Don't forget to leave a rating: Amazon chairman meeting with UK prime minister to talk taxes Britain's towheaded Prime Minister Boris Johnson has been granted an audience with Amazon tycoon Jeff Bezos, during which they will discuss the “challenges” of taxing giant tech corporations in a digital economy. BoJo, whose full name is Alexander Boris de Pfeffel Johnson, is flying to Washington DC this week to meet US …
The philosophy of taxation has been argued over for, literally, millennia. Julius Caesar was assassinated in part because he wanted to tax the rich landowners more. More recently rich people who own companies have claimed they shouldn't have to pay tax on their personal income as they 'provide jobs' for lots of people who do pay taxes (and, in the UK, National Insurance). Then, of course there is the 'only the little people pay taxes' attitude of some rich folk.
I don't doubt that Mr Bezos is just as keen to avoid (rather than evade) as much tax as possible, so he can play with his rockets. And I don't doubt that Boris will be as unsuccessful at getting the rich multinational corporations to pay taxes in the countries where they do business as other politicians have been.
Now I must look into how much I can put into my ISA this year...
Can not upvote your comment enough. Yes it is truly awful to see these billionaires squander cash on “my rocket goes higher than yours” projects, but where is the point of caring about this any more? They are not going to pay tax simply because of how outraged we are at their behaviour or indeed because Boris asks them to pay a bit more.
@David Nash
"Absolutely, as long as they pay a fair share of tax."
The problem is defining how much theft is fair. How much should be stolen at the point of a gun is fair? Thats not just for the rich but a question very well unanswered and with little by way of resolution.
And this is to governments with a golden track record of carefully managing peoples money for the good of the people (try to say that without laughing)
Amazon isn't alone is trying to legally minimise its local tax liabilities
I am not sure if transactions that are designed to avoid tax are still legal, certainly HMRC can tax them, there is just no will to do so - especially when you have a Chancellor with quite a few glaring conflict of interests, but that's just my opinion.
The problem of taxing companies will always exist as long as they are taxed on profit not revenue... and yet taxing on revenue makes little sense either as it would be highly unfair on low-margin companies. The 'minimum 15%' tax is, I think, a good way forward, since most countries' headline rates are higher than that but in practice large international companies use various loopholes to get lower rates. Besides big OECD countries banding together to impose the minimum 15%, include provisions that disallow any expense deductions paid to any country that does NOT impose a 15% minimum. So Megacorp declares 1bn income and 999mln expenses, if say 99 mln expenses are paid to suppliers (usually sister or parent companies) based in the caribbean that don't have 15% minimum tax, then they are taxed min 15% on 100mln profits. That both discourages transfer pricing shenanigans from megacorps and reduces income flows to tax havens unless they up their rates. Of course the 15% has to be a real 15% with no special rebates and no deductions beyond what is a normal business expense.
Step two, instead of taxing salaried employees at 40+%* on top of NI, and rent-gatherers 10-20% on dividends and capital gains income, make all income the same and tax it at the same rate.
*varies by country but most of western Europe has brackets in that area.
We already tax some small businesses on revenue using income tax rates and NI, which for some enterprises means over 50% of effective tax rate, without pretty much any deductions.
I am referring to IR35 changes which was designed to kill off independent IT shops from participating in public sector contracts, but now that it was introduced in private sector it also killed small haulage businesses and others.
It's quite interesting how much deception and propaganda was behind it - they (Treasury, HMRC) put up a fuss that allegedly these small businesses are created to avoid paying tax (without any hard evidence) - there were also plenty of troll accounts on social media claiming these businesses don't pay tax at all and so on. MPs got duped and waved it through, despite the reports predicting the incoming disaster if it goes live.
The original IR35 slogan was to prevent a situation when employee quits on Friday and becomes a contractor on Monday at the same company. Many MPs still believe that this is exactly what it is - but the new changes actually flip it on its head and encourage it! Because now company can declare worker in scope of IR35, absolving themselves from any liabilities coming from Employment Law and from the tax man.
So they killed 2 birds with one stone - created zero rights employment for big corporations to explore freely (fire and rehire) and removed competition from small business.
I thought IR35 was a tax dodge optimisation to allow programmers to carry on doing the same job in the same office for the same employer but pay themselves in low-tax dividends and claim their car, meals and mortgage as business expenses. I didn't realise it was revolutionary praxis by the oppressed masses against global corporatism.
