Eric Schmidt defends Google's teeny UK tax payouts - again Eric Schmidt has once again said that it was totally fine for Google to pay just £6m in UK corporation tax - even though it's a multi-billion dollar company. Google was one of several big multinationals, including Starbucks and Amazon, that were singled out for criticism over how little tax they pay in Blighty. With regular …
Don't use Google! If you are concerned about their not paying tax then don't use their websites, encourage your family, friends and neighbours to do the same and get them to encourage others to take the same approach. By not using Google you impact on their business and thus their profits.
Of course no one will do the above as it actually means thinking about what your internet usage and maybe finding a UK search engine that can offer similar functions and services as Google but it is the only way to impact on them. It was the reason Starbucks decided to "donate" some tax, they saw a major loss of business on the horizon and acted to try and circumvent it.
Blame the MPs. No one else. They decide the tax law, they set-up how HMRC operate and they are the ones who let these corporates away with it. MPs are the only ones to blame.
Now, what's the solution? Simple. Change the tax system and tax gross income. Maybe have a variable rate based on size of said income, but either way; tax the gross taken in this country. It's simple to administer; stops off-shoring of profits and hiding of profits in tax havens.
This, clearly, still has problems but it has less problems than the current regime.
Never happen though. The advisers to the government are all employees (or ex-employees) of the companies that enable the...err...tax efficiencies.
Can't happen, it would destroy businesses...
Just think, your costs are 900k, your business makes 1 million, your tax liability at 20% is 200k, your profit was only 100k, time for bankruptcy!
seriously, I have ran a small business and my profit was about 10%, if I was taxed on turnover, then bye bye business
Who said anything about keeping the tax rate at 20%? As the gross is now being taxed, the rate would be much lower and the amount to the Exchequer the same. In you example that would be a tax rate of only 2% on the gross. Actually, the amount would be even lower again because avoidance is (hopefully) so much harder.
The current system is not viable. I get skinned 20% on (just about) everything I buy, I get taxed (just about) 40% on my gross income and mega-corps pay...nada, the super-rich pay...nada (with one or two notable exceptions).
Ran out of time to add this:
RMS has ideas on using a variable rate to reduce "too big to fail". Not sure how viable that is, to my mind it would open loopholes that could be exploited.
It wouldn't destroy business. First the example is pretty extreme, assuming however you are correct then you put your price up, or costs down.
If the price is up then of course you are less competitive, but then all your competitors are now paying tax at the same rate that you are, so either they to will have to put their costs up, in which case nothing much changes, or they are more efficient and are going to kill you eventually anyway.
If you chose to go for the costs down option then you will become more competitive and will win more market share - bolstering profit and growing.
Of course, my version of the tax stuff in the UK for companies specifically limits the tax to transactions in the UK - so you would have a 3rd option - export, under my scheme the export would not attract UK tax... much better all round.
Please explain why it is so stupid. My income tax is a tax on turnover, because clearly I am a making a vast profit from going to work.... well, perhaps I would if I could have a house near work, could cycle, wear what ever I wanted, didn't need to have spent time and money on training, hadn't got to eat, drink and all those other little thing so I don't peg out on the job...
It is NOT stupid to tax companies on their turnover (indeed, VAT could easily be swapped to do just that if we got rid of the stupid claim back bits),
A billion dollar company IS making massive profits, or it is on the way out anyway. It doesn't matter which is true a tax on turnover is still good (taking a proper 'share' of the profit or hastening the company on its way to restructure or fix its fundamental problems). Taxing profit for companies has clearly failed... the profits are quickly (and in the case of company law actually properly) removed to locations where they aren't taxed, and then distributed to the share holders - most of whom are stinking rich already.
Sorry Dave but it's a good job you are a wage slave rather than an entrepreneur. You just have no clue
a)You get to earn about £10k tax-free. That could cover your expenses to work like travel and clothes, meaning you are then taxed on 'profit'.
b)Equating a job and a company is asinine in the first place.
c)"A billion dollar company IS making massive profits, or it is on the way out anyway." Balls it is. A $1bn company making profits of $100m is not any more profitable than a £1m company making profits of £100k.
d)Some companies run on a margin of say 10% - they manufacture and sell on so they have vast costs and thus very high turnover without that big profits. Others have margins of 70% or more if they are a service company. If you tax on turnover, you kill any company which actually makes anything.
Most of these comments state that she pays NI on her miminum wage but then pays no tax. Well that is not how the system works legally....let me clarify:
How the system works legally:
She pays herself enough to be below the tax threshold so currently around £10K but will still pay NI on this.
Her Limited Company has to pay corporation tax, that's 20% of the company earnings.
She is also liable for personal tax on all earnings that fall over the higher rate earnings bracket which is about £45K so she would be paying 40% tax on £55K and if she falls into the 50% bracket then she pays even more.
There are strict rules to adhere to in order to benefit from the reductions in tax paid but they are government incentives for people who start and run their own companies, if the rules are adhered to then you can bitch and whine all you like but she is perfectly entitled to her earnings. Saying she doesn't pay tax is just nonsensical so please get your facts straight before you witter on about how unfair the world is. Starting your own company takes balls and a real drive, I know this because I have done just that and with a young family dependent on me. Anyone can do it, whether you succeed or not is usually down to the individual's capabilities.
Takes balls and drive? Not really, 25 quid and a visit to a website. Making the company successful takes a lot of luck, some serious amount of money behind you to pay the bills you incur while the parasite customers don't pay for the services/goods you have provided them, and of course the money you need to live on while the company gets to the point it supports you - I've started several companies, most on the scrap heap due to unpaid bills, the rest on the scrap heap because they couldn't sustain me, myself and I.
The most annoying thing is that yes, for a small 1 man band company the risk and reward is generally (not always but generally) down to the person that started it. Sometimes they have a helping hand - large amounts of cash, rich families etc. (think Bill Gates and I believe Richard Branson - though I am not certain about the wealth of his family). But for people like Schmidt it is more to do with going to the right school and being chums with the right people.. Its not like his previous company was a roaring success (its dead Jim), yet he still got appointed to this company and has made a not so small fortune on the back of work people had done before he joined. I'd love to see just how much of the current profit/turnover was down to any decisions he has made since he joined - I would guess either none, or a very small amount.
"It's called capitalism," he stated baldly. "We are proudly capitalistic. I'm not confused about this."
And that's fair enough. Part of capitalism is that there should be competition for the customers to choose from. Which why I switched to Bing months ago and I'm still using it.
Yes, it's not as good, but I'm proudly exercising my capitalistic right to give another firm my business. I hope Schmidt isn't confused about that either.
Corporations do not exist for the purpose of generating tax revenue.
When a corporation obeys the tax laws and just so happens not to pay much only means the government was successful in using tax law to regulate activities. One is taxed in ways other than cash.
Even when a corporation pays huge taxes, the corporation is not really taxed. Taxes are just a cost of doing business and are passed on to consumers. Who then pay VAT and sales taxes on top of the taxes the corporation paid and passed through.
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Google are not doing anything wrong........ in fact they are only doing what a couple of million sole traders and self empoyed people do.
Most legal get away with paying under £5 per week national insurance by paying them selves very little and taking the rest out of their companies in dividends. (which only attracts 25% tax compared to the potential 31 and 42% tax band most of us pay)
I wish my NI bill was only £5 per week.......... and i would do the same If I could... :o)
Oh my national insurance is going up (Contact out allowances are changing) ....... to fund better pension for Self employed and Part time workers....that is not fair...... :o(
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