back to article Facebook pays INFINITELY MORE UK corp tax than in 2012

Facebook has responded to critics who attacked the free content ad network for contributing exactly zero bucks to UK corporation tax in 2012, by dishing up a a tiny sum of just £3,000 to HM Revenue & Customs last year. However, the £3,169 bill Facebook owed to the Treasury in 2013 was offset by tax credits – which in fact left …

  1. Anonymous Coward
    Anonymous Coward

    "El Reg understands that Facebook UK continues to operate at a loss because of its growing workforce in Blighty."

    *Cough* bullshit *cough*

    1. splodge

      I'm convinced their average UK salary is quarter of a million. Yes. It's bound to be

  2. James 51

    If I was a share holder, in the face of all these losses I'd be asking Zuck what he's doing to turn things around and if he can't, he should consider his position.

    1. Lallabalalla

      If you were a shareholder

      you wouldn't question the fact that shares have gone up from 52 to 79, or how that happened.

      1. Alan Brown Silver badge

        Re: If you were a shareholder

        I'd be looking less at the share value and more at the dividends.

        https://en.wikipedia.org/wiki/Dividend_yield

        Stocks can go up, or down. Up is nice, but down happens too.

        More importantly, a stock only has any value when sold. Up to that point it's just scrip and I've seen "blue chip" high flyers evaporate overnight when the markets lose confidence in them - which is germane, because I think the earnings potential of facebook or other "social media" sites is vastly overestimated.

        1. James 51

          Re: If you were a shareholder

          So you'd have no problem with a company that's bleeding red ink borrowing to pay out a dividend?

          1. LucreLout Silver badge

            Re: If you were a shareholder

            Its only bleeding because it chooses to bleed. Set corporate taxes at 9% and watch how much Starbucks, google, apple, farcebook etc make in profit in the UK.

            If you were a shareholder, you'd know that from an investment point of view, this is a very good thing. You keep about 90% of what the investment earns, rather than keeping about 70% of it by choosing not to bleed.

            1. James 51

              Re: If you were a shareholder

              As a shareholder I would like to know if someone in the company committed fraud that there would be police with the right training to investigate and someone in the CPS who could prosecute. I would like the people going to work there to be able to drive on safe roads and if anything happens that there are emergency services that can help. Now, when if facebook going to get into the road building, security and medical business?

  3. Lee D Silver badge

    I don't blame Facebook.

    I blame the taxation system.

    What kind of farce is it where a company taking in any money, on whatever services, can avoid paying any significant amount of tax as a proportion of it's income?

    1. Caoilte

      I don't know, you'd have to ask the accountancy multinationals who advise the government on setting taxes and corporations on paying them.

    2. Anonymous Coward
      Anonymous Coward

      Global trading laws are to blame, not the UK tax system.

    3. John Lilburne

      If a company is tax dodging it getting cute with accountants, it is most likely to also getting cute with your privacy, and dodging its way around other regulations too.

    4. sawatts
      Holmes

      I tend to agree that the fault lies with the taxation system - internation and national.

      For Governments to blame companies for optimising their use of these complex systems is like blaming the rain for coming in through the hole in the roof.

      Bureaucrats create an overly complex taxation systems - something that perhaps gives them a sense of job satisfaction and importance.

      However, the more complex a system, the more loop-holes inevitably exist within it.... and it is the wealthy international companies who can afford the lawyers and accountants to best exploit such a system, not the Governments or their agencies.

      Some national governments forget that they are in competition for the tax income of international companies, and seem shocked when companies move their revenue to more favourable environments.

      I *would* like to see big companies paying more tax in my home country (UK). But its the responsibility of the various governments to make this happen, and not relying on charity from companies.

    5. streaky

      The problem isn't the tax system, it's that these international corporations are allowed to get away with massive misreporting of revenues, sales, profits and costs which leads to them not paying any tax. Cart/horse and whatnot. It's accounting law to blame to explicitly tax law, the accounting voodoo allows them not to pay tax.

      The worst part of all this is if any companies are able to accurate identify where the money comes from and where it goes it's the mostly-online ones like google and facebook - they know where their advertising customers are from and they know the location of the users they're targeting (at an individual level, not just by sampling) so they should be held to a higher standard when they're filing accounts; not a lower one.

      1. Lee D Silver badge

        "allowed to get away" is exactly the problem though. They are allowed, officially, because the law says they aren't doing anything wrong. If the laws were worded differently, they wouldn't be able to do it. Literally, these companies can be audited en-masse, brought to court, and still be found compliant.

        That's the problem. Not whether Mr Plod gets suspicious or not. It's that, by the word of the law, these companies are NOT doing anything illegal and yet still paying zero tax. How they report the income, or misreport it, is a matter of law. If they are able to misreport it, it means that the law allows that.

        "You must pay X% of your UK business income to the UK government." - seems pretty simple to me. I'm sure there are side-issues and corner cases but quite what's difficult about legislating that with enough clarifications to make what you mean by "UK business income" explicit?

        1. Dr. Mouse

          "You must pay X% of your UK business income to the UK government." - seems pretty simple to me. I'm sure there are side-issues and corner cases but quite what's difficult about legislating that with enough clarifications to make what you mean by "UK business income" explicit?

          The definition of "UK business income" is the problem.

          The company does pay X% on the UK companies profits (business income). The problem is that companies can, through various legal means, shift those profits around. International companies can shop around for the best deals. In fact, it is pretty much a legal requirement for PLCs to do so, as they have a legal obligation to maximise shareholder value.

          It is not even as though we can just "close the loopholes". All (or at least almost all) the "loopholes" are actually sane, logical rules. Let's take one of the widely used ones: shifting profits by licensing IP. The companies Irish arm holds a load of patents, trademarks etc. They charge the UK arm a license fee for using them. This "loophole" can't be closed (easily). If company A licenses IP from company B, that is a valid business cost and company A can't be expected to pay tax on it. Seeing as a multinational's UK & IE arms would be separate legal entities, the rules can't easily distinguish between this case and the case of two entirely separate companies.

          The tax system is complex, but it is complex for a reason.

          1. Anonymous Coward
            Anonymous Coward

            You say that

            ...but I've read the French tax authorities are starting to say "Forgot all your figure juggling, we can see you've made sales like this so we're going to tax you like this".

            If they can do it then we can too, we just lack the will (or rather our government does).

            1. codejunky Silver badge

              Re: You say that

              "If they can do it then we can too, we just lack the will (or rather our government does)."

              Yeah coz we really want to follow the french. Not like they are tanking impressively. Not like they are promising the earth, taxing like hell and being kicked in the nuts over and over for not balancing their budgets.

          2. James Micallef Silver badge

            Businesses are taxed on profit rather than income because governments want to promote businesses and startups, and frequently businesses can run for some years at a loss even when making money. Taxing profits rather than income helps small businesses to grow, the thing is that big multinationals abuse of these rules in ways that smaller businesses cannot.

            A possible solution: Instead of a high corporate tax (25% or 30%) on profit, have a low (5%?) corporate tax based on income. Then allow startups a 3 to 5 year window of breathing space, starting with 0% tax their first year and gradually ramping up to the full rate at the end of the 'breathing space' window. This has the advantage of being very clear (companies will always know their current tax liability and be able to accurately estimate future ones - business likes predictability). It is also much easier to calculate, because you don't need to mess around with complex accounting rules of what expenses are allowed to be deductible, and it's also easy to see what income is really being generated in which country.

            I expect that companies might try to dodge this by re-incorporating a new company every few years so safeguards need to be built in against this.

            1. Dr. Mouse

              Instead of a high corporate tax (25% or 30%) on profit, have a low (5%?) corporate tax based on income.

              What you are suggesting is VAT.

              1. James Micallef Silver badge

                "What you are suggesting is VAT."

                No, VAT is a tax on spending.

                As a private individual I am taxed income tax on my income and VAT on my spending.

                Businesses already get to pay VAT on their spending (though some of it is recoverable).

              2. Anonymous Coward
                Anonymous Coward

                RE: What you are suggesting is VAT.

                "What you are suggesting is VAT."

                Not quite.

                VAT is reclaimed at every stage involving a company meeting the VAT threshold (or voluntarily signing up for it), which means that it is a tax on the end-of-the-line consumer. Businesses don't pay it.

