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Tax avoidance: is the tide turning?

HMRC is clamping down on tax cheats and MPs are set to grill big businesses over their tax affairs.

 

by Michelle McGagh on Nov 12, 2012 at 13:04

Tax avoidance: is the tide turning?

A pair of eyes peer out from a hole in a piece of card above an ominous warning: ‘We’re closing in on undeclared income.’ HM Revenue & Customs (HMRC) wants us to know it’s getting serious about tax avoidance.

This latest campaign is part of a £917 million evasion and avoidance programme that the government hopes will raise £7 billion by 2014/15.

Secretary to the treasury David Gauke said of the campaign: ‘Most people play by the rules and pay what they owe, but HMRC is cracking down on those who don’t. Using the £917 million the government has made available to tackle avoidance, evasion and fraud, HMRC is closing in on tax cheats.’

He urged taxpayers to ‘declare all your income’ as ‘tax dodgers are simply storing up trouble for the future’.

As part of the campaign, those who wish to declare income not previously declared can do so on this government website.

Shop a cheater

HMRC is also encouraging people to shop anyone cheating the taxman. It will have been particularly pleased last week when a whistleblower at HSBC gave HMRC the details of every British client of the bank’s Jersey branch.

Jersey has long been regarded as a tax haven. It has a standard rate of income tax of 20% and no inheritance tax or capital gains tax for residents and for non-residents there are certain incomes and gains that are exempt from tax, although they have to pay tax in their home country. It's no surprise that there are more than 4,000 Britain-based customers with £6.9 billion in offshore accounts.

However, the most serious issue for HSBC is not tax avoidance, it’s the nature of their customers, who reportedly include a drug dealer, three bankers charged with fraud and a man who possesses 300 weapons.

The bank could face money-laundering charges, and the customers are now being investigated to see whether they have avoided tax.

What about all these companies avoiding tax?

HMRC is homing in on individuals who are avoiding tax, but there is plenty of avoidance happening in the corporate world too, which it could be argued is of much greater consequence.

There are many companies taking advantage of loopholes in the UK's tax system to engineer a loss and minimise their tax liability.

It must be noted that tax avoidance is legal and individuals and businesses are allowed to arrange their tax affairs to minimise their tax bill, but tax evasion is illegal.

Although the schemes used by companies are legal, there is a bigger question how moral it is to avoid tax on such large scales.

How much tax do companies pay?

Companies pay corporation tax, which currently sits at 24% but is due to fall to 22% by 2014. This tax is payable on profits and capital gains a company makes.

However, there are lots of expenses that companies can offset against their profits in order to bring their tax bills down. Here are just some ways companies are side-stepping tax:

Starbucks

The coffee chain is due to get a grilling from the House of Commons Public Accounts Committee over its tax avoidance measures. It has paid zero corporation tax in the UK over the past three years and tax totalling just £8.6 million in the 14 years since it opened in the UK, despite sales hitting £3 billion in that time.

Starbucks has reduced the reduced the profits it can be taxed on by paying a 6% royalty payment to its regional headquarters in the Netherlands to pay for the use of Starbucks’ intellectual property and logos.

Amazon

The online retailer was investigated earlier this year over its tax arrangements. HMRC was not happy with the fact that it avoided paying tax by officially allocating its UK sales to a company based in Luxembourg, despite one in four books bought in the UK being bought from Amazon.

In 2011 Amazon generated sales of £3 billion in the UK but paid no corporation tax. In 2010 the Luxembourg office of Amazon had sales of £6.5 billion and employed 134 people compared with 2,265 employees in the UK with just £147 million of sales.

Facebook

The social networking site, which is worth $100 billion, channels its UK revenue through Ireland and has paid just £238,000 in corporation tax in the last tax year on an estimated £175 million revenue. When a UK advertiser buys ad space on Facebook, the order is simply processed in Ireland, meaning the sale falls under Ireland’s less stringent tax rules, even though UK users of Facebook will see the ads.

Facebook generated £20 million of sales in the UK in the last tax year but it also operated at a £14 million loss.  

