'I think you DO do evil, using smoke and mirrors to avoid tax' This was the week when someone kicked Blighty's tax ant-hill and sent MPs and multinationals scurrying in all directions. The Public Accounts Committee called Google and its auditor Ernst & Young back to give more evidence about their British tax dealings, after a Reuters report suggested there might be "inconsistencies" in …
And complex international structures do strike me as a rather unethical way to get out of paying your fair share.
BUT - if it's going to change then the politicians need to figure out how they're going to change the law to prevent the various practices that brought us here. There's only so far you can get by haranguing people to obey the spirit as well as the letter of the law.
I would never seek to defend Google and their tax avoidance scams, but when faced with Margaret Hodge, especially in the mood she was yesterday, I really was waiting for them to retort with something about MPs having no right to talk about morals etc.etc.
I thought they showed great restraint when attacked by Hodge and called 'evil' etc.etc. How can a MP really start throwing sticks at Google and try taking the moral high ground? It's a bit like Hitler and Goebels calling each other the worst!! After all, what's worse; being entirely legal, but arguably not paying a 'moral' amount of tax, or claiming (not necessarily Hodge herself, but MPs in general) expenses to which your are not entitled, normally tens of thousands (some might call this theft or fraud and therefore a crime).
Hodge showed such high handed contempt, I would have gladly cheered Google on if they'd made some smart put down as anyone behaving like she did deserves a good slap regardless of the rights and wrongs. Especially as she is a member of parliament who writes the rules!! If they manager to manipulate those rules, why don't they simply change the rules? The bare faced cheek of the woman was beyond contempt.
I was thinking of using the Paris icon as whilst they don't in any way look alike, they probably are mentally on a par.
I find this particular dodge very interesting. Obviously its been working for years which makes me wonder about the case law behind it. I suspect at the moment its incumbent on HMRC to prove that the sale is not in fact Irish. If this is the case then a change in laws would be worth far more than this grandstanding.
Of course actually having a responsible discussion behind closed doors with HMRC wouldnt pander to the shameless grandstanding these bloodsucking MP's want to display to distract us from their own dodgy dealings.
A pox on both the Commons and Googles houses. A side helping of pox for HMRC as well.
This is part of the price we pay for membership of the EU. Its called the Single Market. I may have 'sales' reps on all the different countries, but when a sale is made that happens in a low tax country, not the country either of the parties making the transaction are physically situated in.
Well, they should and so should Treasury and Whitehall.
Over the years various governments and most of UK (un)civil servantry have had opportunity to make tax system easy to understand, transparent and a doodle to use.
They have chosen to make it complicated.
They have also chosen to let "slight of hand" or "telescope to wrong eye" benefit a few - a very few (probably in path to new post in finance sector after retirement from HMRC/Treasury?)
Google, along with many others it appears, merely used the rules to their advantage and ultimate disadvantage of UK wage slaves?
http://www.barkinganddagenhampost.co.uk/news/barking_mp_defends_family_firm_s_tax_bill_on_day_she_grills_companies_1_1691530
Stemcor, Hodge's family company, was founded by her father Hans Oppenheimer more than 60 years ago. Analysis of Stemcor’s latest accounts show that the business expected to pay UK corporation tax of just £157,000 on revenues in the UK of more than £2.1bn in 2011. The UK tax payable on the group's global profits of £65m was only £743k, reduced further by £586k in respect of tax that had been overprovided in prior years. The company explained that the low effective rate of UK tax was because they incurred a loss in the UK in 2011 due to difficult trading conditions.
Also... http://order-order.com/2012/11/21/margaret-hodges-multi-million-pound-stemcor-trusts/
I'm all for people paying the right amounts of tax, and going after tax evasion (illegal) but if the mechanisms are there for legal tax avoidance to reduce a companies tax burden then that is down to HMRC and government policy and NOT the companies. Also, the fact that the MP in question can accuse Google etc. when her own tax affairs are similar seems a bit hypocritical. I though Google were very restrained from this fact.
I very much doubt that a highly trained CIA operative is going to be walking the streets of Moscow wearing a really bad blond wig.
"How will I know who you are?"
"I'll be the one wearing a really bad blond wig...."
Makes a change from dark glasses, a carnation in the lapel and a copy of Pravda folded open at page 4......
Google do not have to have any offices or staff in the UK and they would still be able to sell to their customers here, I doubt a single customer would be lost if they closed up their UK offices tomorrow. Yes there is absurdity in the tax system, but Google on the face of it are acting within the rules. Accusing them of doing evil was a real abuse of parliamentary privilege and frankly a bit rich coming from MP's!
Bottom line is if they don't like the tax laws change them, don't moralize to companies. Why would it be less "evil" to give more money in taxes? Surely if you want to do good with money the government are the last people you'd give it to!
I thought the whole thing was an utter farce!
1) Is Google obeying the letter of the law? If not then what are HMRC doing about it?
2) If Google is obeying the letter of the law, what's the Government doing about it?
These questions matter much more than some grandstanding about corporate and government ethics, not to mention "EVIL"; however entertaining that might be.
And what's Google's profit on that £4.3bn of UK sales revenue? Because in the UK we don't tax corporate revenue, we tax corporate profit after a whole range of allowable costs. Saying "£2.4m in tax on £4.3bn of sales is just a joke" is meaningless. Especially if, say, costs were £4.299bn.
"only two of the UK's FTSE 100 companies have no subsidiaries at all in tax-friendly places"
And how many of the UK's FTSE 100 companies are actually British. Only a very very small number. Most are international and have HQ elsewhere. Listing on the London stock exchange says nothing about the company's base. Though I bet everyone in UKUncut etc all think that the FTSE is only British companies and therefore they are all tax avoiders. When in reality they are paying their legally set amount of tax - for a subsidiary/branch in the UK and not the whole business.
I, for one, think more corporations and more individuals should pay less tax.
The swifter we reach a low tax economy the butter?
For why? (Did I hear you ask?)
Because increased costs of public service coupled with lower standard of services are sufficient key performance indicators to show something is wrong.
"Sir Humphries" might have glossy, atonally sweet words to explain why it is so while maintaining a lavish lifecycle funded by the tax payer (and that increasingly looks like wage slaves on PAYE).
Silicon Valley has a different culture.
The conversation I want to have with Google is something like ...
You have the right to upshut your Glass and give the Prosecuter a present. If you cannot afford an Attorney, one will pointed at you and discharged. Do you understand these UK Rights even though they are in English and will not be translated into Californian ?
I am sure HM Revenue and Customs have skilled investigators who understand the tax system and how to get evidence out of a multinational corporation. MPs publicly grilling a Google representative is just pointless theatre.
As it is, the government just promised to throw at least £290million down the drain on another broken NHS IT system. Imagine a compromise - Google continue to pay almost no tax, but provide a free computerised prescription system with full analytics and targeted ads. The sad thing is I have confidence in our government's ability to find an alternative that is worse than either plan.
I cynically wonder if there is any political will to change the byzantine nature of our tax system when it benefits the professionals who make up a a fair proportion of MPs in Parliament.
With G8 coming prehaps we could see a global tax for global corporations.
Paris, because she knows the value of kiss.
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