                1. tomban
            2. Brenda McViking

              Income is one side of the coin - Doing this would effectively destroy an awful lot of companies with low margins. If I get income from selling a chair, i have to buy the wood and the electricity for the lathe. If you tax the chair on sale (as in me, the manufacturer, not the customer who will pay VAT on top), without allowing me to offset the sale price against the wood and the electricity, then this all falls down.

              Here's a radical solution - don't tax profits. Don't offer subsidies for losses either.

              Why do profits need to be taxed? You pay workers, who pay tax

              You provide customers with goods, who pay tax

              You provide shareholders with income or assets, who pay tax.

              Why should any more tax be paid on top of other taxes? you've already covered all of the money exit routes - it's not like a company is going to buy itself a fancy house and a yacht for itself - and even if it does, the housebuilders and yacht builders will be paying tax via one of the 3 methods above. I mean the only thing that "profit tax" allows the exchequer to get their hands on is a pile of cash hoarded by a company. And why would a company hoard cash when inflation means it's losing money? which shareholders are going to stand for it? It's all utterly pointless.

              I mean, have I missed something? surely corporation tax is double taxation, plain and simple. I fundamentally disagree with double taxation, though I'm prepared to listen to how I've misunderstood the situation...

              1. mccp

                @Brenda McViking

                At present in the UK, a shareholder in receipt of a dividend gets a tax credit to take account of the fact that the company paying the dividend has already had to pay corporation tax. If the shareholder's dividend income added to any other income is below the higher rate threshold, they pay no tax at all. If the shareholder pays 40% tax on their earned income, the tax credit means that the effective tax rate for the dividend is only 25%.

                There's no double taxation for companies that distribute profit as dividends, it might look like it, but all that happens is an adjustment to the tax rate to take account of the personal circumstances of the person who receives the dividend.

                Customers pay a sales tax, which the company collects on behalf of HMRC. The company doesn't pay it. No double taxation there either.

                Companies only pay corporation tax on profits. Gross pay (i.e. salaries including income tax) is an allowable expense and therefore no double taxation there.

                Corporation tax is _not_ double taxation, pure and simple.

                If a company retains profits, they will (and should IMHO) pay tax on them. If they invest those profits in things that are useful to the country (like investing in capital equipment to develop the business) then there are further tax credits available.

              2. MR J

                Unless the whole world moved to a system where there was a 0% tax rate then this wouldn't work either.

                You seem to be mis-understanding how all of all of this works.

                Most of the tax they are paying is in the place where it cost them the least in taxation, and guess what, usually that is also the place where they have the fewest (in some cases, NO) staff.

                So sure, make $2bil, and pay 0 staff $0, so yea... That's going to work well.

                You COULD bump taxes up on workers, but that doesn't work either for a huge amount of reasons.

                Also, "information" sold as "goods" would be hard to tax too, you would end up with the same thing where some office (with 0 staff) is paying 250 million $ a year to another office (with 0 staff) for data information, but the island state charges 0% corporation tax... Then the buyer ships their "Global information" to the "UK Arm" for, oh, free, or even a huge fee (lets say 250 million $) and the plastic ducks they sold this year (and made 250 million $ profit on YAY) gets a tax offset due to the data they had to buy from themselves (BOOO) thus negating any profit.

                DEAR GOD MAN, CAN YOU SEE WHAT YOUR DOING, TAX FREE PLASTIC DUCKS...

                Until I replied to you I didn't know how bad you had it in for us, but no I know..

                Now I know.

            3. streaky

              "A possible solution: Instead of a high corporate tax (25% or 30%) on profit, have a low (5%?) corporate tax based on income."

              A possible solution: how about make them pay the tax they're supposed to pay by making them not juggle accounts to hide the money they're actually making.

          3. Alan Brown Silver badge

            one possible way

            "The companies Irish arm holds a load of patents, trademarks etc. They charge the UK arm a license fee for using them. This "loophole" can't be closed (easily). If company A licenses IP from company B, that is a valid business cost and company A can't be expected to pay tax on it."

            It can pay VAT though (which is a consumption tax).

            If I, as a small business or individual, buy an IP license from Microsoft UK, then I pay vat on that transaction even if nothing actually changes hands.

            When Microsoft UK pays license fees to Microsoft USA, no vat is paid on that transaction.

            There's a bunch of long and complicated reasons given for this kind of shenanigan, but it boils down to the age old argument of "Our employees pay tax, why should we pay too?"

      2. LucreLout Silver badge

        The problem isn't the tax system, it's that these international corporations are allowed to get away with massive misreporting of revenues, sales, profits and costs which leads to them not paying any tax

        They don't misreport anything. They fulfill all of the reporting criteria to the letter of the law. The tax man is informed of the use of any structure in advance. It very much is the tax system that is the "problem".

        Ultimately the only way to fix the "problem" is to move to a flat tax on corporate profits, dividends, and paye all set at the same level, and make that level low enough to not need to avoid paying it. The main issue with that, is that the public sector would have to be half the size it is now.

  4. chris 17 Silver badge
    Paris Hilton

    where do i apply for a job at Facebook? At an average ~£240k i think i'd be bothered to get out of bed and login lol!

  5. Matthew Banwell

    My corporation tax bill in 2013, for my one-man company run from a spare room, was a touch more at £3,185. Bit annoying that.

    1. sjaddy
      Devil

      Guess you need to get better accountants!!!

      Or at least claim that all the money you have earned has to go to pay the "licence" cost that you owe the parent company (that you of course own) in somewhere like the Cayman Isles!!!

      1. Anonymous Coward
        Anonymous Coward

        @sjaddy

        Now you're getting it!

        And when all small businesses down to lollipop vendors do the same, everything will be fine.

        1. Anonymous Coward
          Anonymous Coward

          Re: @sjaddy

          There's the problem.

          If you spend £30,000 in fees to avoid a tax bill of £3 million then it's worthwhile.

          To do the same to avoid £3,000 isn't going to work is it?

    2. Anonymous Coward
      Anonymous Coward

      Mine was several times the amount stated, actually. Also as a one-man show with an office at home (if I'm not on-premises with customers).

      I don't mind paying that, because enough money remains in my pockets. What I do mind is people and companies who try to find all possible international loopholes to not "contribute" any taxes. Yet they want their children to grow up in clean countries with excellent health care, education and low-crime rates, and once they are old enough they'd prefer them to have streets without potholes, too.

      It's sickening that $megacorp keeps getting away with this practice. I know, it's not illegal. But it sucks, because I contribute a great deal of my revenue to various taxes, while they do fuckall.

      1. Alistair
        Windows

        @AC "one-man show"

        While I don't mind paying taxes either you have to realize that you and I want our children to grow up in clean countries/Healthcare/education/crome/potholes.

        $megacorp does NOT want Healthcare, they want you to pay $$ for it, they do NOT want education, because then you will be able to reason out the horse crap they throw at you in ads, and they DON'T want low crime rates, so they can sell you protection in a box. They want the potholes in the streets so the now broke government has to borrow money to hire $megacorp to repave the roads.

        It keeps their stock prices going up. has zero overall real value to society, but it keeps the stock prices going up.

        (gumpy old bastard, and yes I'm in a supremely bitchy mood today)

        1. ecofeco Silver badge

          Re: @AC "one-man show"

          Alistair nails it.

          If I could only upvote you more than once.

          1. Anonymous Coward
            Anonymous Coward

            Re: @AC "one-man show"

            You could make subsidiary offshore accounts to upvote multiple times.

    3. Anonymous Coward
      Anonymous Coward

      But you didn't have to suffer the stress of paying wages of £49mn and footing a loss of £11mn.......

      I empathise with you, my 3 man company, run from my spare bedroom, paid around £18k last year in corp tax, plus about £8k per quarter in VAT.

      It is starting to grate on me, multinationals who take lots of money out of the pockets of UK consumers but don't contribute their fair share.

      1. mccp

        VAT

        "I empathise with you, my 3 man company, run from my spare bedroom, paid around £18k last year in corp tax, plus about £8k per quarter in VAT."

        Businesses don't _pay_ VAT they _collect_ it on behalf of HMRC.

  6. JMiles

    ARPU

    £49.8m revenue and 24m UK users. So average revenue per user of £2 per year. It must surely cost them a big chunk just to keep the lights on in the data centres so what kind of profit is everyone expecting them to make?

