back to article Clap Google, Amazon in irons to end tax shenanigans - MPs

New laws and prosecutions could be necessary to force Amazon, Google and other multinationals pay a fairer amount of corporation tax in the UK, according to MPs. The Public Accounts Select Committee today published its report after holding hearings with Amazon, Google and Starbucks on the tiny amount of tax they pay in Blighty …

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  1. Crisp
    Go

    Taxing rich companies that can afford it?

    What an awesome idea!

    1. Anonymous Coward
      Anonymous Coward

      Re: Taxing rich companies that can afford it?

      Personally I'd deny them access to the vital infrastructure which they aren't contributing to. Roads, rail, electricity grid, gas supplies and so on.

      Yes, some of this is paid for by bills, but not all of it.

      1. Destroy All Monsters Silver badge
        FAIL

        But what about muh socialism?

        How are they not "contributing" to it?

        They pay the people who pay income tax.

        They buy stuff on which there is VAT.

        They buy petrol on which there is excise tax.

        Pretty sure their financial transactions are taxed, too.

        "but not all of it"

        Ok mister, you provide an itemised bill then. Then find out whether it is in any way related to the numbers found in the "corporation tax"

        1. Anonymous Coward
          FAIL

          Re: But what about muh socialism?

          "They buy stuff on which there is VAT"

          No they don't, they are business.

          "They buy petrol on which there is excise tax"

          And claim it back as an expense (so a loss)

          "Pretty sure their financial transactions are taxed, too."

          Yes at other county's rates

        2. Neil Charles
          FAIL

          Re: But what about muh socialism?

          Can I try that excuse?

          "I didn't pay any income tax, but I contribute to the economy by paying VAT your honour."

          1. nematoad
            Unhappy

            Re: But what about muh socialism?

            "I didn't pay any income tax, but I contribute to the economy by paying VAT your honour."

            Indeed you do unless you are a company or registered for VAT.

            Unfortunately there seems to be a mind-set that the only "tax" that counts is income tax. Just listen to the politicians spout off about "tax payers" being the only ones contributing to the national coffers, and that those in receipt of benefits are "scroungers, cheats and thieves" as they do not pay any "tax".

            Of course they do unless they have devised a way of operating in a totally non-monetery system and never, ever buy anything from anyone. The only group of people that comes to mind who get near this are members of a religious order such as monks or nuns and I bet you that the monastery, convent or religious organisation does pay tax.

            What the politicians and right wing papers conveniently forget is that VAT, road tax, excise duty, petrol duty and so on ARE taxes and that everyone pays one or more of these.

            So, pay no "tax" if you are unemployed and you are a drag on society and should be pursued relentlessly, but if you are a big corporation and avoid or evade tax you are just fulfilling your duty to your shareholders and that's OK.

            Talk about double standards!

            1. Anonymous Coward
              Thumb Down

              Re: But what about muh socialism?

              @nematoad

              "Indeed you do unless you are a company or registered for VAT."

              Are you sure about that? Company can deduct the VAT _they paid_ from their obligation created but their sales. So how it's not paying VAT? Just the fact you can deduct VAT you paid on some gas does not make it disappear as you need to sell your stuff first to be able to deduct it.

        3. Lee Dowling Silver badge

          Re: But what about muh socialism?

          The companies normal technique is to say, by shifting tax obligations around, that they don't make any profit in the UK whatsoever. They do this by being "forced" to pay a 100%-of-their-profits payment to the people who own their franchise. Which is them, in a "fake" company, off-shore, that does nothing but is only where those profits are taxed by miniscule amounts and never get back to the UK.

          There's more to it than that, but basically the profits are all sent overseas and, with some fancy accounting, companies that take billions in profit are actually recorded on the forms in the UK as never having made any.

          This affects not only things like corporation tax (which is then effectively zero), but also other taxes. They are basically paying themselves for the rights to use their own names and in doing so shifting all profit to off-shore companies that, under UK law, would be required to pay a lot more tax. Even if they were to have just a UK subsidiary that paid that tax properly, and then profits shipped off-shore, the taxation from the UK would be "normal", "moral", and nobody would complain. And, in fact, that's what most of their competitors (e.g. Costa Coffee) do and STILL manage to make a profit and hold themselves against Starbucks in terms of competition.

          And literally ANY idiot with a clever lawyer and accountant can set up any number of "empty" companies in tax-free countries and come up with the same arrangement to pay almost zero tax in the UK or elsewhere.

          Yes, they pay their employees income tax, for those vital employees that are based in the UK and have to be. But they also pay some other country's tax regime a lot less to house their accounting "fronts" which should also be in the UK (like their competitors do). The VAT is a no-win, you only pay VAT on things that you add value to (so buying in your coffee from your external franchiser at the "sale price" and then selling it direct gives you a lot of ways to NOT add value to it, and thus eliminates a lot of VAT that should be paid in the UK - this is more tricky though, because of the way VAT works, and a lot less companies can scam this side of things successfully - Amazon basically operated from Jersey for years because it basically exempted them from VAT by the same tricks but we cut that loophole just recently).

          A company should NOT be able to make more money by playing tricks with international fake firms, shipping goods ten times the distance necessary to deliver a book to you, or anything else along those lines and then twisting the way / location they pay tax. That is a complete failure of a taxation system and that's what they will be rectifying.

          Do you know, until recently, you could avoid a lot of tax by saying you were employed by an umbrella company that did nothing but "employ" people and hire them out to others, instead of being self-employed and doing the same jobs? That's a failure of the taxation system and that's been rectified just recently. The biggest players of that one? NHS hospitals and school supply agencies. You're still paying all legally required tax and still paying income tax, but the way you do it means it becomes "cheaper" by avoiding certain taxes and tax requirements.

          Nobody is saying they pay zero tax. What we're saying is that (commercially) they are the equivalent of the millionaire next door who, because he can employ an accountant, doesn't pay one-half of what his out-of-work, on-benefits next-door-neighbour pays in tax when both fill out all their forms correctly (there's a difference between correctly and not-morally-repugnant). And that's not an exaggeration. And that's what we're trying to fix.

          Imagine that you didn't have to pay tax on fuel. But only if you were part of a large corporation. The next day, a million people would form a company that collectively did nothing but buy fuel for its shareholders. It would pay no tax, and a million people would have avoided a tax that everyone else had to pay. Is that legally allowed? In this case, yes. Is that fair? No. Is it a good taxation scheme? No. Even if it's ONLY the tax on petrol, or income tax, or excise, or whatever - everyone else is playing ball and paying that tax. These companies are not, by doing something where the ONLY purpose of that process is to avoid UK tax.

