The trial of Team47b (Tax evasion)

pinno

So, the Chancelor has plans to cut out some of the loopholes of tax evasion with an impending bill. Those non-Doms and those Coys that are evading tax by shifting their head office to Lithuania, but how far will it go ?
Will it actually deliver what it promises or is it a method of keeping the electorate happy with a namby pamby bill that doesn't really cut the mustard ?

jrduquemin

The latter probably....

tiredofwhiners

It won't do much until he can persuade the rest of the EU to do away with fre trade agreements which in effect, allow a country HQ in one place to do business with the rest of Europe.

It didn't start out as a free trade area by accident.

Saw the usual whinging article about Amazon in the paper today.

You buy from a website in a foreign country, owned by a foreign company, and you pay on a credit card whose offices are overseas, on a clearing system also overseas. The goods are made in a foreign country, and are shipped to the UK by a foreign courier, until they arrive in the UK, when the Royal mail or equivalent, delivers them. They might stay in a storage unit in the UK for a couple of days before delivery and the staff are paid in the UK, pay taxes, the warehouse pays taxes, and the company pays NI.

So no, Amazon is not a UK company and doesn't pay much in the way of taxes. If they wanted to be awkward, they could pull out of the UK, close down the distributions centre, and move it to Calais, and post the good from there, and they won't have a Uk company.

But nobody will stop buying from them will they ?

team47b

Avoidance not evasion :roll:

It's tax avoidance your chancellor is wanting to clamp down on, evasion is illegal so doesn't need a bill.

I think you're right...
a method of keeping the electorate happy with a namby pamby bill that doesn't really cut the mustard

There are about 100 new 'aggressive' tax avoidance schemes declared every year so they are gonna be busy if they want to actually make a difference!

pinno

tiredofwhiners wrote:

So no, Amazon is not a UK company and doesn't pay much in the way of taxes. If they wanted to be awkward, they could pull out of the UK, close down the distributions centre, and move it to Calais, and post the good from there, and they won't have a Uk company.

But nobody will stop buying from them will they ?

Why not (sounds over simplistic but stll):

Company A, based in Whereverville derives 25% of its hypothetical income of x million from the UK. Tax them on that 25%. ? PAYE if you like ?
Probably difficult to construct but if you turned around to Boots (Alliance Group) who have shifted their head office to Switzerland and said - "You owe us y amount in corporate tax, pay it or else". There is no way they would say we aren't going to. In any event, if Boots folded (by a very long stretch of the imagination) as a direct result, the void would be filled very quickly.

daviesee

pinarello001 wrote:

Why not (sounds over simplistic but stll):

Company A, based in Whereverville derives 25% of its hypothetical income of x million from the UK. Tax them on that 25%. ? PAYE if you like ?
Probably difficult to construct but if you turned around to Boots (Alliance Group) who have shifted their head office to Switzerland and said - "You owe us y amount in corporate tax, pay it or else". There is no way they would say we aren't going to. In any event, if Boots folded (by a very long stretch of the imagination) as a direct result, the void would be filled very quickly.

Immediate response from Boots - Else what?

tiredofwhiners

pinarello001 wrote:

Company A, based in Whereverville derives 25% of its hypothetical income of x million from the UK. Tax them on that 25%. ? PAYE if you like ?

They already collect VAT for HMG. If you try and open up those gates, the same will happen to every Uk company who does business overseas and they will go out of business.

You still don't seem to recognise that although YOU are in the UK, no part of the company you actually order from, is. Its no different than calling up a US bike manufacturer on the phone, buying a bike and having it shipped to you in the UK. Then you think the US company should be paying UK taxes ?

Everyone would like to be the only country which collects taxes from foreign companies shipping things to the UK but blithely ignore the effect on our exports when other countries start taxing UK companies for accepting orders from their citizens and our companies can no longer afford to export.

pinno

tiredofwhiners wrote:

pinarello001 wrote:

Company A, based in Whereverville derives 25% of its hypothetical income of x million from the UK. Tax them on that 25%. ? PAYE if you like ?