    1. IDoNotThinkSo

      Re: ARPU

      I'd expect them to make no profit at all in the UK if their accountants have done their sums correctly.

      The question you need to ask is:

      How much profit does the entire organisation make?

      (I think it was US$1.5 billion last year)

  7. Richard Rae

    "Labour MP Margaret Hodge, who chairs the public accounts committee, has chastised a number of companies about the apparent exploitation of legal tax loopholes by multinationals such as Google and Amazon."

    Change the tax law if it's that big a problem. At what point is following the letter of taxation law exploitation? Sure if it was, then the 'loop holes' should be addressed? But aren't these the same rules they use to attract businesses?

    1. Anonymous Coward
      Anonymous Coward

      Which law do you want to change?

      The laws being exploited are global ones. Every company can have multiple divisions all taxed separately and trading as different entities.

      So in the case of Starbucks they transfer cash from their UK division to another one (in a low tax country) by having the brand trademarks registered in another country, paying royalty payments to lease the brand to the UK.

      How do you stop that with a UK law change without going against international trading laws?

      1. Kevin Johnston Silver badge

        eloquently answered...

        Those tax practices were intended so that multi-national companies could take advantage of areas of expertise and share the output across divisions in the other countries. It is still used that way by the majority of companies (how many data-centres do you really want to have running?) but is being 'abused' by a small number. Is it really practical to change the laws and penalise everyone because the 'bad-guys' accountants are better at finding loopholes than the Governments are at closing them?

        1. Pascal Monett Silver badge

          Re: "but is being 'abused' by a small number"

          Yeah, they're called the Fortune 1000.

        2. John Robson Silver badge

          " Is it really practical to change the laws and penalise everyone because the 'bad-guys' accountants are better at finding loopholes than the Governments are at closing them?"

          Yes - if a couple of kids in a playground can't avoid breaking the windows when playing cricket then no-one gets to play cricket any more.

          Profit exporting is clearly daft - tax laws are far too complex and need a good rewriting (preferably onto no more than 4 sheets of A4)

          1. codejunky Silver badge

            @ John Robson

            "tax laws are far too complex and need a good rewriting (preferably onto no more than 4 sheets of A4)"

            That is a statement I could vote for.

      2. royston_vasey

        The loophole seems to be mostly around valuing intellectual property rights sales between related companies. A tax minimising organisation will register the IP in the lowest tax country and charge as much as they can get away with for the IP to minimise their total tax liability.

        One mechanism would be to tax all IP transfers in and out of the EU at a standard rate. This has to be EU wide otherwise customers will simply buy grey market goods from elsewhere in the EU (well, they can for software, not so much for a cup of overpriced coffee). Of course, they can still buy from outside the EU, but then you put a tariff on anything that attracts this EU-wide tax and pass the problem to customs officers to police.

        It'll never happen because we haven't got tax harmonisation across the EU.

      3. Def Silver badge

        How do you stop that with a UK law change...

        By taxing revenue and not profit. You know, how it works for people. (How that would work with regards to international trade laws, I don't know.)

        As a paid employee, I would love my salary to be taxed after I've finished paying all my bills and expenses.

        That said, as a company director, I am quite happy that I can spend as much of my company's revenue as possible and then pay tax on the remains - if any. Speaking of which, I feel a "business meeting" coming on in the Caribbean soon...

        1. JDX Gold badge

          Taxing revenue is a stupid idea. My 1-man company's profits are something like 80% of revenue, for large corporations it could be only 2% if they rely on bulk sales at tiny margins.

          And, personal tax sort of taxes profit rather than income by giving you a tax-free earnable allowance; you only pay tax on earnings after (approx) £10k. If you tot up your essential expenditure (averaged over adults in your home I suggest) where does it come relative to that? At a very rough guess in our household the allowance is about 2/3 of the per-person spending so not great but not a million miles off either.

          1. James Micallef Silver badge

            "...for large corporations it could be only 2% if they rely on bulk sales at tiny margins."

            Correct, with a tax on income, companies could only survive if their margin was higher than the tax rate, but of course a tax on income would be more like 3-5% rather than the current 25-30% tax on profit.

            Also, because corporations are taxed on profit they have incentives to increase *accounted* expenses to reduce their tax bill. I'm pretty sure that a big multinational that nominally has a 2% margin has some *accounted* expenses such as depreciation, cost of IP etc that are overstated for accounting purposes.

            1. YetAnotherLocksmith

              There's already a tax on income - VAT. If your income is high enough you have to charge it and pay it on. But it doesn't really affect business's that much as they get refunds on what they spend too, so it is the difference that goes to the tax man.

              The issue is, higher VAT hammers the poor and small businesses, while the rich get to put everything through their company. Which is why there is a threshold for being required to register for VAT.

              You know, it's almost like they thought this stuff through. It's just the world has changed in the last 20 years.

        2. stanimir

          You can't tax revenue.

          A company can be at a very legit loss with huge revenue. If you tax revenue you cant really have tax deductions and so on.

          You can tax people with income tax b/c the income is not directly linked to the spending a person makes. For instance wearing better make up won't necessarily increase your productivity and paycheck.

          1. Def Silver badge

            I never said it's a perfect idea. But at least it's an idea.

            You could, for example, tax revenue after in-country costs. So for companies which only do business in a single country, nothing would change. Maybe allow overseas costs for tangible goods not to be taxed either, to prevent companies which have to genuinely import raw materials being unfairly taxed. For companies that have to pay "licencing costs" to overseas subsidiaries revenue directed to those costs would be taxed prior to the money leaving the country.

            Or you could just leave the system as it is and carry on complaining for the rest of your lives.

            1. JDX Gold badge

              I don't think a terrible idea is better than no idea. Forbidding all these companies from operating in the UK is an idea.

            2. John Brown (no body) Silver badge

              "For companies that have to pay "licencing costs" to overseas subsidiaries revenue directed to those costs would be taxed prior to the money leaving the country."

              Although I think I see where you are coming from with that, the problem is that a lot of manufacturing, both physical and non-tangible (eg computer games) is likely to be paying licensing fees for at least some of the components.

          2. Anonymous Coward
            Anonymous Coward

            > For instance wearing better make up won't necessarily increase your productivity and paycheck.

            You are not on the porn business, I see.

      4. James Micallef Silver badge

        "The laws being exploited are global ones"

        There is no such thing as a global law. There are laws of individual countries that are dependent on treaties between countries, and/or that countries apply to international dealings. However each and any of these laws can be changed unilaterally by the country concerned*. The UK can simply declare, for example, that for the purpose of tax payable to the UK, payments made for IP transfers are not to be included as costs for the calculation of taxable profits.

        Pretty much all countries SHOULD decide between themselves that for the purpose of tax payable, fines paid are not to be included as costs for the calculation of taxable profits.

        etc etc

        *In the case of laws connected with international treaties, this probably would lead to repercussions/retaliations of other countries changing their own laws in response.

      5. 2+2=5 Silver badge

        > How do you stop that with a UK law change without going against international trading laws?

        Simples: Facebook makes money by selling "access" to its users to advertisers. So the UK Government could similarly "sell" the right to do business with the UK citizens that it represents by introducing a "person access tax" or PAT. Companies that deal with people, even if they don't charge them directly for services, have to pay PAT.

        Business to consumer companies would pay this tax. Business to business companies would continue pay the current corporation tax. Those that do both would pay both pro-rata'd in some way.

        Exceptions would be needed for the BBC, the NHS, Churches and charities etc. but this won't be any harder to manage than at present.

      6. MR J

        They would need to add new laws in to say that any money transferred "out" to another company (or division) pulls that company back "IN", and as such, any money transferred "OUT" again would start the same cycle.

        This would allow for it to all be taxed, but WOULD be a accounting nightmare for global taxation checking. The Company could do it correctly, but external audits would be damn near impossible of finding the truth.

        At least this way you could give "Credit" for tax that is paid.

        100 mil, 5% tax paid to host country, 16% paid to UK (21%-5%).. That's how Americans who live anywhere else in the world have to pay taxes. (Little known fact that Americans pay income tax to the IRS regardless of what country they live in!)..

