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Author
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Topic: Corporate Tax Evasion
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 1 of 100 (681641)
11-27-2012 8:24 AM
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Corporate tax evasion has become quite a big issue in the UK. Things like the Occupy movement and Uk Uncut have raised awareness of this as an issue and it has now reached the mainstream political arena. Recently 3 multinationals (Google, Amazon and Starbucks) were called to account for their activities by the public accounts committee with some quite amusing results:
Amazon, Google and Starbucks At one point the Amazon rep was accused of "unacceptable nonsense" and dismissed on the basis that someone who actually knows what they are talking about needs to answer questions in a soon to be arranged follow-up. So my question: What should be done? Should we tread carefully and treat these multinational companies with special privileges because we desperately need the jobs and economic activity these hugely beneficial multinationals generate? Or would we be better off imposing the most stringent tax regimes possible on these blood-sucking multinationals so that local companies who do pay local taxes and employ local people can step in to the space these multinationals threaten to vacate if they are properly taxed? Or something in-between...? If so what?
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 4 of 100 (681645)
11-27-2012 9:04 AM
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Reply to: Message 2 by Larni
11-27-2012 8:37 AM
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Do other Western countries successfully stop tax evasion of this sort? Are there any other nation's whose laws we could emulate?
Larni writes: Change the law; problem solved. Well it sounds easy.....
| This message is a reply to: | | | Message 2 by Larni, posted 11-27-2012 8:37 AM | | Larni has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 5 of 100 (681648)
11-27-2012 9:15 AM
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Reply to: Message 3 by vimesey
11-27-2012 9:03 AM
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24 Percent
I broadly agree. I would just correct your figures by pointing out that UK corp tax is presently 24 percent (and falling)
Link writes: Reducing the main rate of corporation tax by an additional one per cent, so that the rate will reduce from 26 per cent to 24 per cent in April 2012, to 23 per cent in April 2013 and will come down to 22 per cent by April 2014. Treasury Link So of 500Million 120Million would be paid in tax.
Vimes writes: Our politicians should grow a pair or two. But they don't. Why? Are they genuinely fearful that the economy will be left devastated by big-business fleeing the UK? Are they ideologically bound to Adam Smiths invisible hand such that any action by government is seen as interference in some sort of 'natural' state? Are the part of an economic elite consciously out to screw the workers for all they are worth? Are they just not very bright and being manipulated by big business? Does the requirement for money to win elections mean that they effectively have no choice but to pander to big business if they want to get elected? What is it that stops them tackling the situation? I don't know (and I'm not asking you specifically to answer all those questions). I'm just throwing out some questions.
| This message is a reply to: | | | Message 3 by vimesey, posted 11-27-2012 9:03 AM | | vimesey has replied |
| Replies to this message: | | | Message 6 by vimesey, posted 11-27-2012 9:37 AM | | Straggler has replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 7 of 100 (681653)
11-27-2012 10:05 AM
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Reply to: Message 6 by vimesey
11-27-2012 9:37 AM
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Will They Leave? Would It Be So Terrible If They Did?
I think the Occupy movement (indirectly) and UK Uncut (directly) have done quite a lot to get this question (how valid is the assumption that companies really will leave these shores if they are taxed properly) into the mainstream. Obviously the current economic climate does a lot to raise the profile of the issue too. But it still isn’t challenged enough when the euphemistic cry of ‘We need to demonstrate that Britain is open for business’ is used to justify aspects of existing thinking and policy. I would also ask the question how much it would really matter if some of the companies did up-sticks and leave or even significantly scale back their operation. If Starbucks left the UK would people stop going for coffee? Or would local-tax-paying companies and even independent coffee shops take over the vacated premises? Could it actually be a good thing for the UK economy if some of these tax-avoiding multinationals left the market-space so that it could be filled by others who don’t have an army of tax evasion lawyers at their disposal? Again — I don’t know. But it seems to me to be a question that needs to at least be asked.
| This message is a reply to: | | | Message 6 by vimesey, posted 11-27-2012 9:37 AM | | vimesey has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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I'm a higher rate taxpayer in the UK. If Starbucks were actually paying the tax they are supposed to they would pay corp tax at about half the rate I pay in income tax. But they aren't even paying that. You consider this a good situation?
| This message is a reply to: | | | Message 8 by foreveryoung, posted 11-27-2012 11:09 AM | | foreveryoung has replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Do you consider large scale corporate tax evasion to be a good thing?
