PowerSwitch

http://www.bbc.co.uk/news/business-20022365

Accounts for one of its units, eBay (UK) Ltd, show that for 2010 - the last year available - it owed tax of £766,000 on profits of £4.4m. In total, it had a deferred tax bill of £1.23m.

The auction site told the BBC: "eBay in Europe works with tax authorities and complies fully with all applicable tax laws and regimes - including national, EU, and internationally recognised OECD rules."

Other large international companies have also been accused of avoiding tax in the UK.

A four-month investigation by news agency Reuters earlier this week found that Starbucks generated £398m in UK sales last year but paid no corporation tax.

It said that Starbucks had made over £3bn in UK sales since 1998 but had paid less than 1% in corporation tax.

Facebook UK paid £238,000 in tax last year, according to its accounts. Its sales were £20.4m. Most of the company's income is believed to be legally going through its European base in Dublin, where corporation tax is lower than in the UK.

And a report in the Guardian in April said that online retailer DODGY TAX AVOIDERS had generated sales of more than £7.6bn in the UK over the past three years but had not paid any corporation tax on the profits from those sales.

So thats Ebay, DODGY TAX AVOIDERS, Ebay and Starbucks all avoiding most of their UK tax bills.

Disgusting.

GRrrrrr!

who owns them all

We need to be clear that the fault/blame here does not lie with the companies in question. It lies with the governments both in the UK and in other countries.

For example if the UK tax rate is 25% but the Irish rate is 15% then it makes perfect sense for a coffee shop to buy its beans from an Irish sister company for a very high price, so high that the UK operation makes no profit what so ever. The Irish bean selling business makes a lot of profit, selling such expensive beans - and pays the 15% tax due.

The problem here is the tax regimes are national yet large companies are transnational. Governments could fix this by harmonising tax rates or by intercepting transnational financial flows.

Could not have put it better!

Everyone avoids tax including P'sers. Isa, pension saving, home-brew, charity shops, working part time to become a bit more self sufficient, contracting with your spouse on generous terms, stopping smoking, driving less, cycling are all effective tax avoidance schemes.

stumuzz wrote:Could not have put it better!

Everyone avoids tax including P'sers. Isa, pension saving, home-brew, charity shops, working part time to become a bit more self sufficient, contracting with your spouse on generous terms, stopping smoking, driving less, cycling are all effective tax avoidance schemes.

You are right S. Most, but not all, humans do try to avoid paying tax as much as they are able. That's just human nature. The fact is, though, ordinary citizens' capacity to avoid paying tax is limited, whereas the capacity of large multinational corporations to avoid paying tax is vast and so it is the proper job of governments to enact legislation to make it difficult for them to do so.

An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes. If governments refuse, they threaten to take their operations elsewhere with all of the negative macro economic consequences that would ensue. Where blackmail fails, they will use sweeteners whereby high ranking government officials are given juicy positions as sleeping board members on multinationals after retirement (or even during tenure) from political office.

And so we are where we are. Which is an impasse. Governments must give in to multinationals' demands in a way that undermines the entire democratic process, while at the same same trying to give the false impression to the average citizen that they are actually doing something to stop the multinationals from getting away with it. Consequently, nobody believes in the democratic process any more and the mass of ordinary citizens are becoming progressively pissed off about everything.

Something is going to give. The riots and other social unrest occurring all over Europe and elsewhere around the world are a part of that.

stumuzz wrote:Could not have put it better!

Everyone avoids tax including P'sers. Isa, pension saving, home-brew, charity shops, working part time to become a bit more self sufficient, contracting with your spouse on generous terms, stopping smoking, driving less, cycling are all effective tax avoidance schemes.

yes but most of what you've outlined has an agreed upside in a way that corporate tax avoidance doesn't. ISAs and pension savings benefit the individual by providing income in later life and avoiding deprivation at an individual level, and by making investment funds available; charity shops provide income for socially useful organisations, stopping smoking and cycling improve health and reduce the burden on health services, driving less reduces the costs of congestions. I'm not sure what you mean by "contracting with your spouse".

Corporate tax avoidance is malign and damaging. It should be pursued diligently and responsibly. If DODGY TAX AVOIDERS or Starbucks find their tax burden too onerous in the UK they are free to exit the market. Fact is, they won't, and HMRC has been too underfunded and demoralised to be able to hold their feet to the fire in the same way they would if you or I decided to dodge our obligations.

stevecook172001 wrote:

stumuzz wrote:Could not have put it better!

Everyone avoids tax including P'sers. Isa, pension saving, home-brew, charity shops, working part time to become a bit more self sufficient, contracting with your spouse on generous terms, stopping smoking, driving less, cycling are all effective tax avoidance schemes.

