Just Pay Your Tax::: God damn

Stevo_666

True.

The pattern is predictable. Someone moans about tax using a few keywords like 'multinational', 'avoidance' and 'loophole', which creates some sort of pavlovian response amongst a certain group of forum members and off they go

When challenged to produce evidence to support the original allegation, oddly enough they can produce none, so some of them try to divert from the fact that they have no case on the specific issue by trying to make it a broader philosphical debate :roll:

slowmart

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

Stevo_666

Slowmart wrote:

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

...and the search for evidence on the original point of the thread continues. You can start a new thread if you like

mamba80

Stevo 666 wrote:

Slowmart wrote:

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

...and the search for evidence on the original point of the thread continues. You can start a new thread if you like

wtf are you on about? they paid no corp tax, that isnt in dispute, that is what the OP posted and complained about.

whether what they did is moral, illegal or just good tax planning is irrelevant, the paid less tax than anticipated, which means someone on PAYE pays more, there are cuts in services or Gov borrowing goes up... or all 3....

Stevo_666

mamba80 wrote:

Stevo 666 wrote:

Slowmart wrote:

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

...and the search for evidence on the original point of the thread continues. You can start a new thread if you like

wtf are you on about? they paid no corp tax, that isnt in dispute, that is what the OP posted and complained about.

whether what they did is moral, illegal or just good tax planning is irrelevant, the paid less tax than anticipated, which means someone on PAYE pays more, there are cuts in services or Gov borrowing goes up... or all 3....

Still no evidence.

This thread also demonstrates the on going inability of some people to stick to the point. Below is a reminder for you of what everyone else has gone quiet on. I'll also repost below the reason why they paid less tax than someone who is ignorant of tax rules had anticipated, as you don't appear to have read or understood that either.

Stevo_666

Stevo 666 wrote:

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

This was the question that nobody has answered.

ballysmate

mamba80 wrote:

Stevo 666 wrote:

Slowmart wrote:

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

...and the search for evidence on the original point of the thread continues. You can start a new thread if you like

wtf are you on about? they paid no corp tax, that isnt in dispute, that is what the OP posted and complained about.

whether what they did is moral, illegal or just good tax planning is irrelevant, the paid less tax than anticipated, which means someone on PAYE pays more, there are cuts in services or Gov borrowing goes up... or all 3....

wtf indeed!

What the OP actually said was

Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...

Stevo, who may have mentioned a few times :roll: , is expert in this field. He asked for evidence of how it was dodgy and which loopholes were jumped through.....He is still waiting btw.

Less tax than anticipated? 'Less tax than the OP thought they should pay' is probably a more accurate phrase.

Stevo_666

Stevo 666 wrote:

Ballysmate wrote:

RideOnTime wrote:

Stevo 666 wrote:

Stevo 666 wrote:

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

No evidence or facts then.....?

http://finance.yahoo.com/news/mondelez- ... 00314.html

http://www.birminghammail.co.uk/news/bu ... t-12036547

I will defer to my tax expert associate who I am sure will be along shortly but from the Birmingam Mail article, the phrase that jumps out is


The figures are revealed in newly filed accounts and, based on the standard tax rate, Mondelez UK should have paid around £36 million in corporation tax.

It is reported that the company avoided paying corporation tax by using legal accountancy techniques including a one-off gain of £42 million related to the sale of its coffee business which was exempt from tax.

Any wrongdoing there? :?

Indeed Bally, no wrongdoing. If a UK company sells the shares of a subsidiary and that subsidiary is an active business, the gain on sale is tax free. The exemption from tax on sale of a business is by operation of law - there is no planning here, it is simply a question of fact. As the article mentions the sale of a coffee business, perfectly reasonable to assume it is an active business that was sold. This reduces the effective rate of tax seen in the accounts because there is an accounting gain but no tax on the gain.

If they had made a loss on sale of that business, there would be no tax relief and the accounts would then look like they had paid too much tax. Although you never see lefties praising companies whose accounts look like that, even if it is for the wrong reason

Other links also mention that Mondelez has invested approx £200m in the UK over the last 5 years. Mondelez is primarily a food manufacturer. Assuming that a reasonable proportion of that investment is invested in certain types of assets or R&D, these can generate tax deductions that exceed the accounting P&L cost - again this would reduce the effective rate of tax seen in the accounts.

Measuring whether a company has paid 'enough' tax based on taking their accounting profit and multiplying by the tax rate is a very crude tool and almost always wrong for reasons like those above. This unfortunately is what happens when people combine a misplaced sense of indignance on tax with a lack of knowledge of how tax works.

So I'm really not clear on what basis the OP is saying "Now we have Mondelez International....jumping every loophole so Cadbury (in the UK) pay no corporation tax..."?