          Just because they paid a few million in tax, it doesn't mean they SHOULDN'T be paying the few billion that their competitors are. Because if you DON'T fix that, we all end up not paying enough tax, which (if you don't reclaim it from those companies) is recouped by raising things like income tax and excise duties, making you and I pay more, or suffer a loss of public services. And if we don't fix that, and all companies in the UK do the same thing, we end up with no "real" businesses operating inside the UK and we're literally just financing other countries indirectly at great personal cost to ourselves.

          Nobody is saying they did anything illegal, or paid zero tax. What we're saying is that they provably played accounting games to pay MUCH, MUCH less tax than they would do without them playing those games. Tax that pays for our public services, and provides them with electricity and roads and premises to do business in. The fix is to not only make THEM itemise the bill for the taxman, but to charge a financial transaction tax on such games and anything similar that crops up to replace them.

          Otherwise, you might as well just throw the whole taxation system out of the window. The point of a taxation system is to CAPTURE people who are making money and take a fair percentage of it. If that percentage isn't sufficient, or the people making money are difficult to capture, laws are introduced to MAKE it sufficient and MAKE them let themselves known.

          1. El_Fev
            Thumb Up

            Re: But what about muh socialism?

            How about this, if they don't even want to pay a minimum amount of tax in this country without having the legions of hell set on them, then how about they take a flying feck out of this country , and will see how our home grown companies who aren't losing out on coast basis because of foreign non tax paying scum being in the market, do!

          2. Arctic fox
            Thumb Up

            @Lee Dowling Re: "But what about muh socialism?"

            Erudite old chap, every word pure gold.

          3. Anonymous Coward
            Thumb Down

            Re: But what about muh socialism?

            @Lee Dowling

            "Otherwise, you might as well just throw the whole taxation system out of the window. "

            The first sentence here which makes any sense.

            "The point of a taxation system is to CAPTURE people who are making money and take a fair percentage of it. If that percentage isn't sufficient, or the people making money are difficult to capture, laws are introduced to MAKE it sufficient and MAKE them let themselves known."

            I call BS here. If that would be true we would have a simple tax system easy to follow and hard to abuse. TAX system has a lot of other priorities before you even think about a revenue. The most important role of it is to use it as a political tool with some special allowances or deductions to win some groups which are needed at the moment. That's the reason the whole TAX law is so complicated and it's getting even more complicated when someone is trying to "fix" issues like this (which is political as well).

            How hard would it be to just use VAT as the only tax in existence? Easy to collect, easy to understand, hard to avoid. The more you buy the more you pay so rich pays more then poor by definition. But then how would politicians be able to confuse you with it?

        4. El_Fev
          Thumb Down

          Re: But what about muh socialism?

          OK so what your saying is that , if I pay a paper boy £10 a week, I can dodge paying my tax because they pay theirs? Christ there are no words to describe your level of stupidity!!

          1. Naughtyhorse
            Joke

            Christ there are no words to describe your level of stupidity!!

            I can think of a few!

        5. Naughtyhorse
          Flame

          Re: But what about muh socialism?

          quit with this stoopid fucking argument already

          amazons staff pay PAYE NOT amazon.

          VAT is reclaimable by all but the end user (kinda showing your ingnorance here shill)

          Amazon do not operate a delivery fleet, ergo road fund licences and fuel tax are not paid by them either.

          not sure what a financial transaction tax is..

          you might mean stamp duty - paid on building purchases (wanna bet all them tin sheds amazon use are leased)

          or you might mean SRDT paid on share purchases, for which over 70% of transactions are exempt, and the rate is 0.5%

          so no

          AMAZON DONT PAY ANY FUCKING TAX YOU MORON!

          1. Anonymous Coward
            FAIL

            Re: But what about muh socialism? @Naughtyhorse

            Now, I'm not wanting to defend Amazon, but they will pay employer's national insurance contributions, a payroll tax that averages about 13% of the total salary bill. They'll also pay rates on their offices and distribution facilities. If you've been paying attention you'll already have read on the Reg that they paid £74m of taxes last year. Maybe your threshold of materiality is rather different to mine, but I call £74m a lot of money. In passing I will note that Amazon will also have collected some £600m annually in VAT for the British government, for which (like all other businesses) they have to swallow the collection and audit costs for.

            I accept they are avoiding corporation tax, but what's that worth? Taking £3.35bn of UK sales, apply their group EBIT margin of 4%, and that's a nominal £134m of taxable profit. A typical corporate tax rate ought to be a couple of percent below the "main rate" (currently 24%) by virtue of capital allowances. Say 22% of the £134m, or £30m. Now, that's a whole lot of tax to avoid, but your cretinous claim that Amazon don't pay any tax is rubbish - they actually pay 72% of the taxes that you would deem that they "ought" to pay.

            So, capslock on for the hard of thinking:

            AMAZON PAY A SHED LOAD OF TAX, JUST NOT QUITE AS MUCH AS YOU EVIDENTLY WANT, HAVING BEEN WHIPPED UP INTO A FRENZY BY A BUNCH OF MP'S WHO CREATED THE LAW AND SIGNED THE TREATIES THAT BROUGHT THIS TO PASS.

            1. Jolyon Smith
              Mushroom

              Re: But what about muh socialism? @Naughtyhorse

              In constructing your argument for a fair amount of taxation on the actual profits, using the stated EBIT margin of the company, you seem to be wilfully ignoring the fact that it's only because of the sharp practices involved in re-structuring their income that results in the low EBIT margin in the first place !!

              A UK tax payer who asks his employer to pay his salary as a service fee through a service company could then re-structure their drawings from that income in such a way that they avoid higher rate tax. In fact, up until the end of the 20th century, this was very common.

              It was also entirely legal. I mention this for all those complaining that Amazon et al aren't doing anything illegal and using this is the argument for leaving them alone.

              Because once HMRC realised that the taxation arrangements designed to ensure fairness for people genuinely engaged as service providers, was also being used by what amounted to "employees" as a way for both companies and those employees to reduce their tax liabilities, they CHANGED the law. What we got was IR35, a complete balls up that tried to go too far and thus ended up more or less toothless.

              But the principle was sound.... people should pay their fair share.

              The trick is to define "fair" in a way that is both fair and enforceable. Beyond that you have to expect that people - whether employees or corporate financial controllers - will do whatever they legally can in their own best interests.

