MPs condemn Amazon executive over tax payments

[mattx]

I no longer purchase anything from them. Won't make a difference but it will make me feel better.

 

BBC News - MPs condemn Amazon executive over tax payments

 

And at last it's good to see Margaret Hodge give some lip back. Toffy Eton Posh Boy 'Hug A Hoodie' Dave could learn a thing or two.

Edited November 12, 2012 by mattx

[Flatpackhamster]

I no longer purchase anything from them. Won't make a difference but it will make me feel better.

 

BBC News - MPs condemn Amazon executive over tax payments

 

And at last it's good to see Margaret Hodge give some lip back. Toffy Eton Posh Boy 'Hug A Hoodie' Dave could learn a thing or two.

 

Is that The Rt Hon Lady Hodge, whose family company paid 0.01% tax on its revenues in the UK last year?

 

Thank goodness we've got The Rt Hon Lady Hodge, privately educated daughter of steel magnate Hans Oppenheimer, dealing with this instead of 'Toffy Eton Posh Boy Dave' with his wealthy background and private education. We certainly dodged a bullet there!

[jinnantonnixx]

Is that The Rt Hon Lady Hodge, whose family company paid 0.01% tax on its revenues in the UK last year?

 

 

It is indeed. There was an article in (I think) the Independent about her and her low-tax business interests. There certainly seems to be parallels with the pot/kettle hue comparison scenario.

 

I don't understand how MPs think they're up to the job of grilling these characters. They couldn't grill a sausage.

Edited November 13, 2012 by jinnantonnixx

[Pyroman]

It is indeed. There was an article in (I think) the Independent about her and her low-tax business interests. There certainly seems to be parallels with the pot/kettle hue comparison scenario.

 

I don't understand how MPs think they're up to the job of grilling these characters. They couldn't grill a sausage.

 

I thought they did a poor job of asking questions, to be fair i only saw half of the amazon bloke and the google bloke but the google bloke was completely up front and they didn't ask follow up questions they just kept intentionally "not getting it" and asking the same questions. From what i understand they don't sell the advertising in the UK they sell it in ireland do what they should have been asking is when someone makes a purchase are they making it from Google Ireland and then where that money ends up. I loved that google UK income is payed from google ireland for "services" and i understand the argument that "the R&D and engineers are in america" but the SALES of advertising are in the UK even if they are actually bought from google ireland the sale itself is by a UK company in the UK

[zag]

I really don't see the problem here. I'm not a tax expert but as far as I'm aware corporation tax is based on profits and has nothing to do with turnover.

 

Profits can be moved all around the world perfectly legally, I don't believe there is any law stopping it.

[jinnantonnixx]

I really don't see the problem here. I'm not a tax expert but as far as I'm aware corporation tax is based on profits and has nothing to do with turnover.

 

Profits can be moved all around the world perfectly legally, I don't believe there is any law stopping it.

 

True. But it's all rabbit out of the hat stuff. Starbucks buys its coffee from..... Starbucks in Switzerland! In the meantime, domestic, non-multinational companies are stumping up tax to pay for the NHS, police, etc, while savvy multinationals are avoiding it.

Edited November 13, 2012 by jinnantonnixx

[zag]

I could understand the outrage if these were English companies trying to avoid tax. But they are not, all are American I think.

[Michael]

What I find stupid about all this, is HMRC receive a breakdown of finances of all UK companies as required by law. Instead of naming and shaming they just need to tighten up the rules accountants can apply on behalf of these companies.

 

There does seem to be a familar pattern emerging. Problems with banks - lack of regulation, problems with companies declaring their finances - lack of regulation, MPs abusing their expenses - lack of regulation.

 

If the Government were seriously bothered about this, they could sort it out very quickly. Every year HMRC publish new tax codes due to changes of the tax system (by the Chancellor) and all companies and accountants receive this through the post.

 

Naming and shaming will do absolutely nothing in the longterm. If the Government 'properly' sorted out the tax system, we'd have something more interesting to read about in the press!

