Scotland Watch

[Little John]

Precisely, which part of Nick Robinson's questions did Alex Salmond not answer UE? If you are referring to his answer regarding corporation tax following the move of RBS's headquarters to London (with the loss of no jobs or functions), Alex Salmond answered this question fully by stating that would not result in a loss of corporation tax since corporation tax is incurred in the territory where a given economic activity occurs. In other words, his point is that since none of the operational functionality nor any of the jobs would be leaving Scotland (i.e. none of the business would be leaving Scotland) in the event of the headquarters being moved to London, there would be no resulting decrease in corporation tax. So, irrespective of whether or not you agree with him, it is incorrect for you to say he did not answer this question. Which leaves only the possibility he is correct or incorrect on that point. Are you saying he is incorrect?

Edit to add:

I've just taken a look at HMRC and a couple of other sites and they state that a company with the headquarters in the UK, but with operations in another country will be subject to corporation tax in the following two ways:

If the operation in the other country is classed as a subsidiary company, then the earning from that subsidiary company, irrespective of whether or not they have been taxed in the other country will be completely disregarded in the calculation of UK corporation tax of the parent company.



Or

If the operation in the other country is classed merely as an overseas branch of the parent company, then the earning of the overseas branch, if they have been subject to corporation tax in the other country, are taken into account and are fully offset as a tax relief on the parent company. The specific technical term HMRC uses for this is "double taxation relief "

In either event, Alex Salmond is quite correct in his answer given to Nick Robinson, so far as I can see UE. Though, I am happy to stand corrected myself.

[UndercoverElephant]

Precisely, which part of Nick Robinson's questions did Alex Salmond not answer UE? If you are referring to his answer regarding corporation tax following the move of RBS's headquarters to London (with the loss of no jobs or functions), Alex Salmond answered this question fully by stating that would not result in a loss of corporation tax since corporation tax is incurred in the territory where a given economic activity occurs.

If that is true, then why do international companies move their headquarters to regimes with low corporation tax?

[UndercoverElephant]

Precisely, which part of Nick Robinson's questions did Alex Salmond not answer UE? If you are referring to his answer regarding corporation tax following the move of RBS's headquarters to London (with the loss of no jobs or functions), Alex Salmond answered this question fully by stating that would not result in a loss of corporation tax since corporation tax is incurred in the territory where a given economic activity occurs. In other words, his point is that since none of the operational functionality nor any of the jobs would be leaving Scotland (i.e. none of the business would be leaving Scotland) in the event of the headquarters being moved to London, there would be no resulting decrease in corporation tax. So, irrespective of whether or not you agree with him, it is incorrect for you to say he did not answer this question. Which leaves only the possibility he is correct or incorrect on that point. Are you saying he is incorrect?

Edit to add:

I've just taken a look at HMRC and a couple of other sites and they state that a company with the headquarters in the UK, but with operations in another country will be subject to corporation tax in the following two ways:

If the operation in the other country is classed as a subsidiary company, then the earning from that subsidiary company, irrespective of whether or not they have been taxed in the other country will be completely disregarded in the calculation of UK corporation tax of the parent company.

Or

If the operation in the other country is classed merely as an overseas branch of the parent company, then the earning of the overseas branch, if they have been subject to corporation tax in the other country, are taken into account and are fully offset as a tax relief on the parent company.

In either event, Alex Salmond is correct in his answer given to Nick Robinson.

OK. I am no expert on this, but I am struggling to understand why any company ever bothers to move its headquarters for tax reasons, and I'm also struggling to understand why RBS has announced it is moving its headquarters. Are you saying it is entirely purposeless? That RBS have made this announcement to make people think there is some substantive reason why they're moving HQ in the event of Scottish independence, even if there isn't?

And as for Mr Salmond, if he hadn't spent the last 12 months giving misleading or outright dishonest answers to almost all the questions he's been asked, I might not be so fast to judge him now on matters where I'm no expert. His track record is such that I now assume him to be lying all the time. That's what he gets for lying 99% of the time.

[vtsnowedin]

Precisely, which part of Nick Robinson's questions did Alex Salmond not answer UE? If you are referring to his answer regarding corporation tax following the move of RBS's headquarters to London (with the loss of no jobs or functions), Alex Salmond answered this question fully by stating that would not result in a loss of corporation tax since corporation tax is incurred in the territory where a given economic activity occurs.

If that is true, then why do international companies move their headquarters to regimes with low corporation tax?