You ae right S. Most, but not all humans do try to avoid paying tax as much as they are able. That's just human nature. The fact is, though, ordinary citizens' capacity to avoid paying tax is limited, whereas the ability of large multinational corporations is vast and so it is the proper job of governments to enact legislation to make it difficult for them to avoid paying tax.

An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes. If governments refuse, they threaten to take their operations elsewhere with all of the negative macro economic consequences that would ensue. Where blackmail fails, they will use sweeteners whereby high ranking government officials are given juicy positions as sleeping board members on multinationals after retirement (or even during tenure) from political office.

And so we are where we are. Which is an impasse. Governments must give in to multinationals' demands in a way that undermines the entire democratic process, while at the same same trying to give the false impression to the average citizen that they are actually doing something to stop the multinationals from getting away with it. Consequently, nobody believes in the democratic process any more and the mass of ordinary citizens are becoming progressively pissed off about everything.

Something is going to give. The riots and other social unrest occurring all over Europe and elsewhere around the world are a part of that.

Excellent.
I'm going to cut and paste this the next time someone tries to defend the tax dodging bastards in this country.

frank_begbie wrote:

stevecook172001 wrote:

stumuzz wrote:Could not have put it better!

Everyone avoids tax including P'sers. Isa, pension saving, home-brew, charity shops, working part time to become a bit more self sufficient, contracting with your spouse on generous terms, stopping smoking, driving less, cycling are all effective tax avoidance schemes.

You ae right S. Most, but not all humans do try to avoid paying tax as much as they are able. That's just human nature. The fact is, though, ordinary citizens' capacity to avoid paying tax is limited, whereas the ability of large multinational corporations is vast and so it is the proper job of governments to enact legislation to make it difficult for them to avoid paying tax.

An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes. If governments refuse, they threaten to take their operations elsewhere with all of the negative macro economic consequences that would ensue. Where blackmail fails, they will use sweeteners whereby high ranking government officials are given juicy positions as sleeping board members on multinationals after retirement (or even during tenure) from political office.

And so we are where we are. Which is an impasse. Governments must give in to multinationals' demands in a way that undermines the entire democratic process, while at the same same trying to give the false impression to the average citizen that they are actually doing something to stop the multinationals from getting away with it. Consequently, nobody believes in the democratic process any more and the mass of ordinary citizens are becoming progressively pissed off about everything.

Something is going to give. The riots and other social unrest occurring all over Europe and elsewhere around the world are a part of that.

Excellent.
I'm going to cut and paste this the next time someone tries to defend the tax dodging bastards in this country.

Cheers Frank, your'e welcome.

stevecook172001 wrote: The fact is, though, ordinary citizens' capacity to avoid paying tax is limited, whereas the capacity of large multinational corporations to avoid paying tax is vast and so it is the proper job of governments to enact legislation to make it difficult for them to do so.

Agreed. Close down clever business models ( remember starbucks did not evade tax, they arranged their business model not to attract tax) but be prepared to see corporations move to a country that will prostitute itself. Ireland being a whore of country attracts every tax dodging parasite corporation.

stevecook172001 wrote: An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes.

Agreed again. This will get much worse now that politicians are stopped from fiddling their expenses to make up for tiny salaries. It made me shudder to see the chancellor of the exchequer trying to blag a first class seat because he could not claim the upgrade back. How easy will it be to bribe politicians now? We have now got the politicians we deserve.
An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes.

stevecook172001 wrote:
Something is going to give. The riots and other social unrest occurring all over Europe and elsewhere around the world are a part of that.

Maybe Johhny foreigner will riot. Britain has too much drizzle for revolutions.

stumuzz wrote:

stevecook172001 wrote: The fact is, though, ordinary citizens' capacity to avoid paying tax is limited, whereas the capacity of large multinational corporations to avoid paying tax is vast and so it is the proper job of governments to enact legislation to make it difficult for them to do so.

Agreed. Close down clever business models ( remember starbucks did not evade tax, they arranged their business model not to attract tax) but be prepared to see corporations move to a country that will prostitute itself. Ireland being a whore of country attracts every tax dodging parasite corporation.

stevecook172001 wrote: An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes.

Agreed again. This will get much worse now that politicians are stopped from fiddling their expenses to make up for tiny salaries. It made me shudder to see the chancellor of the exchequer trying to blag a first class seat because he could not claim the upgrade back. How easy will it be to bribe politicians now? We have now got the politicians we deserve.
An even bigger problem arises when multinationals use their vast financial power to lobby governments and, even, blackmail them into providing ever more loop-holes in their tax systems for them to avoid paying taxes.

stevecook172001 wrote:
Something is going to give. The riots and other social unrest occurring all over Europe and elsewhere around the world are a part of that.

Maybe Johhny foreigner will riot. Britain has too much drizzle for revolutions.

