To the best of my knowledge I have never purchased anything from Google. I choose to use it's free search engine and am not greatly bothered by it's advertising or the fact that it gathers information on my searches to sell to people I won't be buying from.
I am not familiar with it's business model as I'm not in the advertising business so it's not altogether clear to me why Google should be paying gazillions in UK Corporation tax. Starbucks on the other hand is selling coffee on every high street and I see no reason why it's posits are not taxed by reference to it's turnover and normal margins. Transfer pricing legislation already empowers HM RC to do this.
I don't use Starbucks. I don't consider using Googles search engine is supporting tax avoidance - am I wrong??
Here is your answer Bryan. Google will trouser £3,000,000,000 in UK advertising sales in 2015, (and Facebook will do another billion). Ad spend on TV will be £5.3billion but this will be shared out between the ITV companies , Sky, C4 C5 and small players. That is how big Google is as a seller of advertising. Now wonder they let you search for free :-)
To the best of my knowledge I have never purchased anything from Google. I choose to use it's free search engine and am not greatly bothered by it's advertising or the fact that it gathers information on my searches to sell to people I won't be buying from.
I am not familiar with it's business model as I'm not in the advertising business so it's not altogether clear to me why Google should be paying gazillions in UK Corporation tax. Starbucks on the other hand is selling coffee on every high street and I see no reason why it's posits are not taxed by reference to it's turnover and normal margins. Transfer pricing legislation already empowers HM RC to do this.
I don't use Starbucks. I don't consider using Googles search engine is supporting tax avoidance - am I wrong??
Here is your answer Bryan. Google will trouser £3,000,000,000 in UK advertising sales in 2015, (and Facebook will do another billion). Ad spend on TV will be £5.3billion but this will be shared out between the ITV companies , Sky, C4 C5 and small players. That is how big Google is as a seller of advertising. Now wonder they let you search for free :-)
Google recently bought a company called Boston Dynamics. They build artificial intelligence and robots for the armed forces. Interesting purchase for a search engine/media group
Tax avoidance is a symptom of a badly designed tax system and there are few countries where the tax system is as needlessly complicated or inefficient as the UK's. A large enough company can find itself and its employees subject to hundreds of different taxes, depending on the areas it deals with. The end result is they pay people smart enough to understand the tax system to streamline their revenue streams so they pay as few taxes as possible (i.e. so they don't needlessly pay the same tax twice or two different taxes on the same transaction or revenue stream), and they pay these people far more than HMRC ever could. The end result is that HMRC have to enforce a tax regime that not a single person in their understaffed organisation understands. Ethics and morality simply doesn't come into it: the boardrooms of Google and Starbucks aren't filled with goateed men with red pitchforks putting out their cigars in the eyes of disabled homeless people, despite the image that some people in the media and this thread are attempting to paint. Most boardroom execs are figureheads or business leaders who will simply do what their tax accountants tell them to do. I'm pretty sure the head of Starbucks doesn't pour over the last 5 years of tax paid, he probably pays people to do that for him.
Simplify the tax system, get rid of the taxes that the rich and powerful ignore (e.g. inheritance, CGT, stamp duty), don't introduce taxes that the rich will ignore and will be stupidly difficult to enforce (e.g. the mansion tax), merge together taxes that are essentially taxes on the same source (e.g. income and NI) and enforce simple taxes where audit trails are legally required and therefore entry-level auditors at the HMRC are able to investigate. Our tax system is also hopelessly outdated and it barely takes into account the globalised economy or the fact that people are able to easily buy and sell stuff online through outlets that are not based in the UK, and therefore needs to be updated to capture transactions that pretty much physically take place entirely in this country but legally take place in Luxembourg or Guernsey.
Tax avoidance is a symptom of a badly designed tax system and there are few countries where the tax system is as needlessly complicated or inefficient as the UK's. A large enough company can find itself and its employees subject to hundreds of different taxes, depending on the areas it deals with. The end result is they pay people smart enough to understand the tax system to streamline their revenue streams so they pay as few taxes as possible (i.e. so they don't needlessly pay the same tax twice or two different taxes on the same transaction or revenue stream), and they pay these people far more than HMRC ever could. The end result is that HMRC have to enforce a tax regime that not a single person in their understaffed organisation understands. Ethics and morality simply doesn't come into it: the boardrooms of Google and Starbucks aren't filled with goateed men with red pitchforks putting out their cigars in the eyes of disabled homeless people, despite the image that some people in the media and this thread are attempting to paint. Most boardroom execs are figureheads or business leaders who will simply do what their tax accountants tell them to do. I'm pretty sure the head of Starbucks doesn't pour over the last 5 years of tax paid, he probably pays people to do that for him.
