Is austerity working- and will it ever end?

[woodview]

Amazon is a foreign company, taxes on companies are based on where the company has their headquarters. The UK has done well with international companies having their headquarters in the UK, because we are a low tax country.

A number of companies, including McDonald’s and Starbucks, have moved headquarters or other parts of their operations to the UK.

Do you have any sales outside of the UK? If you did you would pay UK taxes on the profit from selling abroad.

 

 

Official public finance data, found the UK government had raised £56bn from corporation tax during the 2016-17 financial year, a 21 per cent increase from the previous year.

I have said it is legal, but in most peoples opinion, it is wrong.

Yes, I sell overseas, but have no overseas operations, hence I only pay UK tax.

Amazon made £72m on its uk based operation, but only paid a fraction of what other companies pay.

Any suggestion on what services take the hit on the missing tax revenue? Or each of us Sheffield taxpayers just need to chip in £75 each to make up the difference, if you think that's preferable?

[ECCOnoob]

I am sure they do. But, this is an argument that has been done to death.

 

We dont have a court of morals. We dont sue people and companies on what their moral decisions should be.

 

The law is just that. Law.

 

How much does a company LEGALLY have to pay in taxes. That's what they pay.

 

For all those chanting how "wrong" it is- go and ask them whether they would choose to pay more than the taxman says they legally have to. Be interested to see the response.

 

Lets get to the nub of the issue.

 

Is it morally right? No.

 

Does the law need changing? Probably yes.

 

Are people free to not to use such a company to make a stand? Yes.

 

Do they actually boycot? No - because consumers too ignore their "morals" when it suits them to get the low low prices and convenience that such global companies offer.

 

Maybe as a business selling overseas you too should follow the advice that other companies have taken. HQ abroad and then you too could gain the benefits of these perfectly legal tax reductions.

 

Maximise profit and limit outgoings is all what running a business is about isnt it?

Edited October 7, 2018 by ECCOnoob

[Cyclone]

It's perfectly valid to argue that the law isn't correct though. Your argument is circular, the law is the law. Yes, and it can be changed when society finds that it's wrong.

 

---------- Post added 07-10-2018 at 13:40 ----------

 

A number of companies, including McDonald’s and Starbucks, have moved headquarters or other parts of their operations to the UK.

 

Neither of these companies is headquartered in the UK, and Starbucks is well known for its aggressive tax avoidance. Hardly an example we want to hold up as being a good corporate citizen.

 

---------- Post added 07-10-2018 at 13:42 ----------

 

Amazon is a foreign company, taxes on companies are based on where the company has their headquarters.

 

That's not really true is it.

 

Look at the example of Apple, it deliberately keeps profit offshore from the US because if it repatriates them it will then have to pay US tax on them.

Most international companies operate through wholly owned subsidiary companies in the various countries in which they operate, amazon is the same, it isn't a single company from a legal point of view at all and it doesn't simply pay US tax on profit from all over the world.

[woodview]

I am sure they do. But, this is an argument that has been done to death.

 

We dont have a court of morals. We dont sue people and companies on what their moral decisions should be.

 

The law is just that. Law.

 

How much does a company LEGALLY have to pay in taxes. That's what they pay.

 

For all those chanting how "wrong" it is- go and ask them whether they would choose to pay more than the taxman says they legally have to. Be interested to see the response.

 

Lets get to the nub of the issue.

 

Is it morally right? No.

 

Does the law need changing? Probably yes.

 

Are people free to not to use such a company to make a stand? Yes.

 

Do they actually boycot? No - because consumers too ignore their "morals" when it suits them to get the low low prices and convenience that such global companies offer.

 

Maybe as a business selling overseas you too should follow the advice that other companies have taken. HQ abroad and then you too could gain the benefits of these perfectly legal tax reductions.

 

Maximise profit and limit outgoings is all what running a business is about isnt it?

Well, hq overseas and a complex corporate structure isn't viable for most SMEs.

I think the point most people who are expressing a concern is to change the law to ensure uk based profits are taxed at the uk rate. I don't think that's too whacky is it?

Surely all entities and individuals paying the *intended* amount is something we should strive to ensure happens.

[ECCOnoob]

No i'm sure it isnt "too whacky". I would even go as far as fully agreeing that something needs to be done and the whole system needs a massive shake up with major focus on simplifying.

 

But like most opinions from the general masses, its never as black and white as they like to think.

 

We can all say X about "UK profit". but just what is that exactly.

