2021 Budget Predictions
Discussion
CraigyMc said:
Gecko, Amazon don't pay corporation tax in the UK. Corporation tax of £6m on £13bn of sales -- is functionally sod all.
No company pays tax on turnover, they pay tax on profit.And they do pay Corporation tax, as you've identified above!
CraigyMc said:
Warehoused delivery of goods is obviously cheaper than retail in shops, one of the main advantages is that shops are taxed more than warehouses. I'm not trying to get people to shop in shops any more. I'm trying to tax the shopping people actually do fairly.
Define fair?The extra tax will just be passed on to the consumer.
CraigyMc said:
Just as a wild example, compare Amazon with Tesco you have Amazon with 13bn in sales at 6m in corporation tax against Tesco with 28bn in sales and 1.9bn in corporation tax.
Capiche? Not fair.
Tax Warehouse-based companies the same as shop based ones, not far less.
Corporation tax is charged on profit, not on turnover. 'Capiche'?Capiche? Not fair.
Tax Warehouse-based companies the same as shop based ones, not far less.
Both companies pay the same taxes at the same rate.
Edited by 992_GT3 on Monday 15th February 13:55
CraigyMc said:
Gecko, Amazon don't pay corporation tax in the UK. Corporation tax of £6m on £13bn of sales -- is functionally sod all.
Warehoused delivery of goods is obviously cheaper than retail in shops, one of the main advantages is that shops are taxed more than warehouses. I'm not trying to get people to shop in shops any more. I'm trying to tax the shopping people actually do fairly.
Just as a wild example, compare Amazon with Tesco you have Amazon with 13bn in sales at 6m in corporation tax against Tesco with 28bn in sales and 1.9bn in corporation tax.
Capiche? Not fair.
Tax Warehouse-based companies the same as shop based ones, not far less.
Corporation tax is not a tax on sales/turnover. It's a tax on profits which is very different.Warehoused delivery of goods is obviously cheaper than retail in shops, one of the main advantages is that shops are taxed more than warehouses. I'm not trying to get people to shop in shops any more. I'm trying to tax the shopping people actually do fairly.
Just as a wild example, compare Amazon with Tesco you have Amazon with 13bn in sales at 6m in corporation tax against Tesco with 28bn in sales and 1.9bn in corporation tax.
Capiche? Not fair.
Tax Warehouse-based companies the same as shop based ones, not far less.
Lots of UK companies do not make a profit, so pay no corporation tax.
98elise said:
CraigyMc said:
Gecko, Amazon don't pay corporation tax in the UK. Corporation tax of £6m on £13bn of sales -- is functionally sod all.
Warehoused delivery of goods is obviously cheaper than retail in shops, one of the main advantages is that shops are taxed more than warehouses. I'm not trying to get people to shop in shops any more. I'm trying to tax the shopping people actually do fairly.
Just as a wild example, compare Amazon with Tesco you have Amazon with 13bn in sales at 6m in corporation tax against Tesco with 28bn in sales and 1.9bn in corporation tax.
Capiche? Not fair.
Tax Warehouse-based companies the same as shop based ones, not far less.
Corporation tax is not a tax on sales/turnover. It's a tax on profits which is very different.Warehoused delivery of goods is obviously cheaper than retail in shops, one of the main advantages is that shops are taxed more than warehouses. I'm not trying to get people to shop in shops any more. I'm trying to tax the shopping people actually do fairly.
Just as a wild example, compare Amazon with Tesco you have Amazon with 13bn in sales at 6m in corporation tax against Tesco with 28bn in sales and 1.9bn in corporation tax.
Capiche? Not fair.
Tax Warehouse-based companies the same as shop based ones, not far less.
Lots of UK companies do not make a profit, so pay no corporation tax.
Maybe if the uk adopted lower taxes people would onshore to here.