Simplify the tax system, get rid of the taxes that the rich and powerful ignore (e.g. inheritance, CGT, stamp duty), don't introduce taxes that the rich will ignore and will be stupidly difficult to enforce (e.g. the mansion tax), merge together taxes that are essentially taxes on the same source (e.g. income and NI) and enforce simple taxes where audit trails are legally required and therefore entry-level auditors at the HMRC are able to investigate. Our tax system is also hopelessly outdated and it barely takes into account the globalised economy or the fact that people are able to easily buy and sell stuff online through outlets that are not based in the UK, and therefore needs to be updated to capture transactions that pretty much physically take place entirely in this country but legally take place in Luxembourg or Guernsey.
Cabbles Mrs is soon to be leaving WPP,Sorrell's group because she is being paid well below market rate.
Huge coporations that are legally diverting taxes into Ireland and Luxemborg as well as paying below the living wage are harming the U.K. Economy. The U.K. Government is paying out benefits to subsidise low paid workers, it's a nonsense and being on a low wage means that disposable income is limited and this doesn't stimulate growth or improve the economy.
Would big corporations leave the U.K. if more stringent tax laws were imposed on them.
Tax avoidance is a symptom of a badly designed tax system and there are few countries where the tax system is as needlessly complicated or inefficient as the UK's. A large enough company can find itself and its employees subject to hundreds of different taxes, depending on the areas it deals with. The end result is they pay people smart enough to understand the tax system to streamline their revenue streams so they pay as few taxes as possible (i.e. so they don't needlessly pay the same tax twice or two different taxes on the same transaction or revenue stream), and they pay these people far more than HMRC ever could. The end result is that HMRC have to enforce a tax regime that not a single person in their understaffed organisation understands. Ethics and morality simply doesn't come into it: the boardrooms of Google and Starbucks aren't filled with goateed men with red pitchforks putting out their cigars in the eyes of disabled homeless people, despite the image that some people in the media and this thread are attempting to paint. Most boardroom execs are figureheads or business leaders who will simply do what their tax accountants tell them to do. I'm pretty sure the head of Starbucks doesn't pour over the last 5 years of tax paid, he probably pays people to do that for him.
Simplify the tax system, get rid of the taxes that the rich and powerful ignore (e.g. inheritance, CGT, stamp duty), don't introduce taxes that the rich will ignore and will be stupidly difficult to enforce (e.g. the mansion tax), merge together taxes that are essentially taxes on the same source (e.g. income and NI) and enforce simple taxes where audit trails are legally required and therefore entry-level auditors at the HMRC are able to investigate. Our tax system is also hopelessly outdated and it barely takes into account the globalised economy or the fact that people are able to easily buy and sell stuff online through outlets that are not based in the UK, and therefore needs to be updated to capture transactions that pretty much physically take place entirely in this country but legally take place in Luxembourg or Guernsey.
I was all for merging income tax and NI when I worked. Now I don't and guess what I'm not so keen. It was I think a Ukip policy that got droppped when they realised it would lose 100% of the pensioners' votes. That's why taxing companies is such a good wheeze - they don't get to vote.
Another issue is surely that if you have a free movement of goods between countries as the EU has then how can corporation tax rates be decided nationally? So Ireland with a 12.5% Corporation tax can be the European base for any Non-EU company and trade freely with the UK who has a 20%(I think) corp tax.
Quite right @sethplum and from where does the new breed of corporate super-avoiders come from? The USA. Question for @LenGlover . Which country provides for you a better example of a state which looks after the interests of a broad range of citizens - the US , or Germany?
That's an impossible question to answer! Are we talking purely taxation or generally? Americans see themselves as the world's policemen protecting countries from terrorism etc, etc. Others perceive their interference as the cause of much of the trouble. Both viewpoints are held by a broad range of citizens. Germany sees itself as head of the EU yet significant numbers within both Germany and the rest of the EU are thoroughly disillusioned with it.