Water companies

It’s not just big multi-nationals avoiding tax, Thames Water and Anglian Water are believed to have paid no corporation tax on profits, and Yorkshire Water is believed to have tax in ‘the low millions’, despite all three making hundreds of millions in profits and paying out huge bonuses.

Anglian Water’s turnover in the last tax year was £1.1 billion, Yorkshire Water was £820 million, and Thames Water’s turnover was £1.6 billion.

What is the government doing about it?

The House of Commons Public Accounts Committee is set to grill executives from Starbucks, Amazon and Google today over their lack of tax payments. MPs aren’t happy that companies are exploiting loopholes when the rest of the country is struggling.

Conservative MP Charlie Elphicke has been particularly vocal on the issue and on 5 November told the Commons that Amazon had paid an effective tax rate of 2.5% on its 2011 earnings, Google paid 0.4% and Starbucks paid nothing.

While the government investigation will be welcomed, it has already been beset by problems. It emerged at the weekend that chairman of the Public Accounts Committee, Labour MP Margaret Hodge, has a stake in a family business Stemcor that paid just 0.01% tax on its revenue last year.

Stemcor’s accounts show that it paid just £163,000 on revenue of £2.1 billion in 2011. The steel trading company was set up by Hodge’s father and is now run by her brother. She has shares in the company.

Hodge has defended the tax arrangements of Stemcor, stating that ‘they have always promised that they do absolutely nothing to avoid tax. I would be very mad if I found out differently.'

Can we stop companies avoiding tax?

Closing down all the loopholes in the tax regime would require a huge overhaul that would take years, and no doubt it would be met by fierce lobbying from business groups.

The fact is companies have the funds to employ accountants and tax experts in order to help them minimise their tax as much as possible.

Former City minister Lord Myners has been outspoken about tax avoidance, slating companies that are headquartered offshore to avoid tax. He said they were creating unfair competition for British-based businesses.

Myners has floated the idea of a sales tax to ensure big corporations pay their fair share. He said: ‘The current system for collecting corporation tax from multi-national companies is flawed. Corporation tax for a multi-national company operating in the UK is close to being a voluntary payment.’

He said that the government had to decide whether it was happy with the tax-take from other ‘secondary  effects’.

‘You either shrug your shoulders and say you get benefits from secondary effects through employment taxes, VAT, the multiplier effect and so on. Or alternatively you look for some other form of taxation,’ Myners said. ‘If that were to be the case, some form of sales tax has attractions.’

47 comments so far. Why not have your say?

Clive B

Nov 12, 2012 at 14:35

Re Stemcor, not sure why you're quoting tax as a percentage of revenue when it's levied on profit

Telegraph said

"Analysis of Stemcor’s latest accounts show that the business paid tax of just £163,000 on revenues of more than £2.1bn in 2011. However. it is not known whether the company – which made profits of £65m – used similar controversial tax avoidance measures criticised in the past by Mrs Hodge"

see http://www.telegraph.co.uk/finance/businesslatestnews/9668396/Margaret-Hodges-family-company-pays-just-0.01pc-tax-on-2.1bn-of-business-generated-in-the-UK.html

seems to be about 0.25% tax and Hodge has the nerve to criticize others. Unbelievable.

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hooligan

Nov 12, 2012 at 16:55

it is disengenuous to suggest that the only issue is to pay the least tax.

it is akin to saying hat only 10% of rapists are prosecuted.

the global companies paying little taxes are displacing domestic companies that compete by paying appropriate taxes.

global companies can only employ staff with this advantage and generally employ overseas employees for company support functions at a fraction of the cost of domestic employees!

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metin mentesh

Nov 12, 2012 at 16:55

the governments tax us get funded by the companies thats the short of it

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gggggg hjhjkl;'

Nov 12, 2012 at 17:47

This is a two way street, lets hope other countries do not start investigating the tax practices of OUR international companies, such as there are!!!

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John Willman

Nov 12, 2012 at 17:54

This article is confused in it's use of the terms "avoidance" and"evasion"and yet more confusing in it's suggestion of a third category of "fraud". If certain types of avoidance are deplorable then find ways to close the loopholes that give rise to the avoidance!

If evasion isn't fraud then what is it as by definition it's illegal! For the avoidance of doubt "avoidance" is playing the game by the rules. If the rules should not allow these types of avoidance, then change the rules.