  8. Anonymous Coward
    Anonymous Coward

    They are paying their taxes in the EU which is all they have to do.

    If you don't like it I'm guessing you've already contacted your MP about it?

  9. codejunky Silver badge

    So

    They are big and bad for following the rules and like most people are not stupidly paying far more tax than they need to? Aww didums.

    I wonder how much tax they actually do pay. That is after they provide jobs at wages inflated to address additional tax's etc. Yes they have more money than you (possibly as individuals, likely as a company) but this isnt labours version of a sports day. You dont all win because you turned up. And before demanding more money from them I would like to see you pay more money than demanded by the tax office.

    Cmon lead by example.... No takers?

    1. Boris the Cockroach Silver badge
      Unhappy

      Re: So

      Idiot

      The workers have to pay their taxes out of the income paid to them by the employer, its not paid by the employer, but the employee.

      The employer just adds the wages to the expenses bit on his accounts sheet

      But as has been pointed out, why dont inland revenue investigate how a company can make year on year losses on the UK operation and yet still remain solvent.... because the company I work for cant

      1. codejunky Silver badge

        Re: So

        @ Boris the Cockroach

        I will agree you resemble your first statement. The workers do have to pay their tax out of what they are paid which requires their pay to be enough to pay the tax etc otherwise it wouldnt be worth working. More you tax the worker the more you cost the business. On top of that a business has the great pleasure of having to pay tax for the pleasure of paying you! Your pay packet is NOT how much they are paying you because they must pay the gov in the process. And dont forget minimum wage because we need to ramp up the minimum pay to compensate for all the VAT and duties people pay on stuff yey.

        And is it the inlands job to dictate what should or should not exist due to solvency? I see a lot of charities needing exemption.

        Quite simply the law can be changed and it might be. But to complain that a company doesnt pay more tax than it has to it hypocritical unless your doing it yourself. Do you?

    2. Anonymous Coward
      Anonymous Coward

      Re: So

      You really are a charmer!

      I'm sure people can't get enough of you at dinner parties.

    3. Anonymous Coward
      Anonymous Coward

      Blame governments for not achieving impossible perfection... not those who exploit that fact?

      @codejunky; "They are big and bad for following the rules and like most people are not stupidly paying far more tax than they need to? Aww didums."

      I'm very tired of the general "it's within the letter of the law, so it's morally okay for multinationals to avoid paying tax this way, blame the government that wrote those laws" line of argument.

      I'm not saying that governments always operate in good faith (New Labour and- even moreso- the Tories were both in bed with big business). However, even *in principle* it's going to be damned near impossible to create a set of tax rules that is both entirely watertight with respect to the sort of loopholes these companies exploit, *yet* still includes enough exemptions to make it workable for regular business use (e.g. accounting for use of genuinely third-party licensed property).

      These major companies are using their size and resources (in ways that aren't practical for smaller businesses) to quite blatantly find and exploit loopholes in the law.

      I've got news for you. Just because doing something's legal doesn't exempt you from criticism... especially not if it's intentionally exploiting weaknesses in laws that are quite clearly contrary to their intent. Don't like that? "Aww diddums".

      So, yes. Blame governments for their failure in to meet the impossible task of writing a set of taw laws that are 100% watertight with respect to loopholes yet aren't inflexibly draconian to legitimate businesses. Don't blame the companies that are quite blatantly throwing massive resources at exploiting these loopholes, intentionally operating in bad faith with respect to their intent. (*)

      Yes, they may (arguably (**)) be operating within the letter of the law, but that doesn't exempt them from criticism. They're quite deliberately operating in bad faith with regard to its spirit and intent, and I've no problem with calling them parasitic leaches on that basis.

      In all honesty, I have to admit that I'm unclear what the balance is with respect to the wording of the law and to its interpretation and precedent. If the current laws are overly reliant on their literal wording then perhaps they need to be rewritten to be more reliant upon interpretation.

      If the problem is that the government itself is operating in bad faith because it's in bed with big business... that's grounds for criticising *both*. No, you don't get to shift all the blame onto "governments" while giving big businesses a free pass. Especially not when the power of the latter is one of the major corrupting influences on democracy.

      (*) And yes, much of the "red tape" that businesses hate so much can be placed at the door of those assholes, since a significant amount is the result of the buildup of repeated fixes to loopholes that were being exploited. Of course, big business has the economies of scale and resources to deal with red tape in the way that smaller rivals don't, so it benefits them in that respect.

      (**) Arguably, because not all of these would probably be guaranteed legal if it was practical to bring them to court. But in the worse case scenario, what happens in reality is that the multinational settles with the taxman for pennies on the pound.

      1. codejunky Silver badge

        Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

        @AC

        I'm very tired of the general "it's within the letter of the law, so it's morally okay

        If you prefer we could scrap the law and work on fuzzy principals of baseless accusation and 'thats not what I ment so I change the rules to suit'. Do we follow the law or not? If the law is too complicated then maybe it is too complicated and need shortening massively and simplifying. If we cannot trust the law as a set of rules then how do we follow the law and how do we stop it being abused massively because the law is fuzzy?

        I've got news for you. Just because doing something's legal doesn't exempt you from criticism

        Of course and that is why all you tax dodging ISA holders would be happy to give over more money due to a retrospective law change because someone changes their mind? Or maybe you should just be criticized because your a tax dodging evil person who wont think of the children (or the duck houses).

        They're quite deliberately operating in bad faith with regard to its spirit and intent

        Faith, spirit and intent. Is this religion or rules to live by. How does the law not get abused by law makers (as it is regularly) because the law gives them flexibility in times of need/greed? Is following the law bad faith? Is it wrong to check that what you want to do is legal because you must be doing something questionable to query what is and isnt acceptable yeah? No.

        If the problem is that the government itself is operating in bad faith because it's in bed with big business

        Now this is the interesting part which closes down the argument of wording vs interpretation. If you have bad behaving gov and business then interpretation allows bad behaviour. If it is the letter of the law the business and the gov must abide by it.

        If the law needs changing I have no problem with that. But people legally not being robbed blind by the mob (gov) so they can bribe votes and treat themselves at our expense is not going to upset me. I know nobody who is stupid enough to pay more than they have to in tax because when you earn the money you want to use that money your way. And it is shameful that the answer to all problems or upsets is to demand people (always other people) are robbed more to make it 'fair' or 'moral'. And those are fuzzy words that have no real meaning but are greatly abused to make any point.

        1. Anonymous Coward
          Anonymous Coward

          Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

          "If you prefer we could scrap the law and work on fuzzy principals [sic] of baseless accusation"

          This isn't something I suggested, and comes close to putting words in my mouth.

          "Of course and that is why all you tax dodging ISA holders"

          I'm not an ISA holder, but regardless, that's not the same thing at all.

          The ISA's favourable tax status wasn't merely *intentional*- it was the whole point of the scheme. Whether that's right or wrong is a matter of opinion, but it's still blatantly not a loophole, let alone one that requires the resources of a multinational to both find and exploit.

          "If the law is too complicated then maybe it is too complicated and need shortening massively and simplifying."

          Maybe it's complicated because the previously simple wording was being exploited- as I already suggested.

          If we cannot trust the law as a set of rules then how do we follow the law and how do we stop it being abused massively because the law is fuzzy?"

          That's a very good question. As I made clear, writing a tax law that has no loopholes without being overly draconian or open to abuse is very difficult.

          "Faith, spirit and intent. Is this religion or rules to live by. [etc]"

          One cannot use the loose "spirit" or the "intent" of the law as the basis of a legal decision... but then, I wasn't suggesting that it should be.

          I quite definitely *was* suggesting that, during regular discussion, one can point to a company that is blatantly exploiting loopholes in the intent of the original law and accuse them of being *morally* wrong (e.g. "parasitic leaches") as I did.

          That, indeed, is usually the impetus for changing the wording of the law in the first place; when a company is doing something that's technically legal, but shouldn't be (in most people's view) and wasn't the intent of those who wrote the original law.

          "If you have bad behaving gov and business then interpretation allows bad behaviour. If it is the letter of the law the business and the gov must abide by it."

          You are correct- this is a danger I'm aware of, and why the judiciary must be independent of the government and seen to be unbiased. That said, much more law is subject to interpretation and precedent than many forum-posting geeks (who think the law is a set of precisely-defined rules) often realise.