However attitudes to taxation are determined as much by the perception of people as the facts and in general Americans tend to be more patriotic (detractors would say insular) and thus accepting of their government regardless of the opinion of outsiders. Hence even those one would expect to feel disenfranchised tend not to from my admittedly limited knowledge.
Germans have traditionally had a similarly patriotic attitude to their leaders but, from talking to Germans I know, there is a growing disenchantment with the EU at the grassroots in Germany (and many other EU countries too) and resentment at the cost or perceived costs of the EU and thus a growing resentment of taxes being levied to pay for it given that Germany is number one contributor.
To reiterate, looking purely at taxation, it's as much about perception as actuality.
Tax avoidance is a symptom of a badly designed tax system and there are few countries where the tax system is as needlessly complicated or inefficient as the UK's. A large enough company can find itself and its employees subject to hundreds of different taxes, depending on the areas it deals with. The end result is they pay people smart enough to understand the tax system to streamline their revenue streams so they pay as few taxes as possible (i.e. so they don't needlessly pay the same tax twice or two different taxes on the same transaction or revenue stream), and they pay these people far more than HMRC ever could. The end result is that HMRC have to enforce a tax regime that not a single person in their understaffed organisation understands. Ethics and morality simply doesn't come into it: the boardrooms of Google and Starbucks aren't filled with goateed men with red pitchforks putting out their cigars in the eyes of disabled homeless people, despite the image that some people in the media and this thread are attempting to paint. Most boardroom execs are figureheads or business leaders who will simply do what their tax accountants tell them to do. I'm pretty sure the head of Starbucks doesn't pour over the last 5 years of tax paid, he probably pays people to do that for him.
Simplify the tax system, get rid of the taxes that the rich and powerful ignore (e.g. inheritance, CGT, stamp duty), don't introduce taxes that the rich will ignore and will be stupidly difficult to enforce (e.g. the mansion tax), merge together taxes that are essentially taxes on the same source (e.g. income and NI) and enforce simple taxes where audit trails are legally required and therefore entry-level auditors at the HMRC are able to investigate. Our tax system is also hopelessly outdated and it barely takes into account the globalised economy or the fact that people are able to easily buy and sell stuff online through outlets that are not based in the UK, and therefore needs to be updated to capture transactions that pretty much physically take place entirely in this country but legally take place in Luxembourg or Guernsey.
I was all for merging income tax and NI when I worked. Now I don't and guess what I'm not so keen. It was I think a Ukip policy that got droppped when they realised it would lose 100% of the pensioners' votes. That's why taxing companies is such a good wheeze - they don't get to vote.
If a merger was done in such a way that it would protect the benefits of those who had contributed under the current system then I can't see how pensioners would have issue with it? NI is a dead duck anyway and there is growing support for the argument to fold it into income tax.
NI will never merger with income tax. Governments spread their tax risks not put them all in one basket. Complete non starter.
Actually the Coalition seriously considered beginning to implement this merger this year and were only deterred because the project would likely be lengthy and complicated and not ideal to carry out in the months before a general election. Not sure what 'tax risks' you're referring to, since people generally pay NI at the same time they pay their income tax.
The coalistion consiered it and were only put off when they realised it would never happen.
Brilliant. Can I borrow the keys to your time machine since you're finished? I want to go back a few decades and warn the government of a nasty chap called Hitler.
As someone like @Leroy Ambrose could probably testify - given he is an IT Boffin - the complexities of merging the NI and income tax systems would be a humongous job fraught with IT nightmares.
Just look at the massive IT debacles in recent years at the NHS and BBC - probably plenty in the private sector too - sometimes best to leave well alone....
Only reason NI and income tax are not combined is because it would increase headline rate of income tax. Also allows employers to be taxed for employing people. It's politics not common sense.
When I started out as an accountant for a large US multi-national, a lot of time and analysis was spent justifying the 'transfer value" of goods, services and charges ftom the overseas parent.. A quick google seems to show that this is a redundant concept. When did HMRC drop it? Did MPs approve the change?
Only reason NI and income tax are not combined is because it would increase headline rate of income tax. Also allows employers to be taxed for employing people. It's politics not common sense.
I'm far from being an expert but that is my view too
When I started out as an accountant for a large US multi-national, a lot of time and analysis was spent justifying the 'transfer value" of goods, services and charges ftom the overseas parent.. A quick google seems to show that this is a redundant concept. When did HMRC drop it? Did MPs approve the change?