My prediction,
As a lot of people hold great store in property ownership in this country I think the government will pass more powers to local authorities to raise local taxes through re-banded and raised council tax hitting the higher bands harder. I think in general, people with expensive properties are wealthier and can afford an uplift in rates and the middle and lower will only get a modest increase. So the majority would take it on the chin and possibly not alienate the majority of the electorate.
It's a fact that the older generation have generally done well out of house price rises over the decades and have a lot of unearned wealth, which has enabled an easier climb up the property ladder into higher prices properties. I think the government are aware of this and could tap into some of this wealth through council tax.
I should say that I am in this group and wouldn't feel.too hard done to it that was the case provided that it was controlled and spent wisely by the local council, which is a whole debate on its own. This could possibly create more public sector jobs which would allow the recycling of taxes into the system locally or otherwise, and would be better than the alternative of the dole queue. We are going to have to pay This debt down in one way or another and better This than people losing their homes.
This would have to be overseen/capped by government obviously.
Also, after Mays failed dementia tax attempt raised the issue of funding adult and old age care I think the (any) government will be keen to start to address this growing problem and in the next few years is as good a time to tackle the future funding gap under the cover of covid recovery. Again through local taxation.
I agree with many that Rishi will have to be careful to keep tax increase in check in the short term so as not to stifle spending and growth but once we get back to some sort of normality in the economy he will have no choice but to raise revenue especially with the backdrop of Brexit.
As a lot of people hold great store in property ownership in this country I think the government will pass more powers to local authorities to raise local taxes through re-banded and raised council tax hitting the higher bands harder. I think in general, people with expensive properties are wealthier and can afford an uplift in rates and the middle and lower will only get a modest increase. So the majority would take it on the chin and possibly not alienate the majority of the electorate.
It's a fact that the older generation have generally done well out of house price rises over the decades and have a lot of unearned wealth, which has enabled an easier climb up the property ladder into higher prices properties. I think the government are aware of this and could tap into some of this wealth through council tax.
I should say that I am in this group and wouldn't feel.too hard done to it that was the case provided that it was controlled and spent wisely by the local council, which is a whole debate on its own. This could possibly create more public sector jobs which would allow the recycling of taxes into the system locally or otherwise, and would be better than the alternative of the dole queue. We are going to have to pay This debt down in one way or another and better This than people losing their homes.
This would have to be overseen/capped by government obviously.
Also, after Mays failed dementia tax attempt raised the issue of funding adult and old age care I think the (any) government will be keen to start to address this growing problem and in the next few years is as good a time to tackle the future funding gap under the cover of covid recovery. Again through local taxation.
I agree with many that Rishi will have to be careful to keep tax increase in check in the short term so as not to stifle spending and growth but once we get back to some sort of normality in the economy he will have no choice but to raise revenue especially with the backdrop of Brexit.
Gecko1978 said:
Fairley certian I said Amazon do pay tax, I did not say in the UK and why should they if UK profits are small and turn over is large. Its profit that matters and tax will be paid somewhere.
Maybe if the uk adopted lower taxes people would onshore to here.
Maybe if I'd not worked in this field (including taking meetings in Luxembourg with UK based multinationals, purely for tax reasons) I'd laugh less at this suggestion.Maybe if the uk adopted lower taxes people would onshore to here.
As long as you let multinationals take advantage of <1% corporation tax deals in places like that, there's no way they'll move any elective taxation to the UK.
It has to be forced on them.
Some people were asking what "fair" means. Tells you a lot about their outlook really.
CraigyMc said:
Maybe if I'd not worked in this field (including taking meetings in Luxembourg with UK based multinationals, purely for tax reasons) I'd laugh less at this suggestion.
As long as you let multinationals take advantage of <1% corporation tax deals in places like that, there's no way they'll move any elective taxation to the UK.
It has to be forced on them.
Some people were asking what "fair" means. Tells you a lot about their outlook really.
Amazon UK pay tax at the standard corporation tax rate.As long as you let multinationals take advantage of <1% corporation tax deals in places like that, there's no way they'll move any elective taxation to the UK.