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Bob

Nov 12, 2012 at 18:10

If tax avoidance centres solely on transfer pricing then I am afraid that I simply do not accept that HMRC is allowing offensive transfer pricing to take place. Inspectors of Taxes are (rightly) all over such pricing arrangements but the simple fact is that if a multi national sets up a business, with substance, in a tax haven, then that business is perfectly entitled to charge an arms length price for the supply of goods and services by that business to entities in higher tax jurisdictions. It is the case, by the way, that some jurisdictions regard the UK as a low tax country for the purposes of challenging transfer pricing arrangements.

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Bunny

Nov 12, 2012 at 18:26

Govt should tackle individual tax evasion such as sub sale relief on property purchases, a much abused relief, especially by those that can afford an expensive house. Disgraceful that solicitors offer this as a legitimate tax avoidance scheme, I know, I've just been offered this to avoid over £50000 of stamp duty. I declined and paid the tax due. Please Mr Tax Man, make me right and retrospectively clamp down on this!

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Guy Thompson

Nov 12, 2012 at 18:42

I avoid Starbucks' weak and overpriced coffee. And it is a scandal that its customers pay far more in VAT than the company does on its business. Cafe Nero and Costa Coffee for me.

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Dennis .

Nov 12, 2012 at 18:43

Companies have a legal duty to their shareholders to minimise tax.

Incidentally Mr Bunny it's very noble of you to pay an extra £50K in tax when it could no doubt have been legally avoided. I hope the government is as conscientious as you in spending it.

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Clive B

Nov 12, 2012 at 18:50

@ hooligan

"global companies can only employ staff with this advantage and generally employ overseas employees for company support functions at a fraction of the cost of domestic employees!"

I work for a US company. Am I supposed to give up my job (and quit paying tax here) in case I'm replacing a US employee who could pay more tax in the US ?

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hooligan

Nov 12, 2012 at 18:56

again, the issue of transfer pricing is complex. when you wrap that up with government assistance for pet projects, what is missing is a focus on the victim.

i made a comparison with prosecuted rape, since it is documented that 90% of rape is not prosecuted. similarly here, the actual victim is not identified.

that victim is those companies who would otherwise be employing people at higher wages.

starbucks employs the otherwise unemployable and uses transfer pricing to NOT pay tax, thus gaining a competitive pricing advantage over those businesses that do pay tax and those employees that have worked to earn higher wages by dint of experience.

wal mart illustrates the point further. it obtains grants from various state and city governments to open new stores, underpays its workers, puts other stores out of business by undercutting on price and encourages its workers to claim food stamps.

low tax rates and facilties are, in fact an ecouragement to displace the economic fabric of a local business suppy chain

morals and ethics are at play here and whether this governement encourages good corporate citizenship.

the law (including tax law) is an ass.

i declare an interest since i have ceased paying taxes. I avoid taxes by not earning income and have withdrawn my labour (sufficient capital saved to not need to work).

This is my way to register a protest, rather than subsidizing what I consider ot be malpractise by multinationals, if not fraud, embezzlement and general all round rudeness to society in general.

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John C

Nov 12, 2012 at 19:03

MP's are set to grill big business over their tax affairs!!!!!!!!!!!??????? At least they have the necessary expertise on tax avoidance!!!!!!!!!!!!!

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pb via mobile

Nov 12, 2012 at 19:17

instead of hearing about people and companies avoiding tax the govt should look at its wastefull practises , they may take in more revenue but it will simply be poured down the drain on pet projects and managers, perhaps if they stated all the extra revenue raised will be used to support the elderly or provide more nurses and doctors or to pay to retain more experienced teachers, then I would have more time for the project. But you just know it will never get to where its needed it will be squandered.

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hooligan

Nov 12, 2012 at 19:20

clive B. i appreciate your point. i would point out that 47.1 million people in america need 133 dollars a month of food stamps to get by and they have wal-mart.

british polticians and its tax system have no monpoly on stupidity and short sightedness.

do you get paid more than your american counterparts and does your company pay taxeson its uk earnings?