But I can see why the local MP was happy about "how wonderful they are investing in the local economy." when they have invested £200m in the last 5 years in the UK.

And let's not forget all the income tax, NIC, VAT, business rates etc etc that Mondelez will be contributing to the UK coffers.

And here is my explanation (based on the available facts) as to why they paid less tax than some random person anticipated.

Now mamba, can you produce some evidence to the contrary? You get bonus marks for sticking to the point

mamba80

Buddy, its not relevant.... are you saying they paid the full rate of UK corp tax ?

this article shows that there has been a H of C inquiry and they found that they d been using an off shore debt to off set their tax bill, all legal of course but thats not the point and one you seem unable to comprehend.

https://www.theguardian.com/business/20 ... -last-year

no Bally, my rate of tax is set in stone and i cannot lower it, corp tax is 20% - so the exchequer expects to collect £xyz billions (within a range, subject to profit) if companies use loopholes (which i agree are not illegal) than the tax take is down on what is expected......

Stevo_666

mamba80 wrote:

Buddy, its not relevant.... are you saying they paid the full rate of UK corp tax ?

this article shows that there has been a H of C inquiry and they found that they d been using an off shore debt to off set their tax bill, all legal of course but thats not the point and one you seem unable to comprehend.

https://www.theguardian.com/business/20 ... -last-year

no Bally, my rate of tax is set in stone and i cannot lower it, corp tax is 20% - so the exchequer expects to collect £xyz billions (within a range, subject to profit) if companies use loopholes (which i agree are not illegal) than the tax take is down on what is expected......

At least you tried to look for something. However you stil, don't get it.

The bond is simply debt which appears to be owed to external parties as it is listed on an exchange. Debt owed to external parties is not shifting profits elsewhere in te Mondelez group. Companies always have been free to choose their balance of funding between equity, debt and other sources. There are limits on the amount of tax deduction available for debt that are set out in tax law and there is no suggestion here that they have exceeded those limits. So this is not just perfectly legitimate, but as the law intended.

The Guardian has done its best to write a piece that looks as if Mondelez have done wrong but on closer inspection they have failed.

As mentioned above, there are other factors such as the perfectly benign tax free disposal and most likely significant capital allowances.

This is before we consider all of the other taxes thay pay (remember, corporate tax is only 8% of total tax revenues).

Stevo_666

mamba80 wrote:

Buddy, its not relevant.... are you saying they paid the full rate of UK corp tax ?

no Bally, my rate of tax is set in stone and i cannot lower it, corp tax is 20% - so the exchequer expects to collect £xyz billions (within a range, subject to profit) if companies use loopholes (which i agree are not illegal) than the tax take is down on what is expected......

Just to clarify, they have paid the full rate of tax on all taxable profits.

Your tax is not set in stone. Mine isn't and I am on PAYE. Have you never made an additional pension contribution, sold shares, or invested in an enterprise investment scheme, for example?

Nor are companies tax bills set in stone. Anyone who thinks that if a company makes an accounting profit of x, they should simply pay corporate tax of 20% of x really hasn't got a clue about tax. Not sure I would have much of a career if my main task was to multiply numbers by 0.2

slowmart

Stevo 666 wrote:

Slowmart wrote:

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

...and the search for evidence on the original point of the thread continues. You can start a new thread if you like

The Cadbury acquisition used £8.2 billion of debt and the interest on that amount alone negates any corporation tax. The £200 million investment would also negate or mitigate any corporation tax but that headline doesn't sell papers or drive visits to online content.

The biggest arse I have about corporation tax is it leaves your account immeadiatley once you've paid in by cheque at the bank.

Stevo_666

Slowmart wrote:

Stevo 666 wrote:

Slowmart wrote:

But my cat has more social utility than your profession ;-)

A more accessible response could be

Q. How many people pay tax on income used for mortgage payments ?

So why should a company borrow money to fund material expansion, and then pay tax on the repayments ?

...and the search for evidence on the original point of the thread continues. You can start a new thread if you like

The Cadbury acquisition used £8.2 billion of debt and the interest on that amount alone negates any corporation tax. The £200 million investment would also negate or mitigate any corporation tax but that headline doesn't sell papers or drive visits to online content.

The biggest ars* I have about corporation tax is it leaves your account immeadiatley once you've paid in by cheque at the bank.

The debt was almost certainly related to the Cadbury acquisition, so it was for a genuine commercial purpose.