              1. Anonymous Coward
                FAIL

                Re: But what about muh socialism? @Jolyon Smith

                "In constructing your argument for a fair amount of taxation on the actual profits, using the stated EBIT margin of the company, you seem to be wilfully ignoring the fact that it's only because of the sharp practices involved in re-structuring their income that results in the low EBIT margin in the first place !!

                You are wrong. The tax a company pays is not based on the reported accounts of a company, it is derived from the computation returned to the HMRC, and that is based upon the thousands of pages of tax law, not GAAP (which is the basis of the audited report and published accounts).

                The EBIT number is generally far more accurate measure of a company's underlying operating profitability than "the comp". I used the EBIT number as a credible proxy for what their taxable profits ought to be, and that works because the GAAP profit feeds into their cash flow statement where you can trace it through to dividends paid, which is where the money starts to become real for anybody outside the company.

                So your starting presumption that GAAP accounts are fiddled to get the tax down is nonsense.

          2. GotThumbs
            Boffin

            Re: But what about muh socialism?

            I think Amazon should say....Screw em and don't do business in those countries at all.

            Today's liberal politicians and most of society's dependent scum, sucking on the government tit, will ALWAYS put forth the idea of putting the responsibility on others. Especially companies who lack a single face and thus are not human. They overlook the fact that smart investors do not invest in losing companies (that's a position reserved only for the US Obama Government). Companies exist not to support the needy. The exist to provide a product or service. It's the local citizens who should be responsible for caring for their needy. Employees of those companies work as long as the company can remain an on-going entity and they pay local taxes and keep local businesses open as long as their employed. If you don't think Amazon impacts your local community, think again. Local delivery trucks, fuel or even a driver having lunch in your local eatery.

            Here's an analogy: A blood sucking leach attaches its self to a host. The leach is only one and the host is able to replace the blood consumed by the leach and thus both continue to live in relative harmony. If more leaches attach to and start sucking more blood from the host than can be replaced, then the host will die and the leaches will need to find another host or die themselves. Guess who the leaches are? Those sucking on the government tit all their life and their children's life. It's time to expect more for each nations citizens.

            Best wishes,

            1. David Hicks
              FAIL

              Re: But what about muh socialism?

              @GotThumbs - "I think Amazon should say....Screw em and don't do business in those countries at all."

              Awesome, because it would be far better for them just to up and leave rather than pay a percentage tax on their profits.

              Do you understand what a PERCENTAGE tax on PROFITS is? Idiot.

            2. Havin_it
              Mushroom

              @GotThumbs Re: But what about muh socialism?

              "It's the local citizens who should be responsible for caring for their needy."

              Common Sense at last! Right everyone, we can pack up and go home, GotThumbs's cracked it! David Cameron can get his wallet out to support the poor of Chipping Norton (some of the poor blighters only have one land rover, I hear) and the better-off denizens of Sighthill (those who treat themselves to plywood over their windows instead of chipboard) can pay to hose down the folk sleeping in their wheelie-bins and give them a bowl of soup. Sorted!

              Yes, these corps sink money into local economies, but they funnel a fuck of a lot more back out; orders of magnitude more. And the fact that you can refer to "smart investors", then proceed to call any other group scum, tells me as much as I care to about where you're coming from (as if the Obama quip weren't enough).

        6. Anonymous Coward
          Anonymous Coward

          Re: But what about muh socialism?

          How are they not "contributing" to it? :- They pay the people who pay income tax.

          They buy stuff on which there is VAT. :- They buy petrol on which there is excise tax.

          ==

          You are frigging idiot!

          So where does it stop then? I earn money from work, I buy stuff in TESCO and just 'cos the shop workers pay tax, I don't have to? TESCO workers decide that they don't want to pay tax 'cos they bought some stuff from HOMEBASE, where their workers pay the tax.

          They are a company, no company pays VAT and it they do they claim it back ASAP! Right from one man contract service operations like IT workers right up the chain to multi-billion pound firms. It's one of the first things you learn when you set up a limited company, what stuff can I claim the VAT back from! Lost count the number of mates I've got cheap PC parts from 'cos they ran limited companies and claimed back the VAT on the PC parts they bought saying they were for "business use"!

          1. Jolyon Smith
            Mushroom

            Re: But what about muh socialism?

            Those cheap parts you bought from your mates ... if HMRC found out then a tax evasion charge would be laid, but only once the amounts had totted up to an amount worth pursuing.

            The little guy get's away with it because he's too small for HMRC to be bothered with (the cost of recovery will far exceed the amounts recovered), and the big guys get away with it because they can deploy all sorts of defences to increase the costs (and reduce the chances) of recovery to similarly prohibitive levels, from the HMRC point of view.

            As usual, it's the guys in the middle that get skewered like stuck pigs in the whole situation. Big enough for the HMRC to be interested, not big enough for the HMRC to be scared.

        7. kb
          WTF?

          Re: But what about muh socialism?

          Look up "double dutch" and "Irish whip" tax dodges and you'll see why we here in the states hate them as much as your MPs, basically they are paying jack and squat on their profits (FYI Apple set records for profits while paying less than 2% in taxes) by simply bouncing the money between tax havens and giving itself high interest loans which its pays...itself.

          For those that say we shouldn't tax corps then fine, allow regular folks to do the same tricks and see how quickly the government debt becomes unsustainable. As always these tax dodgers have to be made up somehow and the way is usually higher regressive taxes on the poorest workers. Meanwhile these corp CEOs live like Gods and enjoy all the benefits without paying a bit of the cost. look up what the fortune 50 paid in taxes last year but don't do it right after you have eaten, as its liable to make you ill.

      2. ChrisInAStrangeLand
        FAIL

        Re: Taxing rich companies that can afford it?

        "Personally I'd deny them access to the vital infrastructure which they aren't contributing to. Roads, rail, electricity grid, gas supplies and so on."

        They pay the national grid connection charge at their datacenters. Data also does not use road, rail, gas supplies or "so ons".

    2. Shagbag

      This sort of shit pisses me off.

      "Margaret Hodge, Labour MP and head of the panel, said it was clear that the companies were using complex corporate structures and exploiting the current tax law setup to move their profits out of the country."

      So they weren't breaking any laws.

      "HMRC should be challenging this but its response so far to these big businesses and their aggressive tax planning has lacked determination and looks way too lenient. Policing the tax system must be at the heart of what HMRC does"

      And we're going to cut your HMRC budget so that you can't employ anyone to do this.