          The difficult part is achieving a balance that isn't open to abuse.

          "people legally not being robbed blind by the mob (gov)"

          This equating of governments with the "mob" (i.e. inherently bad and starting in arguments from that disadvantaged viewpoint) does seem to be a common view among pro free-marketeers, who also view free market business from the elevated position of being *morally*- rather than just legally- right so long as they stay within the letter of the law (which their lobbyists helped to write).

          I'm quite convinced that- once they'd gamed an unregulated market into a monopoly or cartel position, or made themselves powerful enough to unbalance democracy in a given countries- that such "big business" interests would quite happily render themselves indistinguishable from abusive government.

          Again, my argument was against the general "they're within the letter of the law, so there's nothing wrong [implication; *morally* wrong] with that" line. Nope. It may be difficult to create a law that legally covers all the loopholes they might exploit, but that doesn't mean they get to claim the moral high ground- quite the opposite.

          The fact that I don't have the easy solutions- because there *are* none- doesn't mean we can't criticise those blatantly exploiting the problem.

          1. codejunky Silver badge

            Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

            @AC

            This isn't something I suggested, and comes close to putting words in my mouth

            If you are the same AC then you wrote- "If the current laws are overly reliant on their literal wording then perhaps they need to be rewritten to be more reliant upon interpretation." which suggests scrapping the literal laws in favour of ones with room for interpretation (aka fuzzy). I didnt take anything from your mouth, I stated what you said.

            I'm not an ISA holder, but regardless, that's not the same thing at all.

            Although you did say "If the problem is that the government itself is operating in bad faith because it's in bed with big business" which considering tax laws to attract big business is the thing suggests you dont like the current interpretation of the laws which are literal. Is it exploitation of the rules or has the interpretation changed with the change of gov? Has it changed with the change of government or economic times?

            Maybe it's complicated because the previously simple wording was being exploited

            And obviously the complexity is helping the situation. At least this way the tax hits only the smaller players and not the bigger ones. Bravo.

            One cannot use the loose "spirit" or the "intent" of the law as the basis of a legal decision... but then, I wasn't suggesting that it should be.

            Vs "If the current laws are overly reliant on their literal wording then perhaps they need to be rewritten to be more reliant upon interpretation."?

            This equating of governments with the "mob" (i.e. inherently bad and starting in arguments from that disadvantaged viewpoint) does seem to be a common view among pro free-marketeers, who also view free market business from the elevated position of being *morally*- rather than just legally- right so long as they stay within the letter of the law

            Pro free market yeah. But I consider them the mob by enforcing taking money off people and using it under the guise of punishment while using it to enjoy themselves. I am all fine with public money for supporting those who need the assistance but not for electoral bribes and abuse. I dont see business as more 'morally' right, they are as human as the next but the point is they are regulated by the law. I strongly disagree with the idea that the only solution to people legally avoiding tax is to abuse them further with more tax to make it more 'even' with smaller business. Why not make it more even for smaller business by not excessively robbing them of their earnings and the population. A business doesnt really exist it is run by people and it is always people who are taxed. Tax is the taking by force of money.

            So crying loophole every time someone legally doesnt pay as much tax as you would like them to returns us to the ISA problem. We all have our own interpretations and your interpretation seems to be 'they make lots of money, it should be taken from them to spend on me'. So lets get back to you giving more tax than is due because you want to be 'morally' (fuzzy word) right.

            1. Anonymous Coward
              Anonymous Coward

              Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

              I didnt take anything from your mouth, I stated what you said.

              What *I* said was "If the current laws are overly reliant on their literal wording then perhaps they need to be rewritten to be more reliant upon interpretation" (i.e. sufficient to be applied to real-world situations). What you said was "fuzzy principals of baseless accusation", an exaggerated distortion of that.

              Although you did say "If the problem is that the government itself is operating in bad faith because it's in bed with big business" which considering tax laws to attract big business is the thing suggests you dont like the current interpretation of the laws which are literal.

              Some laws may be intentionally written to provide favourable tax status. That's not the same as a loophole.

              As I've *already* said, even in absolute good faith, it's going to be very difficult to write a law that's both loophole-free (with regard to the intent behind it) *and* non-draconian.

              And obviously the complexity is helping the situation.

              Eventually, no. They're the result of repeated repair work, and the repairs become unwieldy and cumbersome after some time.

              That doesn't excuse those who made such revisions necessary in the first place.

              Vs "If the current laws are overly reliant on their literal wording then perhaps they need to be rewritten to be more reliant upon interpretation."?

              Versus if they're written such that they force judges into a straitjacket with insufficient means to apply them to the current situation.

              the point is they are regulated by the law.

              The *whole point* of this discussion is that the law was imperfect, and that they're exploiting those imperfections.

              And that's until they bribe, er... *lobby* their way into such positions of power that they effectively help write the laws that they're obeying. A la the United States.

              I strongly disagree with the idea that the only solution to people legally avoiding tax is to abuse them further with more tax to make it more 'even' with smaller business.

              No, I propose closing the loopholes that they're blatantly exploiting so that they pay the same tax as everyone else.

              Why not make it more even for smaller business by not excessively robbing them of their earnings and the population

              You used two loaded words there; describing it as "robbing" already suggests strong bias and "excessively" suggests that it's too much. That said, is there a non-excessive form of robbery? ;-)

              At any rate, this sounds like you're using this as an excuse to steer it from a discussion about convoluted tax-avoidance/evasion schemes into one for the pro-low-tax-regime bee in your bonnet!

              This is something we'll have to agree to disagree on, as I don't want to get into another very long discussion.

              So crying loophole every time someone legally doesnt pay as much tax as you would like them to returns us to the ISA problem.

              There's not a "problem"; I already explained the difference quite clearly. Perhaps you didn't understand?

              The ISA scheme was *intentionally* designed as a tax-favourable savings mechanism. That's not a "loophole"- quite the opposite, that's very obviously its raison d'etre!

              A large multinational spending large amounts of money in order to spot and exploit imperfections in laws in ways that were never intended? Hardly the same thing.

              So lets get back to you giving more tax than is due because you want to be 'morally' (fuzzy word) right.

              Again, putting words in my mouth.

              *I* don't want to pay more tax than is due here. (*) I want the tax-dodging multinationals to pay *their* fare share!

              And again, even if what they're doing is technically paying what they're legally "due", it's still quite blatantly only so due to their exploiting loopholes, and I'll still call them parasites for it.

              Taking advantage of what were quite deliberately created as tax-favourable schemes is very different from using convoluted organisational structures to exploit imperfections in the tax regime that few could have foreseen in advance.

              (*) *If* I'm convinced that paying more tax will result in a better society to live in, and indirect benefit for myself (e.g. better NHS service instead of the horrendously expensive American), then yeah, I'll support higher taxes. Cue the standard "*you* pay more tax if you want, but don't make the rest of us pay the mob(gov)" comeback.... no, that'd be charity, not taxes.

              1. codejunky Silver badge

                Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                @AC

                What *I* said was "If the current laws are overly reliant on their literal wording then perhaps they need to be rewritten to be more reliant upon interpretation" (i.e. sufficient to be applied to real-world situations).

                And so interpretation = fuzzy. For some it can be one way, for others another. And both can be applied to the real world situations but the more wiggle room for the business to be ripped off the less trust they can have in the country where they employ people and pay the tax that they must.

                Some laws may be intentionally written to provide favourable tax status. That's not the same as a loophole.

                How do you tell the difference? When the public is charged to demand the 'rich' (other people) pay more the actual rules have to be quieter to avoid the rage of the mob for the necessary tax arrangements. So what is intentional or a loophole when they both exist in the same way and the same text. And yes they have to pay to take the advantages intentional or not which keeps people employed. It all looks the same, It all depends on who's faith which changes with time.

                And that's until they bribe, er... *lobby* their way into such positions of power that they effectively help write the laws that they're obeying. A la the United States.

                Very true problem. I totally agree. And the gov and businesses both exploit their positions in accordance with the law and beating of each other.

