 times if it's sourced and manufactured in the UK and costs would soar. Goods bought in from other countries would be taxed less. Exports would not be competitive.
Let's say the turnover tax was 20%. The cost of your product increases by 20% every time it moves down the supply chain, and that's before the company makes a penny.
98elise said:
Currently taxed on added value and profit. If you buy something for x and sell for y you are taxed on x-y. If you tax turnover then you are taxed on y, as is every link in the chain, each increasing the cost.
Let's say the turnover tax was 20%. The cost of your product increases by 20% every time it moves down the supply chain, and that's before the company makes a penny.
A turnover tax percentage would be a lot less than corporation tax percentage.Let's say the turnover tax was 20%. The cost of your product increases by 20% every time it moves down the supply chain, and that's before the company makes a penny.
It would be designed so that there is little difference for most businesses but will combat the multinationals currently abusing the system.
fblm said:
This is total rubbish. US companies currently have $2500bn 'trapped offshore' that they can not repatriate without paying 35% US CT on. Apple, GE and MS have $300bn alone.
That's correct. The reason the money is "trapped" overseas is because the parent company is domiciled in the US and the companies don't want to pay 35% CT. And that's exactly why some of them have looked into transferring their "Resident status" to Ireland, so they can pay a lower level of tax on their profits. have a look at the link below;http://www.bbc.co.uk/news/business-20580545
fblm said:
Just because a vehicle is registered in a low/no tax country doesn't mean it doesn't have bank/broker accounts in New York or London. In fact even if it did have an offshore bank account and kept the money in cash 'offshore' (they don't), that banks balances are all washed to their correspondent banks in NY and London at the end of every day anyway. The parent might own the offshore sub and the funds of the sub might be onshore but it can't transfer the funds to the parent in any way.
Intra-group cash transfers are unrelated to tax. I'm not talking about the physical transfer of cash so I'm not really sure why you're bring it up 
fblm said:
Your link said:
A number of high-profile companies have come under fire for "inversions" — deals where a U.S. company buys a firm in a lower-tax nation and switches its domicile to escape high U.S. levies.
This is an example of how countries try to locate themselves in low-tax jurisdictions, to minimise the amount of CT that they pay. The ultimate example of this would be Bermuda or the Cayman islands.....fblm said:
No it really isn't.
Ok. Why do you think they are commonly referred to as "tax havens", if it isn't to avoid tax?98elise said:
Turnover tax is a terrible idea. You would be taxing every link in the chain regardless of any profit. Let's say a normal chain is
Supplier of raw materials
Manufacturer of product
Wholesaler
Retailer
At each stage a turnover tax is applied. The product has been taxed 4 times if it's sourced and manufactured in the UK and costs would soar. Goods bought in from other countries would be taxed less. Exports would not be competitive.
We already have a turnover tax in the form of VAT and this could work in the same way (tax owed later in the chain is paid net of tax paid earlier). The only difference would be is that you would be able to offset this against your CT liability (which you can't with VAT).Supplier of raw materials
Manufacturer of product
Wholesaler
Retailer
At each stage a turnover tax is applied. The product has been taxed 4 times if it's sourced and manufactured in the UK and costs would soar. Goods bought in from other countries would be taxed less. Exports would not be competitive.
Countdown said:
Your link said:
A number of high-profile companies have come under fire for "inversions" — deals where a U.S. company buys a firm in a lower-tax nation and switches its domicile to escape high U.S. levies.
This is an example of how countries try to locate themselves in low-tax jurisdictions, to minimise the amount of CT that they pay. The ultimate example of this would be Bermuda or the Cayman islands.....Ok. Why do you think they are commonly referred to as "tax havens", if it isn't to avoid tax?
sidicks said:
How do the owners get their money back out of these 'tax havens' ?
They use bags like these....
Or...if it's a company that's resident/domiciled in the TH they pay the shaeholders via dividends. If it's the individual themselves that is resident/domiciled then the cash is already in their bank account.
Countdown said:
Or...if it's a company that's resident/domiciled in the TH they pay the shaeholders via dividends. If it's the individual themselves that is resident/domiciled then the cash is already in their bank account.
So which scenario applies to the situation of the companies which you have highlighted earlier in this thread?sidicks said:
Countdown said:
Or...if it's a company that's resident/domiciled in the TH they pay the shaeholders via dividends. If it's the individual themselves that is resident/domiciled then the cash is already in their bank account.
So which scenario applies to the situation of the companies which you have highlighted earlier in this thread?Countdown said:
Help me out here... which companies have I highlighted earlier in this thread? Ive had a quick look back and I can't see where I've referred to any particular company.
OK, some people in this thread have highlighted a 'turnover tax' as a means of addressing what they perceive as unfairness in the corporate tax system. You've highlighted tax havens as an issue.Which companies did you have in mind?
PurpleMoonlight said:
Evanivitch said:
Starbucks would disagree.
Starbucks is one entity though. They manipulate their structure to pay little tax.A turnover tax would combat that.
Countdown said:
fblm said:
This is total rubbish. US companies currently have $2500bn 'trapped offshore' that they can not repatriate without paying 35% US CT on. Apple, GE and MS have $300bn alone.
That's correct. The reason the money is "trapped" overseas is because the parent company is domiciled in the US and the companies don't want to pay 35% CT. And that's exactly why some of them have looked into transferring their "Resident status" to Ireland, so they can pay a lower level of tax on their profits. have a look at the link below;http://www.bbc.co.uk/news/business-20580545
Any idea why labour have blocked reforms. Is it to keep the reforms for their own manifesto, so they can keep moaning that Tories are letting companies slip with their tax or just because they are tossers....... Or something else.
http://www.telegraph.co.uk/news/2017/04/28/labour-...
http://www.telegraph.co.uk/news/2017/04/28/labour-...
Countdown said:
fblm said:
Countdown said:
Of course they can. If the Tax Haven has a CT rate of 0.00005% then, once that tax has been paid, there's nothing to stop the company paying out the profits as dividends. Do you think profits just sit in tax havens for ever?
This is total rubbish. US companies currently have $2500bn 'trapped offshore' that they can not repatriate without paying 35% US CT on. Apple, GE and MS have $300bn alone. Countdown said:
Your link said:
A number of high-profile companies have come under fire for "inversions" — deals where a U.S. company buys a firm in a lower-tax nation and switches its domicile to escape high U.S. levies.
This is an example of how countries try to locate themselves in low-tax jurisdictions, to minimise the amount of CT that they pay. The ultimate example of this would be Bermuda or the Cayman islands.....Countdown said:
fblm said:
Countdown said:
Why can't the parent company itself be registered in a Tax haven? That's why places like Bermuda and the Cayman Islands exist.
No it really isn't.
fblm said:
To wind up the slack jawed? You implied Bermuda and Cayman ''exist'' for people to register their parent companies there. They don't. Virtually no one does, it doesn't achieve anything unless it's genuinely domiciled there, which no one is. I wish I had known such excellent tax advice was available for free here, I could have saved myself a fortune in lawyers if only I'd asked Countdown
Bollcks, quite frankly.Feel free to explain how / why Starbucks finds it advantageous to make a "loss" in the UK for umpteen years and yet it's CFO suggests that's the ideal business model.
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