      "We suspect that all these arrangements are devices to remove profits from the UK to these areas with lower tax"

      Oh FFS. HELLO! ANYONE IN THERE? It's called "Transfer Pricing" and everyone who works in international tax has known about it for decades - even pre 1970s. WAKE UP YOU DOPEY POLITICIANS AND SMELL THE COFFEE!

      "The MPs said HMRC needed a "change of mindset" on big multinationals and had to prosecute the ones that weren't paying the tax due in the UK."

      That's the realy cowardice, right there. Blame the HMRC when it's been successive Governments who are the villains. Repeatedly failing to listen to the HMRC about their need for adequate resources.

      Only when the mass media starts pointing the finger at the politicians will anything ever get done about this. Trying to deflect blame to the HMRC and the Multi-national Taxpayer like this means NOTHING will get done. It's complete rhetoric and venting of anger. That is all. Nothing will come of this. Tax avoidance will continue to occur. There is nothing to see here. Move on.

      1. Chris Miller

        @Shagbag

        Something that may piss you off even further (if you weren't already aware). The family of the very same Margaret Hodge own a company called Stemcor that has a turnover in the billions yet (perfectly legitimately) pays almost no UK tax. She has steadfastly refused calls for it to be brought in front of her committee to explain why this is the case.

        1. David Hicks

          @Chris Miller RE: Stemcor

          This seems to be a red herring as Stemcor is UK based and reports a low level of profitability - 1% - in the last year on record. A turnover of billions doesn't mean a profit in the billions.

          I'm not saying it shouldn't be looked into, it absolutely should and not least because a politician is involved, but this doesn't seem to me to be a game of shipping profits around to the most favourable place as is being played by amazon et al.

          1. Chris Miller

            Re: @Chris Miller RE: Stemcor

            "A turnover of billions doesn't mean a profit in the billions." Indeed not. Except when your company name is Starbucks, Google or Amazon, apparently (at least, according to the grandstanding Ms Hodge). So there's only two possibilities: either she's too stupid to realise what she's saying; or she understands perfectly well, but is the biggest hypocrite in Parliament (where she's up against pretty strong competition).

            1. David Hicks
              Stop

              Re: @Chris Miller RE: Stemcor

              @Chris Miller

              There's a third option - it can be shown that Amazon, Google and Starbucks are profitable in the UK but move profits abroad via various tax-avoiding means (this *is* the case), whereas Stemcor is genuinely having a hard time of it (I have no idea if that's the case).

              I have no love for politicians of any stripe, but these allegations seem MIGHTY convenient to me. Totally agree it should be looked into, personally I think everything the politicos are into ought to be investigated, but I'm not convinced this is the same thing that the big multinationals are up to.

          2. Anomalous Cowturd
            WTF?

            @ David Hicks RE: Stemcor

            Perhaps a more relevant question would be "how does a poorly paid MP manage to acquire £1,800,000 worth of shares in said company"???

            Seems the obvious icon.

      2. Field Marshal Von Krakenfart
        Stop

        Re: This sort of shit pisses me off.

        Oh FFS. HELLO! ANYONE IN THERE? It's called "Transfer Pricing" and everyone who works in international tax has known about it for decades - even pre 1970s. WAKE UP YOU DOPEY POLITICIANS AND SMELL THE COFFEE!

        Oh for FFS, WAKE UP YOU DOPEY VOTERS SMELL THE COFFEE. politicians don't give a flying fuck about this sort of stuff, form a committee, make some press releases, go through the motions of giving the impression of doing something while actually doing nothing.

        politicians could end this quite easily by changing the laws on transfer pricing, so why don't they?????? I think the phrase I may be looking for is "follow the money".

        1. Field Marshal Von Krakenfart
          Trollface

          Re: This sort of shit pisses me off.

          While we are at it, can the politicians make Starbucks sell coffee instead of flavoured milk.

    3. P. Lee
      Holmes

      Re: Taxing rich companies that can afford it?

      It is and we do it.

      It just turns out that Amazon UK and Google UK aren't rich companies.

      Probably the best route is to disallow royalty payments and management fees to be considered a cost by any corporation with a foreign controlling stake.

      Is that a winged Vietnamese pot-belly?

  2. Pete 2 Silver badge

    Where do the politicos think this "extra" tax will come from?

    In the end, any higher cost of business will be passed on to the customers (hint: in the country where costs have risen).

    So ultimately any additional tax that these companies volunteer, for PR reasons, will simply be passed on to the consumer. What will happen then is the fiscal equivalent of a rising tide lifts all boats". Since these are the DOMINANT players in their market segment, when they increase their prices all the other retailers will follow suit. So not only will a Starbucks coffee go up in price, since they set the benchmark, but every other outfit will follow. Add in the chance of an opportunistic (non-tax related) price rise hidden in there too, and all that's happened is that consumers will be paying extra for these companies to pass on a portion of the price hike to the government.

    Net result: we all pay a little more tax. The "good" companies get to increase their prices/profits and inflation eases up a notch. Here come the unintended consequences.

    1. Destroy All Monsters Silver badge
      Holmes

      Re: Where do the politicos think this "extra" tax will come from?

      > So not only will a Starbucks coffee go up in price

      Possibly. But on the other hand:

      “The idea that the increased cost will be passed on to the consumer by the employer is an illustration of perhaps the single most widespread fallacy on taxation: that businessmen can simply shift their higher costs forward onto the consumers in the form of higher prices. All the economic theory expounded in this book [Rothbard's "Power and Market"] shows the error of this doctrine. For the price of a given product is set by the demand schedules of the consumers. There is nothing in higher costs or higher taxes which, per se, increases these sched­ules; hence, any change in selling prices, whether higher or lower, will decrease the revenues of the business involved. For each business, on the market, tends to be, at all times, at its “maximum profit point” in relation to the consumers. Prices are already at their point of maximum return for the business; therefore, higher taxes or other costs imposed on the firm will reduce their net incomes rather than be smoothly and easily passed on to con­sumers. We thus arrive at this significant conclusion: no tax (not just an income tax) can ever be shifted forward."

      One _could_ use this argument to argue for "same tax level for all" so that local sellers have the same chance against the lawyer-rich multinationals. The morality now hinges on whether the "same tax" should be high or low.

      1. Atonnis
        Stop

        Re: Where do the politicos think this "extra" tax will come from?

        Hold on just one damn sec...

        So because someone else said that no tax can ever be shifted forward and it's quoted we have to take it as red?

        So....when petrol prices went up, along with the associated tax levels, and companies all around shoved their prices up bemoaning the extra costs involved, and then petrol prices went down and companies all kept their prices at the same point or raised them even further...this was not a passing on of costs and then subsequently screwing the consumer?