Comrades, come rally .... you have nothing to lose except your tax write offs
I thought IR35 was a tax dodge optimisation to allow programmers to carry on doing the same job in the same office for the same employer but pay themselves in low-tax dividends and claim their car, meals and mortgage as business expenses. I didn't realise it was revolutionary praxis by the oppressed masses against global corporatism.
Yes, that's exactly the propaganda, usually spread by envious people without doing any fact checking.
"but pay themselves in low-tax dividends" - dividends are coming from profits, which you pay Corporation Tax on top. If you do the numbers, you will find it becomes pretty much the same as PAYE.
"and claim their car, meals and mortgage as business expenses." - this is nonsense. Maybe if you do your own accounting and indeed claim everything, the tax man will come knocking eventually.
If you are claiming legitimate expenses, you are not doing anything different than any other business.
Since 2017, the only advantage a company could get from turning employee into a contractor was saving of Employer's NI and also they no longer had to bother about obligations coming from Employment Law. This is something probably a desperate company would do, that was no longer able to afford to have employees, but it wasn't a model to avoid tax on a large scale.
Workers could be deceived by the fact their newly formed company does not pay tax immediately upon receiving payment for invoices, but once a year. Someone not familiar how business works could indeed think they don't have to pay tax and brag about it only to be in for a huge surprise.
The challenge is simply to grow a backbone and start making them fucking pay. You don't go and discuss it with the guy who doesn't want to pay, and beg him to pretty please pay a bit more so it looks like you've scored some sort of victory and in return you'll ease off the other stuff about regulation and worker's rights.... unless of course you're a cynical, useless prat who doesn't really think the rich should pay for anything, as you intend to very much be one of them once you're bored with playing at being prime minister.
unless of course you're a cynical, useless prat who doesn't really think the rich should pay for anything, as you intend to very much be one of them once you're bored with playing at being prime minister.
or if you want to go on luxury holiday or get a new flashy wallpaper...
Ignoring your joke alert and treating it seriously. Any simple tax code will quickly run into the fact that the real world is full of corner cases.
For instance take the idea of taxing a company on revenue rather than profits. What happens when a company goes through a difficult patch, as many have done recently, or is starting up and ploughing receipts back into building its infrastructure? Revenue exceeds expenses so the business is running at a loss. Taxing it on revenue simply helps run it into the ground in the former case and in the latter, at best, stops it developing into the tax generating enterprise it could become.
What happens if a company has no revenue but happens o be holding some asset which is growing in value so that its value is increasing?
Not saying it is Simple to write a simple tax code but there should be a better way to write it than just adding more on top of the wobbly tower that is the current tax code.
As for the idea of taxing a company on revenue rather than profits it makes a good sounds bite but it is rather a poor idea.
Taxing profits is a better choice but with business structuring themselves to use tax heavens to avoid it that becomes a problem. At one point world trade needed tax heavens for trade to work. Are they still need them with the world being more connected? Not that getting rid of them is going to happen anytime soon.
Assets are something that would only be taxed if the country has a wealth tax in which case you pay that tax on the value of the asset. The only thing it going up or going down in value changes is how much you pay.
As for the idea of taxing a company on revenue rather than profits it makes a good sounds bite but it is rather a poor idea.
As we have seen with VAT - which can be viewed as a per transaction revenue tax, there is much room for avoidance, as evidenced by Amazon.co.uk conducting much business out of Luxembourg.
> The Stalin route 'it all belongs to the peoples'
The Stalin route was actually 'it all belongs to the peoples but I'm the only person who's allowed to decide how it's spent (death to anyone who disagrees)' swiftly followed by appallingly bad decisions on how it was spent.
We've just bricked off our tunnel to the EU (and try hard to build a wall on top, to make sure we hurt ourselves even harder), and we have neither natural resources (helium3, etc.) nor ANY assets that the world is desperate to have and willing to pay high price for. NOR any plan WHAT to do anything about the two minor issues. So Boris-get-brexit-done is in no position to grow a backbone and make them fucking pay.
Charlotte Johnson Wahl, who incidentally passed away this week is quoted...
She once recalled how the prime minister got his name – when, after an uncomfortable Greyhound bus journey to Mexico City while three months pregnant, a man named Boris Litwin, whom they were staying with, gave them two first-class plane tickets for the journey back. “I was so grateful, I said: ‘Whatever the baby is, I shall call it Boris.’”