                You used two loaded words there; describing it as "robbing" already suggests strong bias and "excessively" suggests that it's too much. That said, is there a non-excessive form of robbery? ;-)

                And that is the point. Wasnt it South Korea where the population queued to give savings to the gov to help them out because of the recession? Public funds should be what most people are willing to contribute. However it is increasingly demonstrated that people would like other people to pay more. It doesnt matter that the NHS is underfunded for care because the nurses want a pay rise (on top of a pay rise). It doesnt matter that the country needs to control its deficit the state expands and spends happily as long as others are paying. Bankers were the ultimate friends of everyone until the recession proving that people can be bought with other peoples money (until it runs out). This is a lack of morals in the population as well as the crimes committed by the perpetrators.

                *I* don't want to pay more tax than is due here. (*) I want the tax-dodging multinationals to pay *their* fare share!

                You want to pay the minimum you must, so do they. It is a direct and factual statement. So what you are saying is you want them to pay more and thats it. Not you, them. Which goes back to wanting to take the money out of the pockets of the 'rich' (others). A lot of people are like this, you seem to be in the majority of people I know. Not everyone of course but the majority who would like to volunteer others to pay more and when you use the word parasite it is a term which can easily be turned around onto all of us who cant pay enough tax to pay our services (I include myself in that).

                Cue the standard "*you* pay more tax if you want, but don't make the rest of us pay the mob(gov)" comeback.... no, that'd be charity, not taxes.

                Nope. Charity is a choice. A freedom. A right to accept or decline. A personal decision of direct or indirect action which is down to personal belief and sometimes faith. Insisting money is robbed (stolen, taken by force, etc) from others is insisting on robbery. If you dont believe it is then try this out- get someone to take by force something from someone else. Even years ago in the school yard the kids would call it 'taxing'. Even kids understood the concept!

                1. This post has been deleted by its author

                2. Anonymous Coward
                  Anonymous Coward

                  Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                  And so interpretation = fuzzy.

                  What you actually said was "fuzzy principals of baseless accusation", implying a false dichotomy between laws that were rigidly fixed and arbitrary, corruptable decisions making a mockery of justice.

                  In fact, *any* law that doesn't force strict adherence to a rigidly-defined set of rules that must be uniformly applied, regardless of situation, that doesn't include fixed sentences that judges have no leeway in modifying would be "fuzzy" by that definition.

                  In practice, many laws *are* like this, and this is A Good Thing as it lets judges take real world circumstances into account. And, no, that doesn't mean they're free to decide what constitutes justice on a whim.

                  The important thing is that the justice system is- and is seen to be- independent of interference by partisan government (or business) interference.

                  the more wiggle room for the business to be ripped off the less trust they can have in the country where they employ people and pay the tax that they must.

                  Starbucks can pay all their taxes in Lichtenstein for all I care... provided they're not conducting any business in Britain. If they want to take their ball and go home rather than pay UK taxes, other businesses will take their place.

                  As for manufacturing and service industries, it can be decided on a case-by-case basis whether it's worth our time giving tax breaks to them or not.

                  You want to pay the minimum you must, so do they.

                  Speak for yourself. I expect to pay a fair contribution to the society I live in, and would pay more if I was convinced the money was going to be effectively spent. As I said, this isn't charity, and I would expect others to pay their fair contribution as well.

                  As I've already said, these schemes might (or might not) be within the letter of the law, but we know they're a contrived and convoluted setup to exploit weaknesses in the law and avoid paying tax.

                  So what you are saying is you want them to pay more and thats it.

                  In the sense that actually paying their fair share of taxes instead of the artificially low amount they're "contributing" due to their quasi-legal tax-avoidance/evasion scheme would be "paying more", that's rather self-evidently correct(!)

                  Nope. Charity is a choice. A freedom. [etc]

                  "Charity" was what the "*you* pay more tax if you want, but don't make the rest of us pay the mob(gov)" approach would be.

                  The rest of your argument is (again) moving in the general direction of the tax-is-theft bee in your bonnet.

                  This is a lack of morals in the population as well as the crimes committed by the perpetrators.

                  Oh, I see. We're getting onto the low-tax-as-morality thing now.

                  However it is increasingly demonstrated that people would like other people to pay more. It doesnt matter that the NHS is underfunded for care because the nurses want a pay rise

                  "Increasingly demonstrated" by who?

                  IMHO that's the way it's always been. NHS funding will *never* be entirely satisfactory, and people will always want paid more. That's human nature to some extent, but I don't accept the implication that just because we'll never perfectly reconcile these competing forces or that human beings aren't perfectly altruistic that we should ditch the lot.

                  Bankers were the ultimate friends of everyone until the recession

                  Speak for yourself. Many of us already knew what a bunch of dubious w*****s they were before the recession hit the fan.

                  1. codejunky Silver badge

                    Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                    Starbucks can pay all their taxes in Lichtenstein for all I care... provided they're not conducting any business in Britain. If they want to take their ball and go home rather than pay UK taxes, other businesses will take their place.

                    Amusingly I hear this argument often. So where is this other business? If starbucks would be better off out of the country due to excessive tax laws where is this other magical unicorn that will make everyone happy? The list so far is pays 'fair' (inflated) tax here, pays high wages, creates lots of jobs. It doesnt exist because this is the real world, the hole left by the business would be a loss of jobs, loss of wages (more welfare payments), loss of the legally collected tax money and more people with nothing better to do than complain. Starbucks do pay UK tax's, your lack of grasp of that is not their problem, its yours. They pay what they are legally required to and it is the laws job to be correct.

                    This is a simple idea- you pay tax according to the rules. NOT make the rules up to extract whatever kind of tax makes you feel morally superior (the situation we are heading into). Just because a recession hit doesnt mean good behaviour is suddenly bad just to try and extract more money from the earning.

                    Speak for yourself. I expect to pay a fair contribution to the society I live in, and would pay more if I was convinced the money was going to be effectively spent.

                    Perfect. You have nailed yourself with this argument perfectly. Do you pay more tax than demanded from you? If not then you dont feel, it is effectively spent and so dont pay more than you need to. That would be the minimum required from you. And that is the same for the companies! And the word fair is of course invalid as it is subjective and fuzzy (actually a word without meaning). Every argument of fair you have used comes under this. They are non-statements meaning nothing. If you dont understand why then define 'fair' Ask lots of different people of different beliefs and experiences. Fair is not real.

                    The rest of your argument is (again) moving in the general direction of the tax-is-theft bee in your bonnet.

                    Wait! Have you found a solution? The demonstration question was to do this without it being robbery- 'get someone to take by force something from someone else'. Have you done it? Or are you still in denial?

                    Oh, I see. We're getting onto the low-tax-as-morality thing now.

                    You still miss the point. Morality is not real. It is again a massively subjective belief which is different between people. Right and wrong are binary answers but many things (even opposing) could be right or wrong. To believe in absolute morality as you seem to and absolute fairness is to have faith, but not reality. This is why different people have different opinions. Because fair and moral is relative.

                    "Increasingly demonstrated" by who?

                    Last I checked your ENTIRE argument here is based on wanting them to pay more because they legally pay as much tax as they must but they have money. With liberal sprinklings of fair and moral thrown in.

                    1. This post has been deleted by its author

                    2. Anonymous Coward
                      Anonymous Coward

                      Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                      If starbucks would be better off out of the country due to excessive tax laws

                      Didn't say anything about "excessive", that's your attempted spin on it. *I* said if they had to pay a fair share of tax comparable to what was intended and to what most non-multinational businesses in a comparable position have to pay.

                      Seriously, you think Starbucks throwing a strop and moving all their UK shops to Lichtenstein (ha ha) would damage the UK economy?!

                      In reality, I'm pretty damn sure that they *wouldn't* close, because know damn well they're still making good money. But if they did, it would be no loss, as their place would be taken by other coffee shop businesses or ways for people to spend their money on overpriced food and drink.

                      Starbucks do pay UK tax's, your lack of grasp of that is not their problem, its yours.

                      Poor wording on my part. But, as has already been stated many times now, they pay minimal tax due to supposedly legal (see below) but blatant gaming of the system.

                      it is the laws job to be correct

                      Back to the title of this post, blame governments for not achieving impossible perfection... not those who exploit that fact.

                      Starbucks' position might- or might not- be technically legal (again, see below), but calling them out on what is obviously parasitic tax avoidance or anything else isn't a legal issue.