In the past I spent a lot of time in Germany working for a multinational and 'transfer value' / 'tax implications' were a big thing at the time ...possibly still are.
Transfer pricing. Still relevant. Intra-group balance transfers should be priced as though they were undertaken on an arms length basis.
Therefore almost impossible to apply consistently. What's arms length when you are talking about multi-national behemoths?
IMO, TP is about as complicated as it gets in terms of understanding what the correct tax position should be for a given scenario. Heavyweight forensic accountants can usually justify 2 completely different results due to so many of the elements of TP accounting being totally subjective.
TP is to stop the hoarding of profits in low tax domiciles. Due to the fractured nature of the transactions it has to regulate, it's almost impossible to stop clever corporates achieving some form of tax gain.
It's immoral not to pay tax in the domicile where the physical elements of a transaction primarily take place. But how can you legislate that simply? Certainly the "pick n mix" approach of OECD increases the opportunity for huge margins of variation.
I see a lot of complaints that the UK system is too complicated in design. Is it fook.
Compared to other countries it is very simple and we don't even have the split income tax (local, regional, national). I respect the viewpoints raised but totally disagree. Poor execution doesn't necessarily mean the logic was flawed. I'd like to hear why SDLT and CGT are "too complicated" and "irrelevant"?
The thread is called politics of tax but maybe you should add "morality and" at the beginning Because as long as you have state institutions taking on corporates in a fair fight, then the state will get its ass whipped. So it's a question of morality, how far are you willing to go in restricting free market principles? If a society sees avoidance as morally repugnant then HMRC is fixed overnight. We don't like such a stance in Britain but its for the masses to vote with their consumer choices if you really want to see a more socially responsible approach adopted.
I am now racing through a short e-book, "Over here and under taxed" by Richard Murphy. It is very readable and I'm happy that he describes the business of Google, Amazon and Starbucks pretty much exactly as I'd understood them. he also promises substantive ideas on how to address the situation. At the start, his own political perspective shows a bit, and that will not please the likes of @Fiiish, which is a pity because I find his detailed analysis pretty convincing and something of interest to those tending to the right as well as the left of the spectrum, (as well as odd people like me who feel lonely and misunderstood in the centre :-)).
Cheap as chips as an e-Book only £1.99, from ..er...Amazon :-)
I am now racing through a short e-book, "Over here and under taxed" by Richard Murphy. It is very readable and I'm happy that he describes the business of Google, Amazon and Starbucks pretty much exactly as I'd understood them. he also promises substantive ideas on how to address the situation. At the start, his own political perspective shows a bit, and that will not please the likes of @Fiiish, which is a pity because I find his detailed analysis pretty convincing and something of interest to those tending to the right as well as the left of the spectrum, (as well as odd people like me who feel lonely and misunderstood in the centre :-)).
Cheap as chips as an e-Book only £1.99, from ..er...Amazon :-)
Not sure why you need to single me out. I'm open to ideas from all sides of the political spectrum as long as they're sensible and provide real solutions. There's plenty of other posters on this forum who instantly shoot down something because it didn't come from their favourite newspaper. If you'd bothered to read my first post in this thread, I'm all for making the likes of Amazon and Starbucks pay their fair share and I'd imagine the solution to that would likely come from the left rather than the right.
I am now racing through a short e-book, "Over here and under taxed" by Richard Murphy. It is very readable and I'm happy that he describes the business of Google, Amazon and Starbucks pretty much exactly as I'd understood them. he also promises substantive ideas on how to address the situation. At the start, his own political perspective shows a bit, and that will not please the likes of @Fiiish, which is a pity because I find his detailed analysis pretty convincing and something of interest to those tending to the right as well as the left of the spectrum, (as well as odd people like me who feel lonely and misunderstood in the centre :-)).
Cheap as chips as an e-Book only £1.99, from ..er...Amazon :-)
Not sure why you need to single me out. I'm open to ideas from all sides of the political spectrum as long as they're sensible and provide real solutions. There's plenty of other posters on this forum who instantly shoot down something because it didn't come from their favourite newspaper. If you'd bothered to read my first post in this thread, I'm all for making the likes of Amazon and Starbucks pay their fair share and I'd imagine the solution to that would likely come from the left rather than the right.