        I don't believe it.

        Oh, and by the way - taken from the comments section of your link:

        http://stefanmikarlsson.blogspot.co.uk/2008/09/consumption-taxes-vs-production-taxes.html

        1. Anonymous Coward
          Anonymous Coward

          Re: Where do the politicos think this "extra" tax will come from?

          @Atonnis: I would assume its a move of common sense not to drop the prices back. When the price of fuel falls it is for a very limited time before it is taxed back up. Customers complain when prices go up, but dont really notice when prices fall. How many news articles talk of prices going up and how many talk of them going down? Its not news to reduce prices.

          That alone excludes outside factors on the products which can also affect pricing.

          Which companies were the good ones leading into this recession? They were the ones who made as much profit as possible to survive when the last gov shafted the country as a recession hit. The surviving banks were the ones who didnt listen to the gov and didnt make stupid purchases while relying on bad loans (forget the lack of regulation issues for this comment).

          The screwed customer has no job because the money to employ them is taxed from potential employers. If it wasnt then we wouldnt have money wasted on daft projects and it would hire those people. Tax is lost money. It is good money which could have a use but has been assigned to pocket liner. Why should people be fleeced more? Surely the expenses should be brought down?

    2. Anonymous Coward
      Anonymous Coward

      Re: Where do the politicos think this "extra" tax will come from?

      "In the end, any higher cost of business will be passed on to the customers (hint: in the country where costs have risen)."

      I very much doubt that, because for it to be true these companies would have had to have passed the savings on to you in the first pace. I think you'll find that the laughable ease of dodging certain UK taxes isn't gifted to you in any shape or form, but in fact just becomes a lower foreign tax charge for Starbucks shareholders.

      Starbucks charge what they think the local market will sustain - and so do Costa, who aren't in the same basket of big time international tax avoiders. In the case of Starbucks, despite their tax avoidance, their coffee is generally more expensive than both Costa and independants:

      http://www.londontoolkit.com/blog/investigates/coffee-shop-chains-in-london/

      Your argument that Starbcks is the dominant player isn't really relevant - businesses charge based on a combination of their own costs and what they think the local market will bear, and if they do price based on competitor pricing, then they are guilty of price fixing,even if they haven't sat in the obligatory smoke filled room. That attracts fines that make corporation tax look small beer (even for those who pay it).

    3. JimmyPage Silver badge

      @Pete 2

      *unintended* consequences ?

      1. Pete 2 Silver badge

        Re: @Pete 2

        > *unintended* consequences ?

        Yes. ISTM the government "plan" is that every company (not just Starbucks, but that's as good an example as any other) should pay HMRC more tax, but that the tax should come out of their "profits". The govt. then trousers the cash and spends it as a windfall on some schemes that weren't in their manifesto and that nobody voted for.

        What I expect to happen is that all these companies will class the extra UK tax bill as a local cost of business expense and recoup that cost through increased prices. I further expect that they will use this as an opportunity to get some good PR - as being "ethical" businesses :). I would also expect that, far from just increasing their prices by the few pennies needed to cover the cost, they'll round them up and hide a price rise in the general increase. They may even have the balls to blame the increase on rising commodity prices.

        After that, I would expect all the other businesses in the same sectors to make comparable price increases, even though their costs weren't affected. After all, if the dominant player in a market ups their prices, that's a good excuse for everyone else to do the same.

        So what we're left with is higher prices to consumers, increased tax take to the government, a little extra profit to the newly "ethical" tax-paying companies and a larger one for all the others. In due course, those prices rises will feed through to increased inflation, slightly higher interest rates and a small, probably imperceptible rise in unemployment. Those would be the unintended consequences.

        1. Jason 24

          Re: @Pete 2

          Ok, so Starbucks decide that if they have to pay this tax then they are simply going to pass the cost straight on to the customer, and whack whatever % on top of their current prices.

          Costa, who already pay all their tax and still turn a profit don't increase their prices and so are now undercutting Starbucks by whatever %

          Given Costa are already making a profit they are happy with why would then increase their prices to match Starbucks?

          Yes, in the pursuit of pure profits this may seem an easy thing to do, but they'd have to be retarded to bump the prices in line with Starbucks in this situation as it's just another way of showing themselves to be better than Starbucks, thus driving more people into their stores, leading to more profit anyway.

        2. JimmyPage Silver badge
          Black Helicopters

          Re: @Pete 2 Unintended consequences

          "So what we're left with is higher prices to consumers, increased tax take to the government, a little extra profit to the newly "ethical" tax-paying companies and a larger one for all the others. In due course, those prices rises will feed through to increased inflation, slightly higher interest rates and a small, probably imperceptible rise in unemployment. Those would be the unintended consequences."

          I say again: You believe that would be unintended ?

          In a related topic, about the HomeSec snooping laws, it's being suggested that if they were to become law then more people (plus the baddies, natch) would use VPNs and drop off the grid, as if that's some unintended consequence. I would say that is *exactly* the intended outcome. Because then we'll have the government saying "it's dreadful, bad people are doing bad things. We need MORE powers".

    4. Naughtyhorse
      Flame

      Re: Where do the politicos think this "extra" tax will come from?

      cobblers

      the 'extra' tax comes out of company profits (the ones they are trying to hide)

      because for the last 100+ years you and idiots like you have gone to great lengths to point out that THE MARKET fixes prices not THE COMPANY.

      the market price for a cup of coffee is NOT determined by starbucks, if they have to start paying UK corporation tax then they will have to suck it up and find the money, or rick having costa + world +(barisata)dog ( AFAIK tax paying) rip the guts out of them.

      and at the next shareholders AGM with starfucks reporting zillion dollar losses (genuine) the shareholders get to ask 'so hows that market dominance think working out for us these days?'

      if this is the kind or arguement we get from a 'finger on the pulse, red blooded, free market, Im alright jack - fuck you' kinda capitalist, it's no wonder the world economy is in the shitter.

      CLUE.... get one!

  3. Colin Millar
    Big Brother

    Look over there - someone else is nicking all the money!!!!

    So these MPs - would they be the same MPs that keep approving the tax code in the UK? That lawyers and accountants wet dream of complex and opaque regulations?

    At first glance these rules appear to have been written specifically to permit people and corporations with lots of lawyers and accountants to bypass the need to pay taxes but that surely could not be the case.

    I am sure that these MPs have a perfectly reasonable explanation as to why they keep on passing these ridiculously flawed regulations and that it has nothing to do with directorships.

    So - go on Margeret Hodge et al - let's hear it then.