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hooligan

Nov 12, 2012 at 19:23

John C - taxes AND expenses?

pb - i hear that, i want teams of experts to go in and prototype each departmental vote at the ground level (one typical school or hospital or police station) and "optimize" to either maximise utlity for spend, or minimize spend.

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Alan Tonks

Nov 12, 2012 at 19:51

“The House of Commons Public Accounts Committee is set to grill executives from Starbucks, Amazon and Google today over their lack of tax payments. MPs aren’t happy that companies are exploiting loopholes when the rest of the country is struggling.”

Yes I see it takes a thief to catch a thief, how ironic there must be amoral there.

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nik

Nov 12, 2012 at 19:56

I get the impression that not paying tax un the US is "unamerican". US customers consequently show their disapproval by not using those companies that do not contribute appropriately.

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raphael kassin

Nov 12, 2012 at 19:59

The UK government is wrongly acting like the French. Instead of making wealthy spenders feel unwelcome and eventually leave to live a lavish lifestyle elsewhere (and creating jobs there), why not accept that everybody loves England? Be like the Swiss: negotiate taxes selectively for those who otherwise would not stay in the UK, differentiate according to residence areas. Price discrimination does bring higher income. Just look at the Swiss and ask them if they are happy. And if idiots like Ken Livingstone complain, send Boris to show them how it is. Simples!

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Jonathan Bryce

Nov 12, 2012 at 20:04

People seem to be confusing a lot of different issues. The water companies and Vodafone made large investments in their infrastructure and claimed capital allowances on them. Claiming capital allowances is not controversial. Pretty much every business in the country claims them. If you invest in capital equipment and capital allowances are available, I see no reason why you shouldn't claim them, and neither does HMRC.

Barclays sold some subsidiaries and claimed substantial shareholding relief on the capital gains. Again, that is not controversial. Substantial shareholding relief exists to prevent double taxation on capital gains on each company up the chain of ownership, and on the shareholders on the gains they make from the resulting increase in the value of their shares.

Amazon, Starbucks etc relate to transfer pricing issues. That is more controversial, and there is a lot of material in every budget relating to it; but ultimately it comes down to various tax authorities around the world fighting for a bigger share of the total taxable profits.

Stemcor relates to the fact that turnover is not equal to profit. People with no accountancy training sometimes struggle with the concept that companies have to pay money for raw materials, wages, rent, electricity and other such things in order to produce the product they are selling, and you deduct those costs from sales revenue in order to arrive at the profit. Nevertheless, it is not a controversial concept. Iron ore is pretty expensive. Electricity is expensive. Coal is expensive. Sheet steel etc is expensive. I don't know exactly what Stemcor does, but it wouldn't surprise me to learn that they operate on low margins.

We already have a sales tax, it is called VAT. There is no need to introduce another one, but if the government wants to increase the VAT rate over and above the increase it has already made to it, then that is a separate debate. They are of course free to do so.

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hooligan

Nov 12, 2012 at 20:13

i dont get any tax relief on capital expenditures like cars, houses and white goods. why should companies, especially with zero interest rates? perhaps everyone should be a company and pay not taxes at all? (no comments about hire a hooligan please!)

i doubt whether anyone will not buy an apple i-pad

http://www.zdnet.com/apple-earned-36-8bn-in-2012-paid-only-1-9-percent-overseas-tax-7000006862/

lots of deductibles there. I would love to say that there could have been 10 apples in the UK if nobody paid any tax here, but then, we will never know.

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jcz

Nov 12, 2012 at 20:49

Chancellor George Osborne has branded tax avoidance as “morally repugnant”.

MPs all claim their expenses were within the rules. Funny how avoiding tax (within the rules) is considered “morally repugnant" but their expenses scandal was not.

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BILLFISH

Nov 12, 2012 at 21:15

Turn the argument on its head - it is really quite simple.

The current rules of the game encourage the smartest minds to be concentated on avoiding tax.

Why not encourage them to do the reverse by only allowing companies to pay bonuses to directors or PDMR's that are a set percentage of the GROWTH in corparation tax year on year. At a stroke that would deter the incentive to avoid tax payments.