And in turn, I don't have any problem if you do have a right wing perspective, if as you say above, we can agree that on this issue there is no need to be too tribal. Your remark
"the boardrooms of Google and Starbucks aren't filled with goateed men with red pitchforks putting out their cigars in the eyes of disabled homeless people, despite the image that some people in the media and this thread are attempting to paint"
did not fill me with optimism, but that's often how it goes in threads, emails etc, people misunderstand each other and make assumptions, and I'm as guilty as anyone else.
Comments
Skynet are the guys to go for with AI.
Simplify the tax system, get rid of the taxes that the rich and powerful ignore (e.g. inheritance, CGT, stamp duty), don't introduce taxes that the rich will ignore and will be stupidly difficult to enforce (e.g. the mansion tax), merge together taxes that are essentially taxes on the same source (e.g. income and NI) and enforce simple taxes where audit trails are legally required and therefore entry-level auditors at the HMRC are able to investigate. Our tax system is also hopelessly outdated and it barely takes into account the globalised economy or the fact that people are able to easily buy and sell stuff online through outlets that are not based in the UK, and therefore needs to be updated to capture transactions that pretty much physically take place entirely in this country but legally take place in Luxembourg or Guernsey.
"Google is a “media owner masquerading as a technology company.”"
Huge coporations that are legally diverting taxes into Ireland and Luxemborg as well as paying below the living wage are harming the U.K. Economy. The U.K. Government is paying out benefits to subsidise low paid workers, it's a nonsense and being on a low wage means that disposable income is limited and this doesn't stimulate growth or improve the economy.
Would big corporations leave the U.K. if more stringent tax laws were imposed on them.
That's why taxing companies is such a good wheeze - they don't get to vote.
However attitudes to taxation are determined as much by the perception of people as the facts and in general Americans tend to be more patriotic (detractors would say insular) and thus accepting of their government regardless of the opinion of outsiders. Hence even those one would expect to feel disenfranchised tend not to from my admittedly limited knowledge.
Germans have traditionally had a similarly patriotic attitude to their leaders but, from talking to Germans I know, there is a growing disenchantment with the EU at the grassroots in Germany (and many other EU countries too) and resentment at the cost or perceived costs of the EU and thus a growing resentment of taxes being levied to pay for it given that Germany is number one contributor.
To reiterate, looking purely at taxation, it's as much about perception as actuality.
Just look at the massive IT debacles in recent years at the NHS and BBC - probably plenty in the private sector too - sometimes best to leave well alone....
It's politics not common sense.
Therefore almost impossible to apply consistently. What's arms length when you are talking about multi-national behemoths?
IMO, TP is about as complicated as it gets in terms of understanding what the correct tax position should be for a given scenario. Heavyweight forensic accountants can usually justify 2 completely different results due to so many of the elements of TP accounting being totally subjective.
TP is to stop the hoarding of profits in low tax domiciles. Due to the fractured nature of the transactions it has to regulate, it's almost impossible to stop clever corporates achieving some form of tax gain.
It's immoral not to pay tax in the domicile where the physical elements of a transaction primarily take place. But how can you legislate that simply? Certainly the "pick n mix" approach of OECD increases the opportunity for huge margins of variation.
I see a lot of complaints that the UK system is too complicated in design. Is it fook.
Compared to other countries it is very simple and we don't even have the split income tax (local, regional, national). I respect the viewpoints raised but totally disagree. Poor execution doesn't necessarily mean the logic was flawed. I'd like to hear why SDLT and CGT are "too complicated" and "irrelevant"?
The thread is called politics of tax but maybe you should add "morality and" at the beginning
Because as long as you have state institutions taking on corporates in a fair fight, then the state will get its ass whipped. So it's a question of morality, how far are you willing to go in restricting free market principles? If a society sees avoidance as morally repugnant then HMRC is fixed overnight. We don't like such a stance in Britain but its for the masses to vote with their consumer choices if you really want to see a more socially responsible approach adopted.
Cheap as chips as an e-Book only £1.99, from ..er...Amazon :-)
"the boardrooms of Google and Starbucks aren't filled with goateed men with red pitchforks putting out their cigars in the eyes of disabled homeless people, despite the image that some people in the media and this thread are attempting to paint"
did not fill me with optimism, but that's often how it goes in threads, emails etc, people misunderstand each other and make assumptions, and I'm as guilty as anyone else.