Could it be that the USA , the source of most of these tax avoidance schemes does not have tax laws as logical as the UK does? Notice that RBS is not moving it's headquarters to New York, USA which they would be obliged to do if it was a nickel cheaper to their share holders.

[Tarrel]

It's not the head office that gets moved, it's the trading location. So, for example, if you sell someting on Ebay, the invoice for the fees comes from Luxembourg! For online businesses this is very easy to do.

For "physical" businesses (eg. starbucks) it's more difficult. IIRC, they did something like having their raw materials supplied at inflated costs from a subsidiary in a low-tax location, thus depressing the profits made in the high tax location (thus paying less corporation tax in that location).

[UndercoverElephant]

Precisely, which part of Nick Robinson's questions did Alex Salmond not answer UE? If you are referring to his answer regarding corporation tax following the move of RBS's headquarters to London (with the loss of no jobs or functions), Alex Salmond answered this question fully by stating that would not result in a loss of corporation tax since corporation tax is incurred in the territory where a given economic activity occurs.

If that is true, then why do international companies move their headquarters to regimes with low corporation tax?

Could it be that the USA , the source of most of these tax avoidance schemes does not have tax laws as logical as the UK does? Notice that RBS is not moving it's headquarters to New York, USA which they would be obliged to do if it was a nickel cheaper to their share holders.

OK. The question still remains: if it makes no difference (in the UK/Scotland) then why are they moving their head office at all?

[UndercoverElephant]

It's not the head office that gets moved, it's the trading location.

But this discussion is in response to an explicit statement from RBS that they are moving their "headquarters" to London in the event of a yes vote!

[vtsnowedin]

If that is true, then why do international companies move their headquarters to regimes with low corporation tax?

Could it be that the USA , the source of most of these tax avoidance schemes does not have tax laws as logical as the UK does? Notice that RBS is not moving it's headquarters to New York, USA which they would be obliged to do if it was a nickel cheaper to their share holders.

OK. The question still remains: if it makes no difference (in the UK/Scotland) then why are they moving their head office at all?

You would move to where the rules let you rip off the customers the most legally.

[AndySir]

In this particular case they're also owned by the UK government. Might be avoiding a compulsory buy back of shares in the event of separation?

[biffvernon]

More from the wee ginger dug
http://weegingerdug.wordpress.com/

[lancasterlad]

OK. The question still remains: if it makes no difference (in the UK/Scotland) then why are they moving their head office at all?

To benefit from the Bank of England being the lender of last resort?

[Tarrel]

It's not the head office that gets moved, it's the trading location.

But this discussion is in response to an explicit statement from RBS that they are moving their "headquarters" to London in the event of a yes vote!

Well, I answered in response to the question; "Why do international companies move their headquarters to regimes with low corporation tax?"

The recent high profile cases involving DODGY TAX AVOIDERS, Starbucks, etc. minimising the corporation tax they pay in the UK have not involved them moving their head offices. I'm not aware of any companies moving their head offices to reduce CT (maybe I'm wrong), as it's where the trading is carried out that determines which tax regime they fall under.

I doubt the RBS move has anything to do with corporation tax. As has been suggested above, there are other factors in play:
- The fact that they are majority-owned by the UK government
- The desire to retain the BOE as a "lender of last resort" (although, AIUI, the BOE didn't bail out RBS during the financial crisis, the government did, by buying shares)
- The desire to stay within the FSCS £85,000 deposit guarantee.

Plus, maybe, a little bit of politics?

[emordnilap]

People vote for a vision,

What I was trying to say. It was the reason Obama bullshat his way to a presidency. Of course, he'd already been chosen by those really in power but, at the time, he made it seem like democracy was at work. Whatever. The grass is always greener.

[peaceful_life]

It's not the head office that gets moved, it's the trading location.

But this discussion is in response to an explicit statement from RBS that they are moving their "headquarters" to London in the event of a yes vote!

'BBC reporter caught red-handed manipulating video in Scottish indy campaign'

http://tompride.wordpress.com/2014/09/1 ... -campaign/

[UndercoverElephant]

OK. The question still remains: if it makes no difference (in the UK/Scotland) then why are they moving their head office at all?

To benefit from the Bank of England being the lender of last resort?

Well, in that case there is a give-and-take situation going on here. If they would be able to access the BoE, which presumably also means that if they are in trouble then the rUK taxpayers bail them out, then there absolutely must be a corresponding benefit to the rUK. The rUK wouldn't allow them to do this if it was a one way street - if it helped RBS in these ways but Scotland still benefited from all the tax profits. If the rUK did allow such a thing then it would effectively be the same situation as a currency union, which has already been point-blank ruled out.