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Georgie

Nov 12, 2012 at 21:22

If it is tax evasion then prosecute. If it is tax avoidance then, either change the rules /loopholes, or leave them alone. Surely these big companies provide employment for thousands of people, why are they in the UK? because the financial implications suit may go elsewhere. Close the loopholes no problem but for heavens sake no one pays more tax than they have to.

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Tortoise

Nov 12, 2012 at 22:17

Georgie is right. As a tax accountant myself I can tell you that a lot of tax avoidance is as a result of bad legislation and the fact that for as long as I can remember, almost 50years, we have not had a chancellor who had the first idea how the tax system works. The best way to become chancellor is either to be the PMs best mate, or in the case of Gordon B his worse enemy and who basically got the job to keep him out of TBs hair. Start appointing chancellors who know what they are doing.

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joe stalin

Nov 13, 2012 at 07:53

To hear Margaret Hodge berating companies over their lack of cooperation is just idiotic an sadly it would seem to be the sort of thing that is only possible in this country where our political representatives have yet to grasp the fact that they are where they are to serve us rather than themselves. On the tax issue compex it may be but it is unaccepatble and the loop holes should be closed. If a foreign company wants to do business here than it will have to pay CT on profits generated after offsetting the appropriate alllowances of costs incurred in this country. So if Starbucks want to offset the cots of coffee against its profits than the coffee has to be bought in this country and not washed through Switzerland. If Amazon wants to sell us goods in the UK then the goods have to be purchased and sold through a tax registered sub in the UK and only net receipts returned to the parent company wherever it is domiciled. The same will have to apply to all companies be it Apple,the US investment banks and some of the UK banks which still seem to be dodging the issue and even the car manufacturers. A reduction of the CT rate would of course help matters. If Starbucks can't cope with tis well so be it more coffee sold for Cafe Nero and John Lewis and Argos.etc

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pb via mobile

Nov 13, 2012 at 08:04

It is correct that poorly drafted and complicated tax law is now the problem, simply change the system , some sort of flat rate with no avoidance allowed , sounds easy but certainly would need thinking through to avoid certain scenarios , but whatever happens we have to stop the Governments taking our tax and wasting it , some hope.....

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Jonathan Bryce

Nov 13, 2012 at 10:57

hooligan,

Companies don't usually get tax relief on land and buildings and the company car tax regime means it generally isn't worthwhile buying a car through the company. White goods do get capital allowances if they are used in the business. Buying these things is a cost of running the business, so it seems only right that they should be considered when calculating the taxable profit.

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hooligan

Nov 13, 2012 at 12:56

there are a whole host of advantages given to companies that people (taxpayers/voters) do not get, favouring companies above people and resulting in nominal taxes on companies and 50% effective tax rates (post incvome tax, VAT and national insurance for individuals).

therre would be a few percent annual depreciation charge on land and buildings that would be tax relief not allowed to inidividuals. capex is fully allowed to companies (and not individuals). capex for new furniture, window cleaning, new whiteware, desk, computers etc).

another relief would be interest on borrowings, another r&d, another is the ability to reclaim VAT (saving 20% on transactions),

each of these may be valid costs of doing business, but they are equally valid in that people, in this day and age, also pay them. these allowances are especailly not valid for those businesses that "cheat",

my point is that each of these is also valid for an individual, where "cheating" occurs by a comapny and individuals should also form companies to "cheat" if these are valid for a company.

an indiviudal can form a company and "wash" these "legitimate" expenses against income and "cheat" this should take care of any residual UK income left before the indiviudal can form a a company based offshore.

this is the equaivalent action of the "cheats"

i understand a company in macedonia pays zero corporation taxes. you can form one in half an hour.

this is a tax angle BUT the social costs for business that cheat on taxes, or rely on getting an unfair advantage (from grants, subsidies and other hand outs like PPI) is the social cost of displacing otheres who canot compete on a level playing field.

government has a job to represent voters. i am heartily sick of the defence of companies that pay no or very little tax, because these companies employ people who get ripped off in the tax system INSTEAD, and other companies simply cant compete (so go out of business or do not enter business) with tax loopholes and government handouts and subsidies

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James B. Johnson

Nov 13, 2012 at 15:28

Most bloggers seem to agree that it is difficult to close the loopholes in Corporation Tax collection so I am pleased to see that Myners is suggesting a sales tax.