She later changed her mind and called him Alexander Boris de Pfeffel: “At Eton, his friends discovered his foreign name and everyone started calling him Boris – even the [teachers]. But everyone who’s known him since childhood calls him Alexander. If I were to call him Boris it would mean something was really serious.”
Looks like Boris picked up the tendency to let others pickup the tab (holidays, home decorating etc) from before he was born
As ever, this is a PR stunt. If the government was serious about this problem, instead of papering layer upon layer of additional complexity (thus creating loopholes), they would vastly simplify the system to remove opportunities to evade. The Conservatives have never been shy of indulging in complex legalese in order to benefit their rich mates. I don't doubt other parties are guilty too, but not nearly so blatantly.
There isn't a single nation solution to the tax avoidance employed by Starbucks (amongst others) where they basically "dont" make a profit in the UK because all of their proceeds go towards loans taken "offshore"; though of course they make a profit in the country hosting the loans.
Every nation state wants a piece of the pie, and knows it can get it by having a slightly more favourable arrangement than others do.
Britain used to be a financial services hub of global proportions, but, for whatever reason, we voted to make it more difficult to work here and the cashflow has visibly drifted to other countries; reducing our slice of pie. Chuck in the beginnings of an economic crash, inflation bombs, shipping costs exploding, and not enough raw materials to go around (see wholesale gas prices) one simply has to get this house in order, NOW.
Until Amazon are paying 20% on income over 12,571 they aren't on tax parity with my income - or anyone else that hasn't the budget to set up offices all over the world (plus lawyers and creative accountants) to evade tax.
The only good news is just about every other medium to large population nation state is in (almost) as dire a mess. The question is now who will be the first to break. (China looking extremely ropey, see Evergreene). And when things do break, what then? (Maybe I should invest in a chicken coop, chickens and eggs are always valuable in a barter economy).
do you write a law that taxes every company on income even if their expenses exceed that and they're currently running at a loss?
We already do that for some small businesses (see my other comment about IR35 changes). Not sure why is it okay for a small guy to pay 50% tax on revenue and big billionaire rocket man's business can pay nothing in comparison. Our tax system is corrupt to the core and needs to be reformed.
That being said, we already have special law for the likes of Amazon - Diverted Profit Tax, but it is rather discretionary for HMRC to apply. They are either too lazy to ask Amazon for their accounting books or they don't want to upset Chancellors family friend. It's definitely easier for HMRC to kneel on small business neck to find some wrongly allocated expenses and recover some pennies than go through billions of transactions trying to find which ones are defrauding the tax payer. It's all playing to the hands of big corporations - clever people run small businesses and once they no longer can, they'll have to find another way of putting bread on the table, which eventually is going to be wage slaving for Amazon or the likes.
> Until Amazon are paying 20% on income over 12,571 they aren't on tax parity with my income
Of course they are, you get tax allowances and deductible expenses, and pay tax on your net income after those are deducted. So does Amazon. Their expenses are different (e.g. buying goods to sell) and surely a much larger proportion of tital income than in your own case.
Never in history a ruling elite has surrendered its riches without a fight.
Elites currently own all the media outlets and have enough funds to support all sides of the political spectrum creating a situation where everyone is their friend.
Any politician who dares to deviate from walking between the narrow lines drawn out for them, will be obliterated by their media big guns.
The billionaires are happy with paying less than 5%, the average middle class John Doe in Europe pays between 50%-70% in taxes, including taxes on gas, taxes the on car he needs to go to work with, community taxes, and the plethora of taxes imposed by the latest climate change marketing gag. This is not counting the destructive monetary policies of the ECB, wiping their pensions and bank accounts.
Time will tell if society manages to rid itself of its enslavement by governments colluding with the rich elites. History teaches us it will be messy.
Hi Jeff!
Hi Boris!
So Jeff, I've been thinking...
Let me stop you right there, Boris. I've been thinking and Amazon really needs a man of your stature on the board. Don't worry, you won't have to do any work or anything like that, but it does come with a decent remuneration of let's say £100K p.a. How does that sound?
That sounds super!
So you were saying?
Oh nothing! Just thought I'd say what a bang up job your company is doing and how I admire its contribution to Global Britain!
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