It's not drizzle that stops Englishmen from fomenting revolution. Russia is quite drizzly, as I recall. What stops Englishmen from revolting is the English-elite-engineered cultural response to the French revolution. A cultural response, though it persists to this day, that is weakening.

I cant say that it makes my blood boil.
It is sound business sense to minimise tax bills, just as they would seek to minimise energy bills and other expenses.
Not many individualls voluntarliy pay more tax then they need to, and the position is is no different with companies.

Whilst the traditional cry of the left is to "tax the rich fat cat bastards", this does not work in the modern world as the wicked rich fat cats (both busineses and individuals) are very mobile and can easily relocate to a lower tax location.

I dont think that taxing companies to the extent that they move really helps.

I would favour LOWER, and simpler corporartion taxes in order that companies might choose to locate themselves in the UK.

adam2 wrote:I cant say that it makes my blood boil.
It is sound business sense to minimise tax bills, just as they would seek to minimise energy bills and other expenses.
Not many individualls voluntarliy pay more tax then they need to, and the position is is no different with companies.

Whilst the traditional cry of the left is to "tax the rich fat cat bastards", this does not work in the modern world as the wicked rich fat cats (both busineses and individuals) are very mobile and can easily relocate to a lower tax location.

I dont think that taxing companies to the extent that they move really helps.

I would favour LOWER, and simpler corporation taxes in order that companies might choose to locate themselves in the UK.

I wonder, would you have a similar laissez-faire attitude regarding this issue if the boot were on the other foot? In other words your logic is, presumably, predicated not on principle but on the brute pragmatic reality that since multinationals have massive power and they will exert it, the government should simply accept the reality of that power and seek to accomodate their demands rather than stand up to them. How, then, would you feel if the ordinary general labour-force of this country downed tools, took to the streets and occupied various key locations of the state until they brought the government to its knees and to the negotiation table such that they were forced to submit to significantly improved terms and conditions for workers than is currently the case.

Your logic, if it is consistent, would imply you would have no problem at all with the above. Brute power is, after all, the only thing that matters, right?

If you would have a problem, however, maybe you could explain the logical inconsistency?

It should make your blood boil. Every pound of tax avoided by corporations has to be either borrowed or taxed from somebody else.

There is a simple way to prevent it, tax off shore money movements at the tax rate AS THEY ARE TRANSFERRED, but the Free Marketeers and their cronies would end up paying some tax so it'll never happen.

If a company can turn over £3bn and pay next to no tax then either it's not a viable business or there's effectively fraud going on.

Lowering taxes until companies stop whingeing is not a good long-term strategy. Because everybody else is going to do the same.

We should make them pay the tax, because the country, let's face it, does still provide rather a good business environment. Timezone, language, stability; educating, looking-after (and until recently helping to house) the labour-force; laws that for the most part actually work, infrastructure ditto.

Letting people get away with schemes of dubious morality just because they're "clever" sets an interesting precedent and all...

stevecook172001 wrote: It's not drizzle that stops Englishmen from fomenting revolution. Russia is quite drizzly, as I recall. What stops Englishmen from revolting is the English-elite-engineered cultural response to the French revolution. A cultural response, though it persists to this day, that is weakening.

The british do not do revolution. The last we had was a quiet bloodless glorious one about 324 years ago. Even that one, most of the populous didn’t have a clue what was going on.
As someone who spends a good chunk of the winter in North Africa, Mediterranean or Canaries, I know for a fact that riots, public order(usually means public disorder) and protests occur on warm muggy early evenings after a bored day when the male youth of the vicinity have some spare time on their hands.

The French revolution was a linguistic battle as much as a pecuniary battle. What we consider the French language today was the language of the Louis court at Versailles. The ‘Plebs’ mostly spoke parochial Gallic languages.

stevecook172001 wrote:
Your logic, if it is consistent, would imply you would have no problem at all with the above. Brute power is, after all, the only thing that matters, right?

The ‘ power’ of the corp’s is the power of the people. Brute force has nothing to do corporatism. Who forces you to buy an iphone or drink coca cola? These are popular acivities enjoyed by the masses. Your pound is your vote. The corporations only exist because we allow them. If you think the corporations are deleterious, don’t buy their stuff.

sleeperservice wrote: Every pound of tax avoided by corporations has to be either borrowed or taxed from somebody else.

Or not taxed! Why should we borrow to pay for community youth ‘leaders’ or ‘cultural development officers’? Try taxing less, putting more money in pockets.

RenewableCandy wrote: Letting people get away with schemes of dubious morality just because they're "clever" sets an interesting precedent and all.

The clever business ideas benefit us all. The siri function on iphone 5 connected to the in-car system so you can drive-give instructions-talk-network-earn is a vast improvement on the BT 12 week waiting list for a party line telephone that eventually got installed in the hallway if you were lucky.