 

We are talking huge multinational organisations with operations in 1001 different places, some or none of which are necessarilly defined in law as their "base".

 

We are talking about sales from 1001 different places done either in a physical location which may well be deemed as a "UK" transaction or we could be talking about an online transaction where the customer may be in the "UK" but the sale is processed in dublin or china or singapore or even button moon. Now, does that count as a UK profit?

 

Even if it was legally deemed to be a "UK" sale transaction, that doesn't automatically mean that is is profitable to the company who perhaps at that very moment was overall making a loss.

 

We have an entire global world industry operating where the customer may be in the UK, goods manufactured in China, wholesaler based in the USA and sales transactions not being done by the company directly but through a member of the Joe Public acting as their own online sales agent or product distributor based in say, Ireland paying money to another company whose sole business is to take a tiny fraction of the commission of that online based muti-country involved product sale through their own offshore based subsidiary company based in the Camen Islands.

 

So, what stripping all that apart, the question is where is the "profit" deemed derived from? What location applies? Who makes the money? What is the offset outgoings?

 

.......This is is obviously an OTT example but the point is clear.

 

These are the sort of complicated issues that we are dealing with here. Issues that the wider, uninformed and simplistic opinions of the masses (even even some of our more gobby politicians) never take into consideration.

 

In other words, its just not that simple.

Edited October 7, 2018 by ECCOnoob

[woodview]

So, what stripping all that apart, the question is where is the "profit" deemed derived from? What location applies? Who makes the money? What is the offset outgoings?

 

.......This is is obviously an OTT example but the point is clear.

 

These are the sort of complicated issues that we are dealing with here. Issues that the wider, uninformed and simplistic opinions of the masses (even even some of our more gobby politicians) never take into consideration.

 

In other words, its just not that simple.

Unfortunately all these 'uniformed masses' aren't as well informed and intelligent as you.

However complex the issue may be, or you might find it, Amazon UK Services Ltd posted a £74m profit, for its operations in the UK. It paid £1.7m in corporation tax. That's 2% for the simplistic amongst us.

It's not hidden by a complex carribean shell, it is a UK companies posted profits.

[El Cid]

Neither of these companies is headquartered in the UK, and Starbucks is well known for its aggressive tax avoidance. Hardly an example we want to hold up as being a good corporate citizen.

 

I am no expert on corporation tax, its just what I read, I know a story can be made from thin air

 

McDonald's is to move its non-US tax base from Luxembourg to the UK, the company has said.(December 2016)

 

https://www.bbc.co.uk/news/business-38252802

[Anna B]

The Tax law regarding Amazon and other similar companies can, and should, be changed.

 

It's been ten years since the crash so they've had plenty of time to do it. Occupy was on about this all those years ago when camped outside the cathedral, and it's got a whole lot worse since then.

 

The truth is the Conservatives simply don't have the will to change it. Instead they prefer to raise revenue by targeting soft options and those who can't fight back. It's grossly unfair and they know it, but refuse to do anything about it. Small businesses don't stand a chance. The world is being taken over by these mega-corporations, and the government are just sitting back and allowing it to happen.

[Cyclone]

It's really not that easy is it. It can only be changed if most countries in the world agree to the change, otherwise it simply doesn't work.

 

---------- Post added 08-10-2018 at 06:50 ----------

 

I am no expert on corporation tax, its just what I read, I know a story can be made from thin air

 

 

 

https://www.bbc.co.uk/news/business-38252802

 

non-US meaning that it is still very much headquartered in the US where it's US tax base and headquarters is located.

 

---------- Post added 08-10-2018 at 06:52 ----------

 

Unfortunately all these 'uniformed masses' aren't as well informed and intelligent as you.

However complex the issue may be, or you might find it, Amazon UK Services Ltd posted a £74m profit, for its operations in the UK. It paid £1.7m in corporation tax. That's 2% for the simplistic amongst us.

It's not hidden by a complex carribean shell, it is a UK companies posted profits.

 

The reason that profit was so low though isn't because Amazon is just scraping by (that profit on £2billion of revenue btw).

It's because it offshores the profit, through licensing and other agreements with companies also called Amazon but based in other countries. The profit ends up there, in other low tax locations and is taxed at those rates, far from where the revenue occured.

It's easy to see, but difficult to legislate to stop.

[El Cid]

non-US meaning that it is still very much headquartered in the US where it's US tax base and headquarters is located.

 

I am glad at least you understand that a company pays taxes based on where its headquarters are.