Tax Avoidance by Big Companies

[mugsgame]

Saw something on TV today that made me think.
Amazon uses a .co.uk web address, the products it sells are stored in and shipped from UK locations. Yet it pays tax in Luxemburg.
Amazon is the biggest online retailer in the UK.

I was shocked by this, and angry. It mad me wonder how many other companies that I use do this.

If our economy is ever going to get out of this mess, and considering how the austerity measures are squeezing to less privileged amongst us I have decided to research any company that I do business and find out where they source their products and where they pay their tax.

Where possible I will not do business with companies who do not contribute to the UK. They do not deserve our business. It will make no difference if 1 person does this. But if it gathers momentum it will make a difference.

Black List: Add to please and state reason.
Amazon : Non UK Tax Payer

[LeTiss]

I used to live in Jersey, and I know there's currently a fallout there from the UK Government closing the taxation loophole on 'Low Value Consignment Relief'

If a company can reduce their tax bill, they will, regardless how ethical it is

[hgodden]

It's governments' job to regulate these companies to stop this sort of thing, but nowadays many companies are so big that most governments are on their knees to them. Just like they are on their knees to the City and just let them get on with things that caused the financial crisis. It's frightening to compare Apple's balance sheet to that of the US

[mugsgame]

Apple have more money than Poland's GDP!

I agree about Governments regulation. But like many things you can't trust a Government to.......govern properly. We need to do it ourselves.

[spreadbetting]

Where possible I will not do business with companies who do not contribute to the UK. They do not deserve our business. It will make no difference if 1 person does this. But if it gathers momentum it will make a difference.

Black List: Add to please and state reason.
Amazon : Non UK Tax Payer

Good of you to make a stand mugsgame, I'm sure you'll be contacting HMRC soon to declare your trading profits as self employed income so you can pay tax and NI on them.

[mugsgame]

Good of you to make a stand mugsgame, I'm sure you'll be contacting HMRC soon to declare your trading profits as self employed income so you can pay tax and NI on them.

Snide and way off the mark. Leave the personal stuff out of it please.

[Euler]

The big contradiction of course is that gambling companies are now going to have to pay tax on the point of consumption, but it seems online companies that are offshoring retail revenues are not?

[spreadbetting]

Good of you to make a stand mugsgame, I'm sure you'll be contacting HMRC soon to declare your trading profits as self employed income so you can pay tax and NI on them.

Snide and way off the mark. Leave the personal stuff out of it please.

I fail to see how it's snide or way off the mark, in my book there's no difference between an individual taking advantage of favourable tax terms or a company doing it also, it'd be hypocritical of me to think otherwise. It down the Government to close any supposed tax loopholes, they have much more power than me to do so.

[superfrank]

It's governments' job to regulate these companies to stop this sort of thing, but nowadays many companies are so big that most governments are on their knees to them. Just like they are on their knees to the City and just let them get on with things that caused the financial crisis. It's frightening to compare Apple's balance sheet to that of the US

couldn't agree more with this. governments are just poodles these days to the vested interests in banking and big business generally.
the currently policy of near zero interest rates and money printing have everything to do with protecting the loans books of banks and stimulating consumer spending and nothing to do with helping normal people.
when austerity really hits (and you've got to remember that it's not even started yet) the people who will pay will be normal people, especially the young and unborn.

[steven1976]

Welcome to the EU! http://www.forbes.com/sites/timworstall ... in-the-uk/

[CaerMyrddin]

This is happening all accross EU, most of the big companies are now based in Luxembourg or the Nederlands. Imho, you are asking yourselves the wrong questions.

Why isn't the UK (or in my case Portugal) attractive enough for a company to decide to be based there/here? What should be done to achieve this?

If the other coutries are doing it, it is just a matter of being competitive.

[steven1976]

Im not sure, but werent Ireland doing the same as luxumberg a few years ago? All the big companies like microsoft (i think) were running there because of the low taxes but is it the way to go?

The scary part will be when all the banks run away to tax havens. As much as everyone hates the banks, what kind of exports do the UK have apart from banks these days to bring new money into our once great export economy?

[Dublin_Flyer]

Im not sure, but werent Ireland doing the same as luxumberg a few years ago? All the big companies like microsoft (i think) were running there because of the low taxes but is it the way to go?

Correct Steven, Microsoft, Intel, Pfizer, Google, Ebay, IBM, Dell, Glaxosmithkline and Elan among many others pay very low corporate tax here, I think currently it's 9% or thereabouts compared to over 20% in many other EU countries plus the highly skilled/3rd level educated workforce is very favouring for them.

The tax on profits is very low, but the knock on effects of large employers like those i.e. taking people off the dole queue, then those employees paying PAYE, PRSI, USC among other taxes, business for logistics companies to transport their goods/services/services etc makes it worthwhile here.

Dell were one of the first big ones to jump ship, they went to Poland where the unskilled labour (putting bits into computer, pass it on, putting bits into computer pass it on) was much cheaper in Poland. Minimum wage here at one stage was €8.65, about £7.10 I think. This applies to all full time workers legally employed, from the McBurger worker who is run off their feet down to the person who serves 2 cups of tea per hour in a small cafe in a city centre side street.

When the boom times hit here, the government increased salaries for public service workers constantly, the unions followed suit and demanded increases to the minimum wage level, and because of the high earnings, the cost of living spiraled out of control.

What is never taken into account when job losses are announced is twofold - of an average worker,PAYE (standard tax) of about €230 per month is taken out of the government inbox, PRSI (healthcare support kinda) takes out less, not sure of the figure. USC (Universal social charge, the tax imposed to pay for bailing out the banks) takes out about the same as PAYE in my payslip. Then for the standard married 2 kids guy, their private healthcare ~€150 per month is also taken out of the inbox. Say for example, John payed €800 per month in tax.

John loses his job so now claims the dole, rent allowance, child allowance(given regardless of employment) etc, his income from the state is maybe €1100 per month.
It's nothing huge but it's -800 + (-1100) per month so the state is up 800 when he is working, and down 1900 when he isn't. Taking into account he is on much lower income he has very little disposable income to put back into the economy.

Johns 9 co-workers are all in the same situation and lose their jobs, +800*10 working, -1900*10 not working. It begins to add up.

Big companies taxes are irrelevant for the most part, it's the employment that brings the money from them back into the state coffers and turns the red into a green. The Irish government got caught out on a +800 +800 +800 +800 +800 SHIT!! -1100 -1100 -1100 -1100 -1100 -1100 system.

Martingale system anyone? Always works!!

[Euler]

How the Tax Man Followed Amazon and Apple to the Cloud Computing Party

http://www.forbes.com/sites/erikamorphy ... ing-party/