Everyone would like to be the only country which collects taxes from foreign companies shipping things to the UK but blithely ignore the effect on our exports when other countries start taxing UK companies for accepting orders from their citizens and our companies can no longer afford to export.

Yeah, point taken. Why not have blanket taxation in the EU that would nulify any reason to shift your head office and:

Shouldn't we slap a 20% import duty on non perishable, non EU goods* ? That would A) Stimulate the economies within the EU by Making cheepie Chinese junk et al not worth buying.

*I say 'perishable' 'cos I do like my Colombian coffee and we still have to suport the old colonial banana economies (which would incl. Holland, Portugal, the Banana guzzling Germans, Portugal Spain, France etc).

tiredofwhiners

pinarello001 wrote:

Yeah, point taken. Why not have blanket taxation in the EU that would nulify any reason to shift your head office and:

Beacuse that would be a step too far for just about every country in the Eurozone. that tax harmonisation and it involves giving up the right for governments to set their own taxation regimes - one step away from a single government in Europe.

pinarello001 wrote:

Shouldn't we slap a 20% import duty on non perishable, non EU goods* ? That would A) Stimulate the economies within the EU by Making cheepie Chinese junk et al not worth buying.

*I say 'perishable' 'cos I do like my Colombian coffee and we still have to suport the old colonial banana economies (which would incl. Holland, Portugal, the Banana guzzling Germans, Portugal Spain, France etc).

Two basic reasons why not.

1. Its against WTO rules and you'd end up with retaliatory measures against your little 'safe' zone.
2. If you do it, you quickly find that the protected industries become even less efficient, even more burdensome and inefficient and quickly become a public sector entity with all the world leading abilities of British Leyland, British Steel, Rolls Royce (before privatisation) and a whole host of other walking dead organisations. Before you know it, you have a massively subsidised public sector company which needs to be put out of its misery. Think of British Rail pre-breakup, but without the charm. Protectionist masures simply don't work in the long term. Look at the mess France is in with its collapsing car industry, 56% of its people in the public sector and massive debt. And the locals still don't buy enough French cars - they like UK made Japanse ones or German ones.

Cheap Chinese junk is cheapo because thats all its worth - nobody will buy a £1 piece of junk for £10 if its made in the UK, and if people expect not to be paid chines wages, then the junk has to be subsidised by central taxation.

tiredofwhiners

tiredofwhiners wrote:

pinarello001 wrote:

Yeah, point taken. Why not have blanket taxation in the EU that would nulify any reason to shift your head office and:

Because that would be a step too far for just about every country in the Eurozone. That is tax harmonisation and it involves giving up the right for governments to set their own taxation regimes - one step away from a single government in Europe. This has been shouted down by every government in the past. Nobody except France is for that and thats because France expects to be in charge of everyone else.

pinarello001 wrote:

Shouldn't we slap a 20% import duty on non perishable, non EU goods* ? That would A) Stimulate the economies within the EU by Making cheepie Chinese junk et al not worth buying.

*I say 'perishable' 'cos I do like my Colombian coffee and we still have to suport the old colonial banana economies (which would incl. Holland, Portugal, the Banana guzzling Germans, Portugal Spain, France etc).

Two basic reasons why not.

1. Its against WTO rules and you'd end up with retaliatory measures against your little 'safe' zone.
2. If you do it, you quickly find that the protected industries become even less efficient, even more burdensome and inefficient and quickly become a public sector entity with all the world leading abilities of British Leyland, British Steel, Rolls Royce (before privatisation) and a whole host of other walking dead organisations. Before you know it, you have a massively subsidised public sector company which needs to be put out of its misery. Think of British Rail pre-breakup, but without the charm. Protectionist masures simply don't work in the long term. Look at the mess France is in with its collapsing car industry, 56% of its people in the public sector and massive debt. And the locals still don't buy enough French cars - they like UK made Japanse ones or German ones.