    1. Anonymous Coward
      Anonymous Coward

      Re: Look over there - someone else is nicking all the money!!!!

      "So - go on Margeret Hodge et al - let's hear it then."

      This'll be what you're looking for:

      http://www.telegraph.co.uk/finance/businesslatestnews/9668396/Margaret-Hodges-family-company-pays-just-0.01pc-tax-on-2.1bn-of-business-generated-in-the-UK.html

      1. Colin Millar

        Re: Look over there - someone else is nicking all the money!!!!

        Wow - the timing couldn't be better.

        I bet she's starting to warm towards state control of the press a measured degree of press regulation.

      2. fajensen
        Coat

        Re: Look over there - someone else is nicking all the money!!!!

        Exactly! The politicians *deliberately*, *over many years*, crafted tax law specifically to allow the people they Represent* to escape any of the inconveniences suffered by the people they Manage*!

        1)

        Represent: Politicians Themselves, Corporate Interests, Paying Contributors and Random Cronies.

        2)

        Manage: Everyone Else, Especially the Electorate who, even though they are dumber than piss, just eventually might realize that they are being royally screwed over and decide to rock the boat.

  4. TRT Silver badge

    I wonder if some economist...

    out there would care to comment on how this affects the balance of payments, about which I've seen next to nothing in the press for the last 10-15 years, but which dominated the headlines during the 60s, 70s and 80s?

    1. Anonymous Coward
      Anonymous Coward

      Re: I wonder if some economist...

      Normally referred to these days as the trade deficit. Which more accurately reflects the situation, since we long ago abandoned any attempt at acheiving a balance.

      Put very simply, we now import goods and services costing about £25bn a year more than our exports. In that context, the tax dodging merely inflates the deficit by a trivial amount because they are classing UK economic activity as an import, in order to get the beneficial tax treatment.

      The real impact of this is the impact on the public sector's budget deficit, since the overall scale of tax ourism is around £5bn a year, and that's money the government then has to borrow.

      But before everybody gets too heavy on the companies involved, they should consider that the UK is the fifth largest trading nation in the world, and we benefit from taxing repatriated profits for major global corporations who are domiciled here. Whilst it does seem reasonable to require some of the more enthusiastic tax avoiders to pay up, MP's and the public should be very careful what they wish for, particularly given that they constructed the current mess.

  5. ratfox
    FAIL

    They seem to have finally realized

    That under the current system, what these companies do is perfectly legal, and that they must change the law if they want things to change.

    Of course, they would not go out and say it that way. They will claim that "companies do not report their tax practices transparently", when in fact those tax practices are completely transparent, it is just that they do not approve of these practices. They will even accuse the HMRC of not doing their job of "policing the tax system", when in fact the HMRC can only apply the laws that have been given to them.

    However, I assume that the law was written the way it is for a reason, and that this reason will crop up when they attempt to rewrite the law to make it impossible to do what the companies are currently doing…

  6. Callam McMillan

    Compliant with the law?

    Whenever I read stories like this, where some politician is talking about what is morally right blah blah blah, I instantly know they don't have a leg to stand on and they're just grandstanding to make themselves look good in popular opinion.

    The facts of the matter are that it is not the responsibility of a company or individual to structure their affairs for the benefit of the taxman, nor is there any imperative, either legal or moral to pay more than you are required to do so. As such, if a company can structure their affairs in such a way as to pay no tax, then good on them.

    Also, what we're talking about is corporation tax on profits. This doesn't take into account the VAT they have to pay on the goods they sell, nor does it take into account the Income Tax and NI (Both Employers and Employees) that they have to pay for every member of staff they hire.

    Finally, and this is a personal thought. If I go to Starbucks and give them my money, I get a cup of something that resembles coffee (kind of). If I go to Google and give them my money, I get web services. If I go to Amazon and give them my money, I get just about any item I need. If I give the government my money - sorry, when the government helps itself to my money, I get sweet f-all because they've pissed it up the wall on pointless crap. On that basis I think I'll only use companies which give the government the middle finger!

    1. TheOtherHobbes

      Re: Compliant with the law?

      Actually you get health care, roads, public transport funding (of a sort), public education, defence, a working judiciary (of a sort), arts funding, libraries, technology R&D investment, aerospace investment, and one or two other things.

      It's certainly true that government is corrupt and not very good at IT projects.

      But 'governments only waste money, unlike private corporations' is one of the biggest outright lies there is.

      Private corporations mostly give money to upper management and shareholders.

      Upper management and shareholders spend it on 'luxury' tat, like shiny watches that can't keep time and two-grand handbags.

      The smarter ones spend it on property, which is why a crappy one-bed in an arse-end-of-nowhere part of London costs more than a quarter of a million now, or around four or five times median income.

      So if upper management and shareholders had less money, that would hardly destroy the UK economy.

      As for VAT - duh. Maybe you should learn how VAT actually works before claiming 'they have to pay VAT on the goods they sell.'

      And if Starbucks put up coffee prices for their customers - well, that would be a shame, wouldn't it?

      The rest of us will be down the old coffee shop having real coffee, and probably a spot of lunch too.

      1. Callam McMillan

        Re: Compliant with the law?

        You've just proved my point. "Upper management and shareholders spend it on 'luxury' tat, like shiny watches that can't keep time and two-grand handbags." Which is a far better way to redistribute money in the national and global economy than giving it to the government who will promptly waste it on the next thing they read in the Daily Mail that they think will get them reelected.

        As for VAT. They have to charge VAT on the goods and services they sell. Where the goods or services are bought by the end user, VAT is payable to the Exchequer. If they're purchased by a (VAT registered) company, then the buyer can reclaim the VAT, but will need to charge VAT to its customers. So the likes of Starbucks and Amazon will no doubt pay significant amounts of VAT. Admittedly, Google which mainly sells to businesses, less so.

        1. Mole5000
          Thumb Down

          Re: Compliant with the law?

          They don't pay VAT, their customers do. All they do is collect the VAT for the exchequer.

          This s similar to PAYE. Companies don't pay PAYE - employees do, the companies simply collect it for the exchequer.

    2. Anonymous Coward
      Anonymous Coward

      Re: Compliant with the law?

      And a point many people forget, probably because they listen to politicians too much, is that the people of this country don't have a deficit. It is the government that has a deficit as a result of its own profligacy. I personally see no reason to help them get at my money so that they can remove their deficit. They've already helped themselves to a good slice of my pension fund, so Amazon et al. paying less tax if fine by me if it keeps the price of the goods I buy down.