The other relevant pont here is that the interest charge will be included in arriving at the accounting profit - and Mondelez was still profit making for the relevant period., even excluding the one off capital gain. So capital allowances on the £200m investment are a likely cause of the remainder of the difference between accounting and taxable profits here.

mamba80

So, a company in the UK gets into debt, it then moves that debt to another jurisdiction, it then makes a profit in the UK BUT because the debt is bigger than the profit pays no corp tax? is that it? in a nut shell.

its great pity i could nt do that with my flat (a while back) when i was in negative equity........ or my cash for cars monthly payment didnt cover the cost of a new gearbox for my car which i then only had for work related business, would have, as a PAYE been fantastic to have been able to offset my tax bill against these loses.

oh as i work for only one employer, going self employed isnt an option before you suggest that.

Stevo_666

mamba80 wrote:

So, a company in the UK gets into debt, it then moves that debt to another jurisdiction, it then makes a profit in the UK BUT because the debt is bigger than the profit pays no corp tax? is that it? in a nut shell.

No.

1. As the debt in external it is irrelevant to this debate whether the third party lender is UK or overseas. In any event, the bond is only registered on an overseas exchange - this has no connection with who owns the bond/is the lender (it is a bit like saying that because a company is listed on say the NY stock exchange, the shareholders are all Amercican - i.e. incorrect).

2. The interest on the debt is not larger than the UK profit. This is because the UK accounting profit number is stated after deducting the interest cost - as I mentioned above. There is no difference here between the accounting and tax treatment of the interest. (PS it is the interest on the debt that is relevant not the debt itself).

3. The debt was incurred deliberately to fund an acquisition. This I perfectly normal for a number of commercial and treasury reasons.

The reasons why Mondelez paid no corporate tax in that period is partly due to the tax free gain on sale of a business (simple exemption as intended by law, as previously explained) and very likely the capital allowances on the £200m investment where the tax allowances exceed the accounting depreciation charge (again, no planning, just a simple application of tax law to particular categories of expenditure).

It is important to understand that there is often a large difference between accounting profit and taxable profit - as intended by tax law, there are differences in the treatment of numerous items of income and expenditure. And it can go either way.

Still no case to answer for Mondelez here.

Stevo_666

mamba80 wrote:

its great pity i could nt do that with my flat (a while back) when i was in negative equity........ or my cash for cars monthly payment didnt cover the cost of a new gearbox for my car which i then only had for work related business, would have, as a PAYE been fantastic to have been able to offset my tax bill against these loses.

oh as i work for only one employer, going self employed isnt an option before you suggest that.

Tax rules are clear on this. If you run a business then you can offset expenses relevant to that business for tax purposes. Has been like this for a long time and is fairly similar in most countries.

But again you miss the point. Even as an employee, you can still have tax deductions or tax free income that impact your effective tax rate.
- For example, as a higher rate tax payer, if you make a contribution to your pension out of your own funds, you effectively get a 40% tax deduction for the expenditure. Even if you are an employee - no need to be self employed.
- Example 2. Sell some shares. If the gain is below approx £11k in any given year, that gain is tax free for you.
There's no charge for those bits of tax advice

mamba80

i know i can off set tax against pensions contributions and i did sell shares a while ago and didnt pay tax on a a few £k of profit...

so i was close, its the interest on the debt rather than the debt itself, so a company could borrow at a higher % rate, so limiting their tax ? yes?

but for the most people the options are very limited and this is what gets peoples backs up, what is available, perfectly legally for companies, isnt there for the working guy on PAYE.

i ve given up about Corpmoaning tax because, having lived with an accountant for a number of years, the mind boggles at the ways and means of working the system and of course HMRC/Gov like to change things now and then.....

Stevo_666

mamba80 wrote:

so i was close, its the interest on the debt rather than the debt itself, so a company could borrow at a higher % rate, so limiting their tax ? yes?

but for the most people the options are very limited and this is what gets peoples backs up, what is available, perfectly legally for companies, isnt there for the working guy on PAYE.

On the interest point:
- External borrowing: clearly a company would be mad to pay above the going rate on external loan interest as the commercial cost is greater than the tax benefit (obvious really).

- Internal/intra group borrowing: no, there are rules called transfer pricing regs that mandate interest rate on loans must be at the market rate (also apply to nearly all intra group transactions). A group must be able to justify the rate used. While there is no single 'right answer', there is usually a reasonably narrow range that is acceptable. If as a borrower a company pays above the going rate of interest to another group company, the excess above the market rate is not deductible for tax purposes.

As for your point about options, don't forget that there are approx 25 different taxes levied on businesses, corporate tax is only one. Many of the others are simpler and easier to collect. This is why I posted a link to the PwC report about total tax contribution of large groups, because the large majority of the tax they pay is taxes other than corporate tax. But it is this tax that gets a massively disproportionate share of the press and activists attention. Have a look at the link and you will see why the likes of Mondelez stress their overall contribution.