Cheap Chinese junk is cheapo because thats all its worth - nobody will buy a £1 piece of junk for £10 if its made in the UK, and if people expect not to be paid chines wages, then the junk has to be subsidised by central taxation.

pinno

tiredofwhiners wrote:

tiredofwhiners wrote:

pinarello001 wrote:

Yeah, point taken. Why not have blanket taxation in the EU that would nulify any reason to shift your head office and:

pinarello001 wrote:

Two basic reasons why not.
taxation.

Bollox. Why don't you post something less sensible which is going to cheer me up ?

tiredofwhiners

Well I could but if you persist with getting your knowledge of how the world works, from the Guardian newspaper, you'll end up disappointed for most of your life

Frank the tank

I'm sure IF THEY REALL,REALLY WANTED TO any British government could come up with a way of closing said loopholes. Afterall they're clever enough to keep thinking of ways of taxing the masses.

Psssst, (whisper) thing is they don't want to. Members of government tend to be pretty wealthy it'd be like turkeys voting for christmas.

tiredofwhiners

Frank the tank wrote:

I'm sure IF THEY REALL,REALLY WANTED TO any British government could come up with a way of closing said loopholes. Afterall they're clever enough to keep thinking of ways of taxing the masses.

There are no loopholes and thats the bit the thickys out there miss every time - its called being in a free trade area and its designed to be that way. Its not an accident. Its not a loophole. Any attempt to stop what you call a loophole will have the simple effect of every other country retaliating by applying taxes to our exports and we lose out big time. This happened in the US if I recall when the US applied rules for steel imports so the other countries applied tariffs on things the US wanted to export and after a few months, the US steel industry was being out lobbied by several industries who didn't like losing out, just to protect the dying steel industry.

All actions have consequences and thats the bit the Guardian readership try really hard to ignore. Read up above how stopping the Amazon 'loophole' would cost thousands of jobs and result in higher prices, and mass disobedience. You simply cannot live in a free trade zone and expect people not to trade freely across borders. And that includes trading in taxation.

Frank the tank

Whether they're genuine loopholes or intentional part of legislation IMHO paying the correct amount of tax beit corporation or whatever should be paid. If it is as you say, then the government should "come clean" and let the masses deciede if they think it's a fair way for the free market to carry on.

pinno

tiredofwhiners wrote:

Well I could but if you persist with getting your knowledge of how the world works, from the Guardian newspaper, you'll end up disappointed for most of your life

That a bit out of order.

The fact is Amazon paid 1.8m in tax on profits of 350m from its activities in the UK for example. Thats wrong and just to say in more convaluted terms that 'that is the way the world and free trade areas work' is flippant. The OP is about finding a way of trying to seal up tax loop holes which are unfair on the rest of us who bear the burden of ecomonic downturn and cuts.
The way the world works has been unequal and the booms and busts have led to the most catastrophic of busts of what we discovered to be a pack of cards. The current (global) economic set up is skewed and irregular. What we need is a fundamental change in its mechanics, Guardian reader or not.
So as Frankie Tankie said, the correct level of taxation needs to be paid and I say that if there was a will, there would be a way. The fact is, there is not a way because there is no will.

tiredofwhiners

Frank the tank wrote:

Whether they're genuine loopholes or intentional part of legislation IMHO paying the correct amount of tax beit corporation or whatever should be paid. If it is as you say, then the government should "come clean" and let the masses deciede if they think it's a fair way for the free market to carry on.

Try reading this bit again from higher up.

"You buy from a website in a foreign country, owned by a foreign company, and you pay on a credit card whose offices are overseas, on a clearing system also overseas. The goods are made in a foreign country, and are shipped to the UK by a foreign courier, until they arrive in the UK, when the Royal mail or equivalent, delivers them. They might stay in a storage unit in the UK for a couple of days before delivery and the staff are paid in the UK, pay taxes, the warehouse pays taxes, and the company pays NI.