This is an idea that I have floated in these pages several times.

The difficulty is in ensuring that it is not simply passed on to customers.

It also appears that there is much evidence of Income Tax avoidance and a similar solution is possible and that is a Wealth Tax.

We probably need a version of Ted Heath's Prices and Incomes Board.

If some of you think that this is just more regulation and control you are right, but then, you shouldn't have started all this tax avoidance mularkey in the first place.

Frankly most Companies operating in the U.K. are a disgrace.They start off by cheating their employees, then they cheat their customers and then they cheat the taxman. The evidence for this piling up day by day.

Finally, any arrangement which is deliberately intended to avoid tax is in fact illegal.

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hooligan

Nov 13, 2012 at 16:13

well said, james.

the other alternative to a flat transaction tax on all purchases of goods and removing the "wealth" of people who have saved for decades so they can stop working, is to not pay any tax at all and simply have the bank of england print cash for any deficit. all "taxation" then becomes voluntary or a form of insurance for physical protection.

not too far off from the current "experimental" qe we have now.

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Prof Eman

Nov 14, 2012 at 21:47

Hi all

I suggested some time ago a rather different tax, that could not be easily avoided.

A tax on UK turnover, something rather small, say less than half of 1%, to be collected via VAT accounts, off settable against Corporation Tax.

A company that pays no CT, then ends up paying the Turnover tax, whilst a company paying CT, ends up paying the difference between CT and turnover tax if any.

Any comments on this idea.

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hooligan

Nov 14, 2012 at 22:02

just make VAT 50% and abolish all other taxes?

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Prof Eman

Nov 14, 2012 at 23:12

hooligan

If we made VAT 50%, then most people would shop abroad where VAT is around 20%.

We would shoot ourselves in the foot with such a rate of VAT.

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hooligan

Nov 14, 2012 at 23:37

pretty much like shopping around for the lowest corporate tax rate then heh.

Seriously though, what we are seeing is capital market arbitrage of disparate fiscal policies, else why on earth would anyone bother with ireland, liechtenstein, cyprus and, the latest, macedonia.

each of these countries is following the "beggar thy (stupid) neighbour.

i do favour the approach ti a standardised system of equitable tax collection, thats why my approach is to abolish all exemptions for companies and individuals and set a single rate of tax on income/profits for the remainder, with zero inhertiance taxes and customs duties. i feel that transaction taxes do more to encourage black markets in second hand goods and punish high ticket items in pounds shillings and pence terms.

at least you have wisdom to consider a method. better minds than mine will contribute to the debate.

as with my abolition of all taxes, i am too cynical to believe that our leaders will do nothing other than further there own personal causes, or resort to getting drunk and well fed at our expense, whichever is the easiest. and i suspect that they will get fatter over the years.

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hooligan

Nov 15, 2012 at 14:13

here's something to read over your coffee..see if you can stay on your seat..it reads just like an episode of "yes, minister" except this is the language of a fraudster evading taxes in the uk

http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/uc716-ii/uc71601.htm

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Prof Eman

Nov 16, 2012 at 00:01

hooligan and others

As many of the foreign corporates, pay little or no tax on UK operations it gives them an unfair advantage over UK based companies, who do. In the long term that means forcing our companies out of business, or at least curtailing them.

Contrary to some theories, the nett effect of having them could become negative. As such the matter is not a joke, and needs to be considered fully.

As such to my Turnover tax suggestion, I would like to add another proviso, that only big firms who are likely to use foreign based tax avoidance techniques are subjected to the UK turnover Tax.

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Steven22

Nov 17, 2012 at 11:36

@Jonathan Bryce - Indeed turnover does not equate profit but Stemcor does have a few tax haven subsidiaries and you got to wonder why they need them.

However, Stemcor appears to pay quite of abit of corporation tax in the UK (ten of millions) - so I am not sure how Telegraphy got the £163k from although the differences between pretax and posttax number may involved tax paid in other jurisdiction.

Year ending 2011

Pretax 65,203,000 GBP

Posttax 38,301,000 GBP

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Anonymous 1 needed this 'off the record'

Nov 17, 2012 at 12:01

This is Globalization baby!!