      If the government wants the extra tax, they should change the laws accordingly. Judging by past performance, their chances of getting that sort of detail right are minimal, however.

  7. Scuby
    Childcatcher

    There is also a risk that some of the big players will simply shift their operations out of the UK altogether and run them entirely from a "tax friendly" location.

    I'm not agreeing with their practices, but there is a reason why they structured their books that way. Perhaps if the UK were to lower the rate of corp tax to something a little more competitive with the rest of Europe where google etc base their operations, it would be a win win? Businesses that do pay their due get a break in the current economic climate, and the big players have an incentive to simplify their tax books. I'm no economist, but doesn't that make a vague amount of sense?

    1. Anonymous Coward
      Anonymous Coward

      Good luck to them

      If starbucks manage to find a way to sell me coffee in the UK without having an operation in the UK then good luck to them - I guess if you had a really long straw it might work, but I would be worried the coffee would be cold by the time I had sucked it from Seattle.

      An argument to 'lower' corp tax, or any other tax, to become more competitive seems to me to suffer from two flaws - the race to the bottom fallacy, and the idea that nothing government does is virtuous. I would be the last to argue that governments always spend money effeciently. They do , however, generally provide the fabric of a society that makes it a nice place to live,. You know, the little luxuries like roads and health care, and old age pensions and schools, and security and public libraries and museums and some mild protection against red in tooth and claw capitalism. Not many Swedes emigrrating to Somalia despite the disparity in tax rates.

    2. NomNomNom

      "There is also a risk that some of the big players will simply shift their operations out of the UK altogether and run them entirely from a "tax friendly" location."

      Simple solution to that: make it illegal. ie ban them from trading in the UK if they do that.

      1. SkippyBing

        I have a vague feeling that is in itself illegal, certainly I can't see the WTO being happy with such a move and presumably UK companies could find themselves at the end of retaliatory action from.

    3. Naughtyhorse

      no there isnt!

      starbucks arent going th leave the UK the amount of PROFIT they make is significantly more than the tax the Should pay, they'd still be ahead of the game either way.

      DUH!

      the cluse is that the UK corporation tax rate is less than 100%

    4. Nick G
      Pint

      "There is also a risk that some of the big players will simply shift their operations out of the UK altogether and run them entirely from a "tax friendly" location."

      That old chestnut...

      It's basically not true. If Starbucks leave the country, are people going to suddenly stop buying coffee? Nope - the gap in the market will be filled by somebody else. And they'll probably pay their taxes...

      1. peter_dtm
        FAIL

        nick g. http://forums.theregister.co.uk/forum/containing/1648384

        no, the company that fills the gap will obey the law & since it is required by law to minimise costs it will pay as little tax as it (legally) can get away with

        a company's duty is to its shareholders which means it is legally required to MINIMIZE its tax payments.

  8. JimmyPage Silver badge
    WTF?

    Playing devils advocate ...

    How can you change the system ?

    If we're not careful, we're going to end up with a system where companies will be expected to pay the tax HMRC *thinks* they should pay, rather than the tax they should pay, based on a set of codified rules.

    A lot of these tax wheezes were set up by governments in which successive ministers left to take up highly paid directorships with firms who are taking advantage of said wheezes.

  9. Arachnoid

    Hmm ...... doesn't it sound rather hollow coming from Politicians who are still being caught pilfering the common tax payer via their expenses.This said its more a moral issue of company's paying something back into the economy that gives them their revenue they are as has been stated, doing nothing contrary to UK tax laws.

  10. Anonymous Coward
    Anonymous Coward

    So my big mistake in life was that when I studied I should have borrowed the money from my Cayman Island subsidiary of myself. I could then legitimately argue that a substantial proportion of any salary I earn (amazingly almost exactly an amount just larger than the tax free threshold) is due in royalty payments to my Cayman Island self, for IPR, and interest on that original loan. Of course my CI self sold the loan onto a version of me in Luxembourg -and amazingly a few jumps later I find I own my own loan. Of course as I am both feckless and lazy, its unlikely my investment will ever pay off, so I am claiming myself as a tax deduction,. I have every confidence that in a few years time I will be so successfully unsuccessful that i can retire and really move somewhere hot and sunny.

    1. NomNomNom

      As an individual HMRC would rape you. You need lobbyists or at the very least to hire former politicians.

  11. DanX
    Unhappy

    Options:

    These kind of things MIGHT work:

    1) Introduce a Tobin Tax (a very small tax charged each time money is moved. Would get some back - but the city/government or someone in the UK really didn't like this idea.

    2) Put up VAT

    3) IE lower Corporate tax rates to incourage more companies to use the UK as a place worth taking tax.

    Realistically though VAT probably can't go up much higher (23% MIGHT work...), and the tobin tax was disliked for a whole load of good reasons too. Lowering corporate rates is a race to the bottom though, because if the UK cuts, then Ireland will cut and then somewhere else will cut.

    Its a mess. It won't be sorted in a hurry.

    1. James 100

      Re: Options:

      A slightly higher VAT (maybe 22-23%) and zero corporation tax would neatly eliminate the problem. (Some people here seem to think VAT is only charged on part of the price, because of deductions: totally wrong, the amount deducted is the amount of VAT *already paid* to HMRC earlier in the supply chain, so the end result is that the whole price gets charged VAT exactly once).

      Hodge herself is one of the biggest "tax dodgers", though, through her family company Stemcor - a shame nobody had the guts to point that out to her in her stupid show-trial.

      With Google, just how much UK tax did they expect to collect from people paying nothing to visit a website hosted in Switzerland?! Do they expect the New York Times to pay HMRC too? (Yes, Google employs some people in London, mostly working on Android and other mobile software; if the UK government tried squeezing them too hard, they could just relocate those staff to Dublin, or lay them off entirely. Good luck to HMRC collecting a single penny then!)

    2. SkippyBing

      Re: Options:

      I don't get this race to the bottom argument. Apparently if we lower our corporation tax, other countries will lower theirs and we'll end up with no corporation tax in a bid to attract business.

      The odd thing is, Ireland already has a lower rate of corporation tax and I haven't noticed the rest of Europe dropping theirs in a bid to undercut them, so generally I call bollocks on that idea.

      1. Anonymous Coward
        Anonymous Coward

        Re: Options:

        "I haven't noticed the rest of Europe dropping theirs in a bid to undercut them, so generally I call bollocks on that idea"

        The French and Germans in particular have been very anti such things, and have been trying to use the european bailout money to force the Irish to raise their tax rates (they haven't got much leverage against Luxembourg mind you). Depending on where you sit that's a good thing, a bad thing, or just blackmail. Note that the French already have very low corporate taxes (albeit offset by higher personal taxes).