So no, Amazon is not a UK company and doesn't pay much in the way of taxes. If they wanted to be awkward, they could pull out of the UK, close down the distributions centre, and move it to Calais, and post the good from there, and they won't have a Uk company."

You don't get to vote on each and every decision that governments make - thats how the entire world works. You get to vote on who you want to lead the country. The government has been very clear about what the tax rules are and people have been very very very happy to reap the rewards of cheap goods whether its books, DVD's, coffee or cheap advertising available in the UK.

The correct amount of tax has been paid. If you don;t like it then try getting elected on a message of higher taxes for the country and higher unemployment as every international company pulls a large part of its business out of the country.

Stevo_666

pinarello001 wrote:

Why not (sounds over simplistic but stll):

Company A, based in Whereverville derives 25% of its hypothetical income of x million from the UK. Tax them on that 25%. ? PAYE if you like ?

It goes against the principle of freedom to trade where you want to trade just a little bit doesn't it? And when the taxman in Whereville also wants his slice of tax on that sale because Company A is based there and pays taxes there, company A ends up paying taxes on the same sale twice. Doesn't work and would kill export markets unless you set up a mechanism to credit one tax against another - in which case why bother in the first place?

pinarello001 wrote:

Probably difficult to construct but if you turned around to Boots (Alliance Group) who have shifted their head office to Switzerland and said - "You owe us y amount in corporate tax, pay it or else". There is no way they would say we aren't going to. In any event, if Boots folded (by a very long stretch of the imagination) as a direct result, the void would be filled very quickly.

The UK taxman has no legal right to tax a Swiss company. But the profits from trading in the UK are taxed here becasue Boots has one (or more) UK companies. Companies move to Switzerland for reasons more complex than that - usually to do with the the UK taxman wanting a cut of tax on profits earned abroad rather than what's earned in the UK.

Frank the tank

tiredofwhiners wrote:

Frank the tank wrote:

Whether they're genuine loopholes or intentional part of legislation IMHO paying the correct amount of tax beit corporation or whatever should be paid. If it is as you say, then the government should "come clean" and let the masses deciede if they think it's a fair way for the free market to carry on.

Try reading this bit again from higher up.

"You buy from a website in a foreign country, owned by a foreign company, and you pay on a credit card whose offices are overseas, on a clearing system also overseas. The goods are made in a foreign country, and are shipped to the UK by a foreign courier, until they arrive in the UK, when the Royal mail or equivalent, delivers them. They might stay in a storage unit in the UK for a couple of days before delivery and the staff are paid in the UK, pay taxes, the warehouse pays taxes, and the company pays NI.

So no, Amazon is not a UK company and doesn't pay much in the way of taxes. If they wanted to be awkward, they could pull out of the UK, close down the distributions centre, and move it to Calais, and post the good from there, and they won't have a Uk company."

You don't get to vote on each and every decision that governments make - thats how the entire world works. You get to vote on who you want to lead the country. The government has been very clear about what the tax rules are and people have been very very very happy to reap the rewards of cheap goods whether its books, DVD's, coffee or cheap advertising available in the UK.

The correct amount of tax has been paid. If you don;t like it then try getting elected on a message of higher taxes for the country and higher unemployment as every international company pulls a large part of its business out of the country.

Excuse me, who says I buy off web sites?

tiredofwhiners

Frank the tank wrote:

Excuse me, who says I buy off web sites?

Nobody, but it illustrates why your naive view of how the world works is inaccurate. Expecting to be personally consulted on a decision shows you need to keep taking the medication.

Frank the tank

YOU INFERED I DID.

You know fcuk all about me other than my views differ from yours.

pinno

tiredofwhiners wrote:

Frank the tank wrote:

Excuse me, who says I buy off web sites?

Nobody, but it illustrates why your naive view of how the world works is inaccurate. Expecting to be personally consulted on a decision shows you need to keep taking the medication.