                      This is a simple idea- you pay tax according to the rules. NOT make the rules up to extract whatever kind of tax makes you feel morally superior

                      When it's clear that the rules are being gamed due to unforeseen flaws (i.e. loopholes), it's quite reasonable to change them.

                      But you seem to assume that any law that has leeway in it is "making up the rules". Which is worrying, because the vast majority of everyday court cases involving human beings take account of the circumstances- which cannot be covered in a general law- in both judgement and sentencing.

                      Last I checked your ENTIRE argument here is based on wanting them to pay more because they legally pay as much tax as they must but they have money.

                      It's open to question how "legal" some of these schemes are, since, as I've already said, *if* they were to be held up to the full scrutiny of the law in court it's not entirely clear that they would all hold up- but companies know that this rarely happens and at worse they'll settle with the taxman for pennies on the pound.

                      But this is beside the point; the argument already rests on the presumption that what they are doing is technically "legal" but quite blatantly gaming the system.

                      Saying "as they must but they have money" is beside the point.

                      And you didn't actually address the quote you were allegedly replying to- "who" has "increasingly demonstrated" this alleged decline in morals and rise of self-centred behaviour? As I said, it seems to be a constant in human nature.

                      With liberal sprinklings of fair and moral thrown in.

                      It's interesting that you yourself invoke morality when it supported your anti-tax position "This is a lack of morals in the population as well as the crimes committed by the perpetrators."

                      Can't have it both ways.

                      1. codejunky Silver badge

                        Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                        Didn't say anything about "excessive", that's your attempted spin on it. *I* said if they had to pay a fair share

                        And as I have clearly shown you 'fair' doesnt exist and is your OPINION only. And there are many opinions and a lot of them are different to yours. You want them to pay more than legally required, hence excessive.

                        Seriously, you think Starbucks throwing a strop and moving all their UK shops to Lichtenstein (ha ha) would damage the UK economy?!

                        You dont? Thank god you dont run an economy (or are you a French leader?). When the recession hit people feared for their jobs. We have jobs. It was achieved by not increasing wages but also laying off as few people possible. But your happy to throw away business (which generates tax money and employs people) because you think in your ideology they should pay more. Plan B! Lets just take the money off people like you instead. Because you like the words moral and fair and those words can easily be used against you.

                        But, as has already been stated many times now, they pay minimal tax due to supposedly legal (see below) but blatant gaming of the system.

                        In your opinion based on 'they have more money than me, take theirs'.

                        Starbucks' position might- or might not- be technically legal (again, see below), but calling them out on what is obviously parasitic tax avoidance or anything else isn't a legal issue.

                        Same for calling you and others parasites for living off the tax money from companies because we dont pay enough for the perks we want.

                        But you seem to assume that any law that has leeway in it is "making up the rules"

                        And now new tax law. You pay this much.... unless we need more money! Jackpot. So where is your coffee chain? And how much shall we take from you because of redirected public rage?

                        It's open to question how "legal" some of these schemes are

                        Nope. Legal as in following the rules. Otherwise what is or isnt legal? Not business friendly to not know your own rules. Changing the interpretation of the rules just to take more money is cheating. Did you ever play games? Do you have rules of the workplace? Or do you break any rule you can reinterpret because you can?

                        Saying "as they must but they have money" is beside the point.

                        So you would crack down on them even if they didnt have the money? All them law abiding tax avoiders! Using the law to pass on their wealth as gifts to avoid inheritance tax, using ISA's and other legal means.

                        It's interesting that you yourself invoke morality when it supported your anti-tax position

                        You seem to miss the point. I used your fuzzy ideas and pointed them with no effort at all back at you. It was another learning moment for you to understand that moral and fair are irrelevant words in such a debate because they are applicable for both sides of the argument. You claimed a moral high ground and I shut down that dream (even if you dont understand it) because both sides can claim morality and both sides would be using the word correctly. I didnt use it to support my argument, I abused your words to show the lack of support your argument had.

                        "who" has "increasingly demonstrated" this alleged decline in morals and rise of self-centred behaviour?

                        I did answer- "your ENTIRE argument here is based on wanting them to pay more". And you put the 'alleged decline in morals and rise of self-centred behaviour' I only said people insist other people pay and using you as the example, because you would only pay (your words) - *If* I'm convinced that paying more tax will result in a better society to live in. So you wont pay but you want them to. If you need more examples then read the comment section on pretty much any public money discussion.

                        1. This post has been deleted by its author

                        2. Anonymous Coward
                          Anonymous Coward

                          Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                          And as I have clearly shown you 'fair' doesnt exist

                          You haven't "clearly shown" anything, except in your own mind.

                          and is your OPINION only.

                          Lots of things in society come down to "OPINION". You do understand that taxes, laws, et al are a means to an end and often determined by what sort of a society people wish to live in?

                          But your happy to throw away business

                          No, I'm happy for non-multinationals to be competing on an even playing field with those who are large enough to indulge in convoluted tax-avoiding schemes. But I already said that.

                          In your opinion based on 'they have more money than me, take theirs'.

                          Lather, rinse, repeat. See previous discussions for this already-addressed point.

                          And now new tax law. You pay this much.... unless we need more money! Jackpot.

                          Lather, rinse, repeat. See previous comments regarding how most real-world legal cases require some level of judgement and discretion in application of the law.

                          Nope. Legal as in following the rules.

                          Go back and read what was *actually* said already (i.e. Lather, Rinse, Repeat). Many of these schemes haven't been tested in court, so it's not entirely clear that they *are* following the rules.

                          So you would crack down on them even if they didnt have the money?

                          If they're genuinely making no profit, chances are they wouldn't be paying much tax.

                          You seem to miss the point. I used your fuzzy ideas and pointed them with no effort at all back at you. [..] I abused your words to show the lack of support your argument had.

                          Oh, okay. You were attempting to be clever, but expressed yourself badly and are trying to blame me for not being able to mind-read the intent behind your self-congratulatory drivel. Thanks for the explanation!

                          Anyway, this is getting repetitive. You're bringing up points that I've answered several times already (see above), and since we're mostly just arguing with each other at this point we'll have to agree to disagree on this matter of "OPINION".

                          1. codejunky Silver badge

                            Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

                            You haven't "clearly shown" anything, except in your own mind.

                            So I look forward to your absolute definition of fair. Considering that both capitalism and communism and a lot of opposing arguments in between are all arguably fair. And moral too thinking about it.

                            You do understand that taxes, laws, et al are a means to an end and often determined by what sort of a society people wish to live in?

                            And so defined. So we know what laws we live under. And people abide by the law to follow the law. And they pay the minimum amount of tax because (as you say) they see little good reason to pay more JUST LIKE YOU.

                            I'm happy for non-multinationals to be competing on an even playing field

                            Me too. That doesnt mean just tax more that means even them out. That has a variety of ways to play out yeah? Instead of adding more rules to fleece more money, reduce the complexity (reducing accounting costs for all inc. gov) and reduce tax on small business so they can compete.

                            Oh, okay. You were attempting to be clever, but expressed yourself badly and are trying to blame me for not being able to mind-read the intent behind your self-congratulatory drivel. Thanks for the explanation!

                            I suggest we give up if you dont understand. I cant make it any clearer than the mass repetition of 'fair' and 'moral' are irrelevant words. If you still dont get it then it explains why this discussion hasnt got very far. You seemed to understand it far enough to attack me for using the discredited words against you. That was a hint. And I guess you have yet to find a way to get someone to take by force from someone else without it being robbery? So far I seem to be answering your posts but you offer only questions.

      2. James Micallef Silver badge

        Re: Blame governments for not achieving impossible perfection... not those who exploit that fact?

        "If the problem is that the government itself is operating in bad faith because it's in bed with big business... ... the power of the latter is one of the major corrupting influences on democracy."

        That, in a nutshell, is the problem. In modern democracy, individuals and parties need A LOT of money to even have a chance of being elected to power. They need A LOT of influence and friends in the media who can get their message out, publicise them etc. Big business is THE major contributor to individuals and parties, and it is absolutely impossible in our current version of democracy for ANYONE to get into power who is not beholden to some interest or other.

        These laws that businesses say "well, we're only abiding by the law aren't we??" are often crafted according to the desires of those very same businesses via policy groups, think-thanks and lobbyists who are directly in their pay. Parliamentarians who get to vote on the implementation of 1000+ page laws* often don't have a clue as to what's in the fine detail or what the implications are of one very subtle word choice as opposed to another.