F writes: If they were not paying the tax they were LEGALLY supposed to be paying, they would be in prison. So the law is at fault here. Gosh are you suggesting that markets alone won't always result in the best outcome and that appropriate regulation is therefore required?
F writes: If you want them to pay more, then simplify the tax code. "Simplify" in what way and how will "simplifying" in this manner help the situation?
F writes: You won't do that though because the tax code was written by uppity liberals like yourself to suit your own societal engineering utopian ideas. Which "utopian ideas" would those be? The "utopian idea" that what is good for giant corporations siphoning money out of the economy may not be what is best for the local economy in question? Edited by Straggler, : No reason given.
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Simplifying Corporation Tax
Straggler writes: "Simplify" in what way and how will "simplifying" in this manner help the situation? F writes: If you simplify the tax code, there are no loopholes that will let you "evade" taxes. OK. So, in your view, simplifying corporation tax is the key to increasing revenues accrued from corporate tax. Is that correct? In what way would you simplify corporation tax so that the loopholes currently being exploited would be eliminated? I genuinely want to know. Edited by Straggler, : No reason given.
| This message is a reply to: | | | Message 21 by foreveryoung, posted 11-27-2012 2:33 PM | | foreveryoung has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Re: Freedom of choice?
F writes: I was talking about normal people like the tea party people; This is very off-topic but if the Tea Party are "normal" people how did the democrats with Obama at their helm win the last two general elections? Because I would have thought that would require a sizeable amount of "normal people" to have voted for him..... No?
| This message is a reply to: | | | Message 31 by foreveryoung, posted 11-27-2012 3:05 PM | | foreveryoung has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 44 of 100 (681762)
11-27-2012 5:44 PM
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Reply to: Message 18 by cavediver
11-27-2012 1:46 PM
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Cavedeiver writes: You are still paying tax, sometimes perhaps not much less than you would if you paid it all in say the UK, but you are still paying a bit less. The issue is that country X sees that tax revenue and not the UK. I might be wrong but didn't the one of these companies that is based in Ireland (Google?) pay something like 300 million in tax in Ireland? On billions of pounds of profit that doesn't seem very much and I'm sure the Irish corp tax isn't that much lower than the UK's. I can check these figures if you think they are substantially wrong. But I guess my point is that full corporation tax doesn't seem to be being paid by these companies anywhere. Even the places they nominally operate out of seem to see only a fraction of it.
| This message is a reply to: | | | Message 18 by cavediver, posted 11-27-2012 1:46 PM | | cavediver has replied |
| Replies to this message: | | | Message 46 by cavediver, posted 11-27-2012 6:05 PM | | Straggler has replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 48 of 100 (681774)
11-27-2012 6:07 PM
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Reply to: Message 46 by cavediver
11-27-2012 6:05 PM
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So (short of world government) what is to be done? Invade Bermuda.....?
| This message is a reply to: | | | Message 46 by cavediver, posted 11-27-2012 6:05 PM | | cavediver has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Re: Freedom of choice?
To get it very on topic - What are some examples of Romney's corporate tax evasion?
| This message is a reply to: | | | Message 47 by Omnivorous, posted 11-27-2012 6:06 PM | | Omnivorous has replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 83 of 100 (682528)
12-03-2012 12:44 PM
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Starbucks to "review" UK tax arrangements
The Amazon, Google, Starbucks tax debacle rumbles on. But it seems as a result of public pressure Starbucks is now going to "review" it's UK tax arrangements.
quote:
On Saturday night, Starbucks announced that it is reviewing its tax approach to Britain with a view to paying more following widespread criticism of the coffee chain's tax regime.
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Troy Alstead, Starbucks' global chief financial officer, claimed that the firm has lost money in the 15 years it has been operating in the UK except in 2006. The world's biggest coffee chain paid 8.6m in total UK tax over 13 years during which it recorded sales of 3.1bn. Alstead's claim was "difficult to believe" when contrasted with boasts of success sent to shareholders, according to the report. Starbucks has been able to cut its tax bill, MPs said, by paying fees to other parts of its global business, such as royalty payments for use of the brand.