When you resort to personal comments, that means that you have lost the argument - Tory tosser !

Anyways Tiredofwhining, answer this:

A) Do you think that tax avoidance by (corporations) is ethical in the current ecomomic climate ?
Do you think the current trend of moving your head office just simply to pay less corporate tax is right in any form ?
C) What would you do to close the loopholes smarty pants bum llicker ?

tiredofwhiners

A Yes, because its legal, If you don't like it, then change the law and take the unintended consequences, but don't expect companies to do what they think you mean. They follow the rules, nothing more..
B.Yes, because it encourages governments to be more efficient through having to do more with less tax.
C. I wouldn't because they are not loopholes, They are a consequence of being in a free trade area which has many many many more upsides.

What I would do is remove the vote from anyone who is unable to actually understand how the world works and that effect follows cause. Personal comments are sometimes necessary to remind the intellectually challenged that just because they are a single voter doesn't mean the world revolves around their desires, and to suggest to Frank that he should get a dose of reality. His opinions mean no more or less than mine and suggesting that a vote is required, just because he personally disagrees with something 'is more than a tad naive'.

Parasitic socialist who has realised that they have spent all the money and got nothing for it

tiredofwhiners

Deleted

Frank the tank

So you believe it is right corporations are able to avoid tax because it's allowed by law.

I suppose you would also agree with slavery if it was allowed by law then.

Just because something is legal doesn't make it morally right and I feel this is where the mis-understanding is coming from. I believe we (individuals/corporations) should pay our dues. You seem to believe as long as it's legal it is ok to avoid tax, even if it means the cleaner pays more tax %age wise than a CEO.

I don't really give a chuff about you or your views but I believe morally I'm right, legallity has fcuk all to do with it.

Stevo_666

Frank the tank wrote:

So you believe it is right corporations are able to avoid tax because it's allowed by law.

I suppose you would also agree with slavery if it was allowed by law then.

Just because something is legal doesn't make it morally right and I feel this is where the mis-understanding is coming from. I believe we (individuals/corporations) should pay our dues. You seem to believe as long as it's legal it is ok to avoid tax, even if it means the cleaner pays more tax %age wise than a CEO.

I don't really give a chuff about you or your views but I believe morally I'm right, legallity has fcuk all to do with it.

At the risk of getting 'lawyerish' on you, there is case law in England that makes it pretty clear that tax avoidance is not immoral, as well as not illegal. Here's an extract from the case that established an important principle that most people don't know and the Inland Revenue would rather forget as they try their best to tax the living shyte out of anything that moves.

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
James Avon Clyde; Ayrshire Pullman Motor Services v Inland Revenue

The language is a bit lar-de-dar but hopefully that clears up the misunderstanding

As far as I'm concerned the line between moral and immoral when it comes to tax is the line between avoidance and evasion.

Frank the tank

So in a nutshell, it's a game.

pb21

tiredofwhiners wrote:

What I would do is remove the vote from anyone who is unable to actually understand how the world works and that effect follows cause.

Presumably you understand how the world works and only people who agree with what you say and think should be able to vote, or are you just being facetious?

tiredofwhiners

Frank the tank wrote:

So you believe it is right corporations are able to avoid tax because it's allowed by law.

I expect them to follow the law and no more and no less. By your rules, you personally are a tax avoider as you don't give HMRC more than you are expected to pay. You pay tax in line with the law exactly as everyone else - in other words, you are a hypocrite as you attack companies for doing exactly what you do - pay your legally required taxes and not a penny more. Your brain clearly doesn't work when you say that people avoid tax by following the law.

Frank the tank wrote:

I suppose you would also agree with slavery if it was allowed by law then.

Nice trolling attempt but pretty weak comparison. What I BELIEVE and what is legal are two entirely different things. Your hangup is that what you believe, you think is the law. I wouldn't believe in slavery even if its the law. Your hangup is that you are unable to accept that people can believe in things despite the law.