        While Facebook etc are publically saying "we're just obeying the law, if you don't like it change the law", in private they are spending lots of money on lobbying to make sure the laws do not change in ways that disfavour them.

        *Laws really need to be as short as possible, have as few exceptions as possible, and be written in English that is clearly understandable by a 12-year old

  10. abit

    facebook is a global plague

    look us not so much less at least

  11. johnB

    Don't lump them all in the same basket

    One point that tends to get overlooked is that AFAIK Starbucks and other outfits are predominately franchise operations.

    So mostly they are local businesses who can't escape paying the panoply of PAYE, NIC, VAT, Business rates, and Corporation Tax. They also pay royalties to the multinational for the use of the name and to receive marketing support, and it's those royalties we're talking about when we excoriate the megacorp for not paying taxes here. The local guy is just a businessman trying to earn a crust, so don't boycott him / her (and no, I've no connection to any franchise operators).

  12. Alan Denman

    The thing about paying no tax..

    Is that by paying employees as little as possible net profit rockets even more.

    Corporation tax actually encourages them to pay proper wages !

  13. Message From A Self-Destructing Turnip
    Headmaster

    0 + N ≠ ∞

    Infinitely more?

    1. frank ly

      Re: 0 + N ≠ ∞

      N/0 = infinitely times more is what the heading may have tried to imply.

  14. Anonymous Coward
    Anonymous Coward

    Why ?

    Missed my history/economics lessons here:

    How does Ireland make any money by being a tax haven ? Atleast others get to collect other forms of taxes (income/sales).

    1. Triggerfish

      Re: Why ?

      I don't really think it does isn't that why it went bust so spectacularly, while at the same time still hosting some major companies?

    2. stanimir

      Re: Why ?

      The companies employ people, the latter pay income tax, buy goods and pay VAT.

      Taxing people is the sure way to collect money, the small guy can't hide/shift the taxes.

    3. Gannon (J.) Dick

      Re: Why ?

      "There was much money to be made at Spindletop, but there was even more money to lose. It is estimated that $50 million dollars was made from Spindletop, compared with investments equalling $80 million. As had happened in other booms, there were many frauds and cheats, ..."

      http://www.priweb.org/ed/pgws/history/spindletop/spindletop.html

      It all sort of all depends on the investors. They must be incredible idiots.

      Surely the Irish are as capable as the Texas Oil men.

    4. JDX Gold badge

      How does Ireland make any money by being a tax haven ?

      You have to pay tax somewhere but if you funnel all your profit into a country with a much lower taxation rate, you pay far less tax - but that country gets all of it. So for example Ireland might get tax on all of Google's EU profits, in a simple example.

      1. Anonymous Coward
        Anonymous Coward

        Re: How does Ireland make any money by being a tax haven ?

        @JDX: Thanks - In parlance of Y! answers, yours was "asker's choice"!

        I didn't realize that there was a non-zero corporation tax in Ireland (apparently @12.5% it's lower

        than most and now rest of your agrument makes sense).

    5. ecofeco Silver badge

      Re: Why ?

      Simple: Ireland doesn't, but the stockholders in Ireland do, not to mention offbook, under-the-table kickbacks and other "perks" and favors to the politicians.

    6. Alan Brown Silver badge

      Re: Why ?

      "How does Ireland make any money by being a tax haven ?"

      By charging a lower rate of tax than everyone else, all the companies cluster there - and with the complicated double handling that was going on the irish govt was getting closer to 2% tax rather than 20%, but 2% of "all EU profit" is still a lot better than 20% of "profit from this country only".

      The whole merry-go-round is being closely examined at the moment, with the result that the irish govt may see a cash bonanza as previous 2% payments are judged as "tax dodging" and the full 20% paid. This is very much "heads I win, tails you lose" as far as the irish govt is concerned - they'd still have the lowest corporate taxation in the EU, so companies would still benefit from being headquartered there.

  15. Anonymous Coward
    Anonymous Coward

    Ireland actually have to use GNP (Gross National Product) to monitor their economy due to the effect that the multi-nationals "trading" between subsidiaries has on their GDP numbers.

  16. Derek Kingscote

    Tax the Turnover

    The only way to collect tax is to tax the turnover by a percentage - say 10%

    Make all companies declare their turnover, and then we know how much tax is due.

    Low turnover is bad for the share price

    Would need a lower limit e.g. turnover <£3m then lower tax rate

    Problem with existing system reminds me of the old adage:

    ask a mathematician what 2 + 2 = and he will say precisely 4

    ask an engineer and he will say 4 plus or minus 1%

    ask an accountant and he will say "what do you want it to be?"

    Turnover tax gets everyone whether they make a profit or not

    [and face it, there are many ways to engineer a loss!]

  17. NotWorkAdmin

    Easy fix

    Just abolish corporation tax altogether. Multinationals aren't paying it, wholly UK based companies can't avoid it. The whole rotten mess is simply to the detriment of our economy and the disadvantage of businesses here.

    If theres a problem balancing the books, just ditch Trident already. And FFS don't put one more billion into that can of worms that is the Joint Strike Fighter.

  18. Dr. Mouse

    I honestly think that the solution to this is abandoning corporation tax. I know this will be unpopular, but hear me out.

    Forget corp tax. Forget calculations of profit. Any money made by a company is untaxed as long as it remains in the company. If it is re-invested, or even held as cash, it is untouched.

    As soon as it comes out of the company, the individual is taxed. This would be full income tax on everything: Wages, dividends, interest etc. While we are at it, roll up NI into income tax. It is, in effect, one and the same, a tax on income. It is much simpler to administer, too, and it encourages investment. The money will be taxed, eventually, when it leaves the company.

    This would also help clamp down on those who set up a company, take minimum wage and then the rest as deividends. Those dividends get added to their income and taxed at normal rates.

    1. James Micallef Silver badge

      @Dr Mouse

      The problem with that is that companies will just sit on their cash pile and use it to lobby for changes in the law or for 'one-time' amnesties* that allow them to extricate cash with lesser penalties. They will sell this to governments under the guise of "it will provide a big immediate boost to the economy". Politicians will fall for it because although it is bad for the country long-term, that short-term boost can secure their re-election.

      On the other hand I completely agree that all personal income be taxed at the same rate whether it is earned income, inheritance, dividend income, capital gains or whatever. Currently the working poor pay close to 0% because their wages are in the exempt bracket. Middle-class wage earners get taxed anything from 25% to 40% depending on country. Upper-middle class (specialised professionals such as doctors and engineers) can sometimes pay over 50% if they make 6-figure incomes as salary. Ultra-rich people whose income mostly consists of capital gains and dividends pay about 15% tax because these income types have lower tax rates.

      * which end up being offered at regular intervals

      1. Dr. Mouse

        "all personal income be taxed at the same rate whether it is earned income, inheritance, dividend income, capital gains or whatever"

        I will clarify: I am not advocating a flat rate income tax. I would suggest our current income tax structure is about right.

        I would also, personally, not argue for inheritance to be taxed as income. Anything passed on when you die should already have been taxed when you earned it, and I feel it is quite unfair to tax it again when you die. Passing on property, however, should be counted the same as selling it, so capital gains would apply against the estate, based on a valuation at the time of death, and capital gains would count as income to those receiving the inheritance.

  19. blokedownthepub

    Good for Ireland

    Hats off to Ireland. Simply by charging low tax rates, they rake in large amounts of tax from international companies for doing nothing.

  20. Grubby

    Don't blame the player...

    As a rapper from the early 90s once said, don't hate the player, hate the game. The reason companies can pay no tax is because the government have created a set of rules designed to let them escape it. They're only adhering to the laws that govern them. You don't drive down the road at 30 if it's national speed limit do you.

    The government needs to have a fair and simple set of tax laws that make it easy to administer, measure and control. The current set of laws are so complex that for every reason to pay there are 5 reasons not to pay. The reason it always seems to be the rich that get away with it is because to identify the loop holes you have to know the law, which is expensive. Technically if we could be bothered we could all avoid paying any tax but we don't because the return on investment doesn't add up. But if someone said to you, you could pay them a fiver and they would give you back that 20k a year you pay in tax... you would.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2021