It has to be forced on them.
Some people were asking what "fair" means. Tells you a lot about their outlook really.
What relevant 'field' have you worked in, that you don't understand that Corporation tax is paid on profit not on turnover?
98elise said:
Corporation tax is not a tax on sales/turnover. It's a tax on profits which is very different.
Lots of UK companies do not make a profit, so pay no corporation tax.
Amazon is however extremely profitable, with Jeff Bezos being the world's richest man because of it. $6.3 billion profit globally last year. Yet on paper, it makes hardly any profit in the UK. I wonder why ...Lots of UK companies do not make a profit, so pay no corporation tax.
PrinceRupert said:
Amazon is however extremely profitable, with Jeff Bezos being the world's richest man because of it. $6.3 billion profit globally last year. Yet on paper, it makes hardly any profit in the UK. I wonder why ...
Amazon US is certainly profitable.Perhaps you can provide the figures for Amazon UK to support your claims?
Edited by 992_GT3 on Monday 15th February 14:24
992_GT3 said:
What relevant 'field' have you worked in, that you don't understand that Corporation tax is paid on profit not on turnover?
Relevant field: IT procurement.You appear to be translating "not understanding" to "fully understanding".
Moving profits elsewhere so they can be taxed at virtually nil is exactly the issue at hand.
CraigyMc said:
Relevant field: IT procurement.
You appear to be translating "not understanding" to "fully understanding".
So why do you keep referring to tax as a percentage of Turnover? Isn't this the most basic of points?You appear to be translating "not understanding" to "fully understanding".
CraigyMc said:
Moving profits elsewhere so they can be taxed at virtually nil is exactly the issue at hand.
If they haven't made profits, how can they be moved?Edited by 992_GT3 on Monday 15th February 14:37
992_GT3 said:
CraigyMc said:
Relevant field: IT procurement.
You appear to be translating "not understanding" to "fully understanding".
So why do you keep referring to tax as a percentage of Turnover?You appear to be translating "not understanding" to "fully understanding".
The only percentage I actually mentioned anywhere was the rate of corporation tax some multinational companies pay in Luxembourg.
992_GT3 said:
CraigyMc said:
Moving profits elsewhere so they can be taxed at virtually nil is exactly the issue at hand.
If they haven't made profits, how can they be moved?How does the mechanism work?
There are plenty of ways of making a profit-making company in the UK look like it's making no (or limited) profits.
A typical way is for the local UK company to "buy R&D" or "pay services" fees to a company in a low tax jurisdiction.
Eg. Amazon UK Services pays Amazon EU SaRL (luxembourg) to run its website and hosting services.
Amazon Eu SARL charges -surpise surprise- just about the right amount of money to wipe out Amazon UK's profits.
Amazon Eu SARL then pays the Luxembour tax authorities a tiny fraction of that because -surprise surprise- they have a deal with the Luxembourgish.
Luxembourg gets to keep a tiny fraction of a big number for practically no effort.
Amazon Luxemboug gets to send that lovely dough to Amazon US.
Amazon UK pays virtually no tax.
Everyone wins except the UK state.
Substitute IP rights for web hosting or whatever else you fancy. Add in repeated timed loans between companies that all ultimately have the same ownership.
It being legal is a matter of the law as it stands today. It's not fair or right.
This isn't news. It needs fixing.
The suggestion that Amazon made no profit in the UK is laughable. It'll make more than $20bn in profit globally this FY. And practically none in the UK? hahahahahahaha
Edited by CraigyMc on Monday 15th February 14:53
CraigyMc said:
The suggestion that Amazon made no profit in the UK is laughable. It'll make more than $20bn in profit globally this FY. And practically none in the UK? hahahahahahaha
ha ha haWhy did you compare corporation tax to turnover?
What profit did Amazon UK make last year?
You seem not to be able to back up your claims?