Frank the tank wrote:

Just because something is legal doesn't make it morally right

Taxes are not based upon 'what is morally right'. If you want that kind of country, go live in Iran or Saudi Arabia and see how a local 'morally right' based legal system works. Or get the laws changed - and suffer the consequneces of your actions.

Frank the tank wrote:

I believe we (individuals/corporations) should pay our dues. You seem to believe as long as it's legal it is ok to avoid tax, even if it means the cleaner pays more tax %age wise than a CEO.

Of course, I prefer a country where we have clear laws, not arbitrary judgemental decisions based around what people think 'is right'. If I were in charge for example, I would think it was morally right that you not be allowed to vote for example, as you live in a dream world where only you are right. You wouldn't want that kind of country and nor would I, but you seem spectacularly naive to think that a legal system based around people doing what their 'morals' tell them rather than the law is a good thing. Just imagine if you were a believer in no abortion under any circumstances - that would mean someone who believed you were 'morally wrong' could be killed. Thats the way to anarchy.

Frank the tank wrote:

I don't really give a chuff about you or your views but I believe morally I'm right, legallity has fcuk all to do with it.

And that is why you should not be allowed to vote. You're the sort of moron who thinks you can run a country without laws but based upon 'morals'.

pliptrot

The bottom line: free trade, as enshrined by law and WTO regulations, has resulted in a race to the bottom for those who don't own capital - if you support free trade, and have to work for a living, then expect to be paid the same as the Chinese, or worse.
Different tax rates, as are the whole point of this thread, have resulted in the distortions we are unhappy about (at least I hope we are). The EU will -in due course- have common tax rates which will negate any and all of these shenanigans. But the current anti-German sentiment washing across Europe (and UKIP and all the other xenophobes) is only slowing the process of economic evolution down. If you accept that the people exist as tools of capital, then you support what we have now, and it will get worse - far worse - until we make capital the tool of the people. If you're now thinking that sounds like dangerous Trotsky rhetoric, you may understand how far things have to improve before the world is fit for all to inhabit. And yes, if you are making clear distinctions between morality and legality, you've lost the plot - one underpins and follows the other. To decry those who suggest so makes you a nasty cynic.

rick_chasey

Stevo 666 wrote:

Frank the tank wrote:

So you believe it is right corporations are able to avoid tax because it's allowed by law.

I suppose you would also agree with slavery if it was allowed by law then.

Just because something is legal doesn't make it morally right and I feel this is where the mis-understanding is coming from. I believe we (individuals/corporations) should pay our dues. You seem to believe as long as it's legal it is ok to avoid tax, even if it means the cleaner pays more tax %age wise than a CEO.

I don't really give a chuff about you or your views but I believe morally I'm right, legallity has fcuk all to do with it.

At the risk of getting 'lawyerish' on you, there is case law in England that makes it pretty clear that tax avoidance is not immoral, as well as not illegal. Here's an extract from the case that established an important principle that most people don't know and the Inland Revenue would rather forget as they try their best to tax the living shyte out of anything that moves.

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
James Avon Clyde; Ayrshire Pullman Motor Services v Inland Revenue

The language is a bit lar-de-dar but hopefully that clears up the misunderstanding

As far as I'm concerned the line between moral and immoral when it comes to tax is the line between avoidance and evasion.

Either way, it gives a significant advantage to multinational firms over local rivals, since only the multinational has the resources and the settup necessary to be able to capitalise on said laws.

In an ideal world with ' fair competition' which surely all free-marketeers want, that wouldn't be the case, right?

Take 2 coffe shops on the high street. One has 4 shops across the UK, one is Starbucks. Now, on said high street, both shops function in the same way - only Starbucks pays an awful lot less tax. Now, on this high-street, the competition is no longer fair. It distorts the market and reduces choice for consumers.

The consumer benefits from fair compeition. In this, practical respect, it is not fair. It may be fair with regard to the law, but it is not fair in the respect explained above.