WhooooHoooo!

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Prof Eman

Nov 17, 2012 at 12:52

Steven22

Something odd about the Stemcor figures.

Represents a tax rate of 41% on pretax figures.

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Observer

Nov 17, 2012 at 13:23

Income generated in the UK should be taxed in the UK.

A straight turn-over tax should be levied and held in an escrow account until the end of the year.

Then the reckoning can come when end of year results are produced.

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Steven22

Nov 17, 2012 at 13:58

@Prof Eman, Differing tax rates between jurisdictions and restrictions on the abiblity and timing to offset losses, inter and intra jurisdictions

resulted in the apparently higher than normal tax rates. (thought it will sort it self out over time).

So Stemcor is not AMZN or SBUK or FB or GOOG, though the existing of tax heaven subsidiaries still raises questions.

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Will via mobile

Nov 17, 2012 at 18:46

Increase Vat, allow companies to offset corporation tax against it.

British based companies would then be on a level playing field.

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Prof Eman

Nov 19, 2012 at 22:41

Hi

Some more interesting facts about taxation

http://www.guardian.co.uk/money/2012/nov/16/beat-taxman-keep-child-benefit

Self explanatory.

You might find it useful if you are earning over 50k?

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joe stalin

Nov 20, 2012 at 08:10

Clearly the tax take from corporates as it stands is totaly inadequate and wide open to abuse. which has to be stopped and there are number of ways of doing this without driving business out. A lower rate would see to that together with the closing of any loopholes. You do business in this country you pay tax perhaps taking it right off the top is the answer, with a safe guard that it does not end uop being footed by the consumer. Ultimately though we need to bring in more in total tax revenue so more people need to pay not yet more by the few that are already doing the heavy lifting.No more personal service contracts for politicians mandarins and State employees, better control over the black economy. Make it more difficult to get on to the benefits system and greater accountability over how our tax revenue is spent. A dramatic reduction of the regulatory burden and the marzipan layers in the public sector. Realistic State employee pension policy.

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hooligan

Nov 20, 2012 at 10:09

joe stalin - the answers are obvious (equity and common sense). the questions are somewhat more problematic. do british companies benefit from offshore tax havens? take Barclays plc for example. Until it had to cough up a massive fine for sheltering assets in the Caribbean, it thought nothing (under that completely corrupt American, Bob Diamnd) of hiving off a huge chunk of Barclays balance sheet along with million pound a year bankers to get around regulatory capital requirements, hide loan loss provisions and evade tax.

What you have is furthering of the national interest by corrupt governments such as Ireland, the Netherlands, Macedonia, Tonga, Bermuda and Netherlands Antilles who think nothing of "beggaring" countries with higher taxes.

You combine this with the corruption and stench of inefficient buraucracies in the UK, the US, Europe and Japan who, quite frankly, can't tell their Ar*es from their Elbows and you are left with quite the problem. If the stench goes away, you put the Irish the Dutch, the Macedonians out of work because their "competitive advantage" disappears.

A global fiscal union would fix the problem, but then, where would our government put its snout if the trough was made available to all?

Suffice to say, a free market with no taxes is the answer. Welfare, defense (not attack as per the Pentagon) policing and health care need to be voluntary and certainly "NO REPRESENTATION WITHOUT TAXATION".

I finish with a couple of quotes from tacitus

Idque apud imperitos humanitas vocabatur, cum pars servitutis esset.

ibi boni mores valent quam alibi bonae leges

corruptissima re publica plurimae leges

good bloke that tacitus..how about some stalin quotes!

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joe stalin

Nov 20, 2012 at 10:43

искренний дипломат походит на сухое водное или деревянное железо

человечество разделено на к богатому и бедному, во владельцев собственности и эксплуатировалось, и резюмировать один сам от этого fundemental отделения и от антагонизма между бедным и богатым, средства резюмировать себя от fundemental фактов

благодарность - болезнь, перенесенная собаками

there are many many more :-)

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hooligan

Nov 20, 2012 at 11:19

excellent!! thanks (in a non doggy way). rest assured I am no diplomat and (I think) i am in that happy place of having no fundAmental preferences! heh, very good.

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