992_GT3 said:
CraigyMc said:
The suggestion that Amazon made no profit in the UK is laughable. It'll make more than $20bn in profit globally this FY. And practically none in the UK? hahahahahahaha
ha ha haWhy did you compare corporation tax to turnover?
What profit did Amazon UK make last year?
You seem not to be able to back up your claims?
I see.You suggest Amazon make no profit in the UK.
Your opinion of this is... worthless.
According to the FT we need an excess profit tax of 50% of profits over a three year rolling average.
Businesses were to pay tax on a rise in profits more than £200 (£14,189 in 2020) above the average they achieved in two of three years between 1911-13. Alternatively, they could pay tax on profits that were more than £200 above a 6 per cent return on capital employed as of August 1914. These ‘excess profits’ were to be taxed at 50 per cent. The level fluctuated over the course of the war and it was designed to expire in 1922.
https://www.ft.com/content/0179860f-818f-42b3-9ac6...
In the best traditions, given that this would not affect me, I am not sure that I would care...
Businesses were to pay tax on a rise in profits more than £200 (£14,189 in 2020) above the average they achieved in two of three years between 1911-13. Alternatively, they could pay tax on profits that were more than £200 above a 6 per cent return on capital employed as of August 1914. These ‘excess profits’ were to be taxed at 50 per cent. The level fluctuated over the course of the war and it was designed to expire in 1922.
https://www.ft.com/content/0179860f-818f-42b3-9ac6...
In the best traditions, given that this would not affect me, I am not sure that I would care...
elanfan said:
I have personal knowledge of several friends who are self employed and they pay virtually no tax as their accountants somehow manage arrange it so. How about the self employed start paying their fair share would be a start!
A lot of self employed people do the following.Pay themselves £12,500 PAYE. On this they pay no tax, small sum in NI.
Then take divi at 7.5% tax up to the basic rate limit.
Which is fine and dandy and leaves them with a personal tax bill of lets say a couple of grand for £40k income. Noiiiice.
BUT.
The bit these people forget to tell you is that they have to pay corporation tax at 19% on the profits for the divis. So lets say they made 30k profit and took as their divi they (their LTD) have to pay £5700 in tax.
So, 5700+2000 is £7700 in tax on lets say 40k income for round numbers. The same PAYE job on £40k a year you lose c.9k in deductions for tax and NI. So a grand total difference of £1300.
Another BUT.
The LTD guy has to pay his accountant to do his tax returns (ct and sa).
The LTD guy gets no free money via pension top up from his employer.
The LTD guy gets no pension tax credits (on payments from his LTD)
The LTD guy gets no paid holidays.
The LTD guy gets no sick pay.
Is it worth it...
Unless you are running a company thats making massive profits there really is not any major difference. If you are making larger profits then yes, you can stick £40k into a SIPP, pay yourself £50k. So total "income" of £90k but once you go over that the tax rates start to bite. So it can be a rock and hard place situation.
Honestly, having been self employed since 2003 the golden days of paying limited taxes are long gone.
992_GT3 said:
CraigyMc said:
I see.You suggest Amazon make no profit in the UK.
CraigyMc said:
Your opinion of this is... worthless.
Given that you seem to believe that tax is payable on turnover.....Multinationals offshoring profit to avoid taxes cannot continue indefinitely.
A good start would be the publication of the actual economic activity Amazon carries out in the UK. It exists. HMRC may already have it, confidentially.
CraigyMc said:
Not "is" payable. "Should be" payable. See how the former is how it is now, and the latter is how it should be?
Multinationals offshoring profit to avoid taxes cannot continue indefinitely.
A good start would be the publication of the actual economic activity Amazon carries out in the UK. It exists. HMRC may already have it, confidentially.
No other business pays tax on Turnover, hence it's a nonsense comparison.Multinationals offshoring profit to avoid taxes cannot continue indefinitely.
A good start would be the publication of the actual economic activity Amazon carries out in the UK. It exists. HMRC may already have it, confidentially.
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