hsbc

Stevo_666

VTech wrote:

That product is made in china.
That product usually ships to the UK.
Instead we ship it to Dubai.
Import duty is not paid to HMRC.
Items sold through the UK. Slight problem here - if the item is 'sold through the UK' then the transaction is taxable in the UK. I've said this before. So if you are claiming that you are not due any tax on this, you are wrong. If this is due to underpricing as I mentioned above when describing transfer pricing - this is at best tax avoidance. If it is due to non-declaration of the transaction/income in the UK, this is tax evasion.
No, because I could legally work as a broker and sell the item under brokerage in the UK for the company in Dubai and HMRC could not do anything about that. I have heard of someone in the UK doing exactly this and the Dubai company pay them a fee per sale and the person is taxed on that income and not the total sale amount even though this particular guy is actually the guy behind the product.
Items despatched from Dubai office to clients globally.
Charge made from UK to Dubai office for minimal salary of seller in UK.
Dubai office pay fee.
Accounts filed for minimum wage of UK seller.
No tax paid to HMRC.

OK, so we are back to my previous comments where I pointed out that in one of your scenarios, you are not actually selling the product.

Let's remind ourselves what you claimed:
"I can legally sell a product from the UK to the middle east or the USA and deposit the funds in Dubai and pay no UK tax.
I am not breaking the law doing this although IMO it is morally wrong. It becomes illegal if I spend the money here or try and get the cash here with no tax paid."

If you are a broker, you are like an estate agent - you are not selling your house, you a providing a service to help someone else sell their house. So in the situation you just described above, you are helping a foreign company/person not based in the UK sell goods and receiving a fee for it.

Of course you can operate like that, but it is not doing what you originally claimed - i.e. a UK resident selling goods on their own account from UK to Middle East without paying tax. You are just a service provider helping an overseas client make a sale.

As you say, you will be taxed in the UK for your brokerage services as you are a UK resident. And as you mention above, the 'particular guy is the guy behind the product'. So if this 'particular guy' also owns the foreign company that is selling the product, the brokerage fee needs to be at market rates for tax purposes (i.e. charge what you like but HMRC will tax you based on the market price). Also as mentioned, if the Dubai company fails the tax haven tests, you particular guy will receive a tax bill based on the profit of the Dubai Co. So all will be fine as long as The Inland Revenue don't find out

joenobody

VTech wrote:

Tomato tomato.
Not paying what you are expected is (to me) wrong. You should pay your % set out by law. Avoidance/evasion it doesn't matter, both are wrong.

The various dozens of companies that sit at the top of the financial profits tree in the UK that pay massively less than what should be due are breaking no laws, I accept that but the fact is it is wrong, if you or I have to pay, why shouldn't they ?

I'm no expert on this sort of thing, but looking at the 2 parts of your post that I've highlighted, you appear to be contradicting yourself. If companies doing this sort of thing are breaking no laws, then surely they're paying the % set out by law? If not then they'd be breaking the law, right?

What people (and I'm not suggesting this includes you) fail to understand is that it's not really the companies that pay this avoided tax, it's the employees (were it not avoided). I work for a company (not one you've listed) that uses similar schemes, and I'm payed quite well by them. If they didn't use these schemes then I've no doubt my salary, and those of my colleagues, would be lower.