[localzuk]

I could understand the outrage if these were English companies trying to avoid tax. But they are not, all are American I think.

 

Nope. They are English companies. Starbucks in the UK is 'Starbucks Coffee Company UK Ltd' for example. So, it is a company registered in the UK at Companies House.

 

The issue is the clever fiddling of books so the 'license' they pay to use the name 'Starbucks' covers the profits they've made in the UK.

[CyberNerd]

What I find stupid about all this, is HMRC receive a breakdown of finances of all UK companies as required by law. Instead of naming and shaming they just need to tighten up the rules accountants can apply on behalf of these companies.

 

There does seem to be a familar pattern emerging. Problems with banks - lack of regulation, problems with companies declaring their finances - lack of regulation, MPs abusing their expenses - lack of regulation.

 

If the Government were seriously bothered about this, they could sort it out very quickly. Every year HMRC publish new tax codes due to changes of the tax system (by the Chancellor) and all companies and accountants receive this through the post.

 

Naming and shaming will do absolutely nothing in the longterm. If the Government 'properly' sorted out the tax system, we'd have something more interesting to read about in the press!

 

Indeed. It's not the companies fault that they are paying a low tax rate, that is their prerogative.

Any criticism should be leveled at Government for allowing the situation.

[witch]

Indeed. It's not the companies fault that they are paying a low tax rate, that is their prerogative.

Any criticism should be leveled at Government for allowing the situation.

 

Absolutely. They need to target tax avoidance and close the loopholes. After all, if you were asked whether you wanted to avoid tax legally, would you want to? I know I would!

[jinnantonnixx]

Indeed. It's not the companies fault that they are paying a low tax rate, that is their prerogative.

Any criticism should be leveled at Government for allowing the situation.

 

I'd go further - it's the company's obligation to the shareholders to minimise the tax exposure through any legal means.

[localzuk]

I'd go further - it's the company's obligation to the shareholders to minimise the tax exposure through any legal means.

 

Not in the UK it isn't. However, in the USA it is. It is a legal requirement for them to make as much money as possible.

[Michael]

This is why the Government's approach is totally wrong. The rules, regulations etc... are there in black and white and any good accountant should know them all. All the Government need to do is to properly re-write the rules, issue new tax codes come April 2013 (as they will anyway) and be done with it.

 

All this faffing around is just wasting time and won't generate higher revenues. Statistically, there have been more UK Ltd Company registrations in the past 2/3 years then ever recorded before. All these companies will apply the existing tax regulations unless HMRC and George Osbourne get together and properly resolve these issues.

[broc]

Global companies have been moving profit & business costs around for years to avoid taxes, unfortunately it is legal & there is nothing that can be done to fix it under current laws. There is no point in appealing to their conscience or arguing that companies have a moral responsibility..... companies don't have either.

 

In a previous life when I worked for a 'large' global computer company, components & assemblies for our products would be moved from country to country, effectively transferring asset value by taking advantage of exchange rates, or local tax rates. You simply set an internal price for parts, assemblies, labour costs & cross charged these to other subsidiaries. Ultimately the goal was to make the profits in the countries where corporate taxes were lowest and inflate costs that could be offset against taxes where the corporate taxes were highest.

 

This is not a new phenomenon....

[pcstru]

I really don't see the problem here. I'm not a tax expert but as far as I'm aware corporation tax is based on profits and has nothing to do with turnover.

 

Profits can be moved all around the world perfectly legally, I don't believe there is any law stopping it.

 

While it is not illegal, it is a problem for local small businesses, who can't spend thousands on expert tax loophole advisor and so end up unable to compete on an equal footing. Markets should be fair.

[broc]

Small businesses can never compete head-to-head with large global companies; they need to differentiate and provide customised & tailored products & services that the big companies aren't interested in.

 

Markets are never fair, & never will be. You cannot legislate fairness..................

[titch]

Whilst I understand why companies do it...and don't personally see the point of the inquiry unless they are willing to change the tax laws, I dont think you can excuse something "just because it is legal".