Link
| Replies to this message: | | | Message 84 by Panda, posted 12-03-2012 1:06 PM | | Straggler has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 86 of 100 (682609)
12-04-2012 6:35 AM
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Reply to: Message 85 by Tangle
12-03-2012 1:19 PM
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Re: Starbucks to "review" UK tax arrangements
Now Starbucks are under fire for their employment practices...
quote:
Starbucks is cutting paid lunch breaks, sick leave and maternity benefits for thousands of British workers, sparking fresh anger over its business practices. On the day the House of Commons' public accounts committee branded the US coffee chain's tax avoidance practices "immoral", baristas arriving for work were told to sign revised employment terms, which include the removal of paid 30-minute lunch breaks and paid sick leave for the first day of illness. Some will also see pay increases frozen. The changes affecting about 7,000 coffee shop staff emerged as the company tried to quell public and political outrage at its use of secretive company structures that has seen it pay just 8.6m in UK tax over the past 13 years on sales of 3.1bn.
Is there a point at which public anger against a corporation can actually causes a change of corporate behaviour? Is there any precedent for such a thing? If so are Starbucks potentially heading for some sort of backlash? Or is 'consumer power' a much hyped but ultimately overly-dispersed and thus ineffectual method of changing anything much at all? I don't know.....
| This message is a reply to: | | | Message 85 by Tangle, posted 12-03-2012 1:19 PM | | Tangle has not replied |
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Re: Let's up the cost of Starbucks to 2.30
Petro writes: Since it hasn't been asked by any of the septics or others here, why did you title this "Corporate Tax Evasion" when in 6 pages you have provided no evidence of evasion? Because in every sense except the strict letter of the law it obviously is evasion. The fact that Starbucks has "reviewed" it's UK tax arrangements and found them wanting would seem to confirm this would it not?
Petro writes: I do support an increased tax on Starbucks the end result will be the cost will be maybe 2.30 instead of the about 2.10 it is now. What is stopping them charging 2.30 at the moment? Their social conscience.....?
Petro writes: Well actually you will pay it along with all the other Starbucks drinkers, corporations pass taxes along in the cost of their product. If Starbucks in the UK is as unprofitable as it originally claimed maybe it would be best to put it out of it's misery and let a more competent profit-making coffee provider have a go instead?
Petro writes: I wish you luck. If you are successful you and the British government can show the populace you have forced Starbucks to be socially responsible at "no increased cost to the citizens". Are you suggesting that Adam Smiths invisible hand alone cannot be relied upon to produce "socially responsible" corporations? Shame on you!!!!
Petro writes: In no way do I think you are being played for a fool by your government, which happens to be interested in increasing your tax on premade coffee drinks. I am under no delusion that the present UK government has my best interests at heart.
Petro writes: It's all about getting an evil company to pay its fair share. Corporations will almost invariably use their power to exploit the markets they operate in to their maximum profit advantage. Amongst other things this means they will pay as little tax as they can get away with and pay their workforce as little as they can get away with. For reasons that should be obvious what is best for the corporation is therefore not necessarily what is best for the society/nation in which it operates.
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Straggler
Member Posts: 10333 From: London England Joined: 09-30-2006
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Message 92 of 100 (683087)
12-07-2012 11:49 AM
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Starbucks
Starbucks have now rather randomly decided that 10 million pounds for each of the next two years is what they will pay in tax. Quite how they arrive at this figure is a bit of a mystery....
Link writes: The decision by Starbucks to voluntarily pay 10m in taxes in each of the next two years has come under fire from critics who say the move makes a mockery of the tax system, while the tax authorities reaffirmed that corporation tax was not voluntary. Prem Sikka, professor of accountancy at Essex University, criticised "private sweetheart deals" with HMRC, saying this would send a bad signal to other businesses. On Starbucks, he said it was important to know to which part of the past years the 10m figure relates. He told the BBC Radio 4 Today programme on Friday: "The last four years they declared a loss of about 145m, so are they saying this 10m relates to the past four years? "It is a practice of HRMC also to charge interest and penalties for late payments. How exactly is this 10m arrived at? We have absolutely no idea and really Starbucks should publish all its tax correspondence and the tax computation so we can all see." Sikka said it should be a standard requirement for all multinationals to allow the public to see their contributions to the public purse. "We should really get them to publish a table which shows the jurisdictions they are operating from. What their sales are, the costs are, their employees are, and the taxes they are paying in each country. So if we find a company that is booking about $16bn of tax revenue in Ireland with only 80 staff, we should be highly suspicious. We haven't really reformed anything about corporate accountability." Link
| Replies to this message: | | | Message 96 by Huntard, posted 12-07-2012 3:09 PM | | Straggler has replied |
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