 

If tomorrow murder was made legal for the day, it wouldn't make it O.K to finish off the lady in Tesco who is taking too long at the self service check out. The same applies to tax avoidance in my opinion. Its scummy and if everyone did it our Country would be in much more of a mess than it is..FACT

[witch]

Whilst I understand why companies do it...and don't personally see the point of the inquiry unless they are willing to change the tax laws, I dont think you can excuse something "just because it is legal".

 

If tomorrow murder was made legal for the day, it wouldn't make it O.K to finish off the lady in Tesco who is taking too long at the self service check out. The same applies to tax avoidance in my opinion. Its scummy and if everyone did it our Country would be in much more of a mess than it is..FACT

You are confusing morality with legality.

So, you are really saying that putting money in an ISA, which isnt taxed and is therefore a legal tax avoidance, is morally reprehensible and you would never do it?

[LeMarchand]

If tomorrow murder was made legal for the day, it wouldn't make it O.K to finish off the lady in Tesco who is taking too long at the self service check out. The same applies to tax avoidance in my opinion. Its scummy and if everyone did it our Country would be in much more of a mess than it is..FACT

 

Exactly! Assuming those "It's OK to use a bow to shoot a Welsh/French man in town x" laws aren't all made up, it doesn't mean people should sit there with a longbow hoping to be able to murder someone.

 

If "Have I Got News For You" the other week was accurate, Costa managed to pay a much more reasonable amount of tax than Starbucks. They are a "British" multinational, though.

 

If the "make as much money as possible" ethos is actually a legal requirement in the US, how do they justify having offices that are anything but basic, or the salaries/perks of executives? How are lawyers allowed to work pro bono?

[pcstru]

Small businesses can never compete head-to-head with large global companies; they need to differentiate and provide customised & tailored products & services that the big companies aren't interested in.

Small companies can compete. Differentiation is as you suggest, the basis of almost any competition, but if one company is paying no tax while the other has no choice, then the cards are being stacked unfairly.

 

Markets are never fair, & never will be. You cannot legislate fairness..................

 

Legalising 'fairness' lies at the heart of almost any regulatory framework. If we didn't try and legalise fairness, then we wouldn't bother to have any consumer protection law, any insider trading laws etc etc.

[CyberNerd]

Small companies can compete. Differentiation is as you suggest, the basis of almost any competition, but if one company is paying no tax while the other has no choice, then the cards are being stacked unfairly.

 

The fairest thing would be for these small companies to actually start offshoring their firms and avoid paying corporation tax themselves.

If it was done on a really epic scale by everyone then the Govt. would soon change the rules.

[pcstru]

The fairest thing would be for these small companies to actually start offshoring their firms and avoid paying corporation tax themselves.

If it was done on a really epic scale by everyone then the Govt. would soon change the rules.

 

Ha! I was thinking much the same. We should all become more like the Italians, were avoiding paying Tax is almost a national sport. Of course, as soon as the little people start playing that game, governments soon take notice. IR35 anyone?

Edited November 13, 2012 by pcstru

[mattx]

Amazon, Google and Starbucks are struggling to defend their tax avoidance | Richard Murphy | Comment is free | guardian.co.uk

 

Quite a good but small article.

[broc]

The problem any Govt faces is that corporate tax avoidance is a global problem; Global companies transfer asset value, jobs & profit to wherever they get the best 'deal'. As countries all over the world operate with different tax rules it is difficult to see how you could legislate without agreement internationally. The same goes for financial regulation with things like financial transaction taxes. Taxes on sales simply get passed on to the consumer. It made me laugh when a spokesperson for one of the major coffee house chains said they paid their taxes & as an example quoted how much VAT they handed over to HMRC.....

 

There was a lengthy article in the press about the water companies & the massive dividends they were paying to their 'owners'.... mostly venture capitalists. The water companies claim they cannot afford to invest without massive increases in customer charges at the same time as they are handing over huge sums of money to their executives & shareholders.

 

Water companies pay little or no tax on huge profits | Business | The Observer