        But its interesting to look at the average effective rates of corporation tax, because the UK fares very badly (unless you think tax is a good thing):

        http://www.iiea.com/blogosphere/effective-eu-corporate-tax-rates

        Historically, despite high corporate taxes, the UK has been able to sustain its international trade status by virtue of the perception of fair and unbiased courts, the rule of law and ease of doing business. Parliament has been doing its best to undermine that critical ease of doing business with a never ending flood of legislation, and at a guess in trying to sort this tax issue out will make the tax code (already one of the most complex in the world) yet longer and more complex.

      2. Aitor 1

        Re: Options:

        Because other countries see this race to the bottom and refuse to participate.

        Ireland are being BAD neighbours, and shouldn't be bailed out just because of this.

    3. Velv

      Re: Options:

      "3) IE lower Corporate tax rates to incourage (sic) more companies to use the UK as a place worth taking tax."

      Interesting thought. I haven't done the research, but I suspect that a 1% cut in the UK rate to encourage companies to base here would not generate sufficient extra revenue to make up for the 1% loss from existing UK companies. (or 2%, or 3%).

      And since the EU law was specifically written to encourage this type of behaviour, our European counterparts would reduce their rate within months of the UK.

      1. Anonymous Coward
        Anonymous Coward

        Re: Options:@Velv

        "And since the EU law was specifically written to encourage this type of behaviour, our European counterparts would reduce their rate within months of the UK"

        See the link in my post above. Our effective corporate tax rate is already well above that incurred in almost every other European country, bar Germany. Germany has a booming economy and high levels of employment, so they see no need to reduce their tax rates. Most of the rest of Europe undercuts us by a long chalk, so we'd need to go some before we had a lower tax rate than (say) France.

        The varying national tax rates don't support the idea of nations competing with each other (otherwise they'd all be roughly the same), but the behaviour of companies in either moving to, or shifting profits through lower tax jurisdictions does support the idea that companies do react to this.

    4. The Specialist
      Stop

      Re: Options:

      Repeat after me:

      VAT is only paid by the end user who is not VAT registered (few exceptions apply, like embassies etc).

      So, if as you say VAT is increased, who do you think will end up paying for it?

  12. DrXym

    Their obligations?

    Google, Amazon and Starbucks have obligations to their shareholders to make as much money as they possibly can which includes keeping as much out of the tax man's hands as possible.

    If the government want them to pay more, they should close or limit the loop holes that these companies are using.

    Trying to guilt them out is just wrong. They're only doing what the law allows them to do. It's the same as the faux outcry when Jimmy Carr got caught using some offshore account.

    1. El_Fev

      Re: Their obligations?

      Jimmy carr was insulting other people about their tax arrangements when doing the same thing, so he can go do one!

    2. David Hicks
      Thumb Down

      Re: Their obligations?

      I love this argument - that everything right up to the edge of the law is somehow acceptable and 'right', completely ignoring any idea of social responsibility on the part of the people who make up these companies, who are supposed to be moral/ethical/sentient beings themselves.

      Is it right that in countries with lax environmental regulation, that companies should just dump pollutants in the rivers? Or is it right we call them out for being immoral, exploitative and unethical?

      Is it right and moral that companies use child labour and sweatshops in countries where that's allowed, in order to keep costs as low as possible so they can skim a slightly larger profit margin from selling the resulting goods to the west?

      Me, I reserve the right to call the people running those types of companies (from my examples above) immoral and probably even evil, despite the fact that they're within all applicable laws.

      By the way, I'm not trying to say the folks running Google, Amazon and Starbucks are evil, I'm just saying that the argument that companies are exempt from moral judgements over their actions is nonsense.

      1. Anonymous Coward
        Anonymous Coward

        Re: Their obligations?

        But there's a perfectly good argument to be made that keeping money out of the government's hands is the morally right thing to do.

    3. Mole5000
      FAIL

      Re: Their obligations?

      "Google, Amazon and Starbucks have obligations to their shareholders to make as much money as they possibly can which includes keeping as much out of the tax man's hands as possible."

      Could you point out where in the law of the jurisdiction where they are incorporated that is the case?

      It certainly isn't the case in the UK and it isn't (backed up by case law) the case in Delaware. You'll find it's probably not the case anywhere in America or Europe. Directors of the company have far, far more latitude to run a company than simply seeking maximal profit as even a cursory reading of company law would show.

  13. Nifty Silver badge

    Set some simple tarrifs

    Cross charging with over-inflated values to cut tax bills is as old as the hills.

    Set a maximum 'royalty' for invisible imports such as branding and 'services'. E.g 3% of turnover.

    Set a max fair value on imports of 'things' that are not sourced competitively (i.e. which drain cash to a foreign partner company).

    Biggest reason that tax law has never been reformed so far is:

    - Vested interests rather close to MPs' interests.

    - General fear of big companies and their clever lawyers

    1. Anonymous Coward
      Meh

      Re: Set some simple tarrifs

      "Set a maximum 'royalty' for invisible imports such as branding and 'services'. E.g 3% of turnover."

      Amazon's EBIT margins are only of the order of 3-5% anyway. Approximating EBIT to taxable profits, your 3% allowance would enable them to shield the majority of their profits anyway, and that's before any tax allowances on capex and the like. As the UK is a significant exporter of services, if other countries set similar limits then you would immediately cause a whole range of major British businesses to relocate elsewhere, probably more than offsetting the extra income from hounding Starbucks and Amazon.

      Regarding the "fair value" point, that's a much better one, and the subject is usually referred to as "transfer pricing". Given what the tax avoiders are doing, it may come as a surprise that manipulating your transfer pricing to avoid tax is illegal in almost all jurisdictions. In the UK, it is illegal unless it increases the UK tax take. If you want to check, read through the pages and documents linked off the following:

      http://www.hmrc.gov.uk/manuals/intmanual/Index.htm

      So the necessary legislation and rules already exist to address this. As usual they are poorly enforced, or not enforced at all, and the instinctive reaction of Porky Hodge is that we need yet more laws and more tax regulations, in addition to the circa 12,000 pages of Tolley's UK tax guide (five volumes, around 8 kg). I'm not sure whether stupidity is a criteria for MP's or it is just picked up as soon as they arrive at Westminster.

  14. millgate

    FINALLY ... AND ABOUT TIME !!

    I don't need to repeat that !

    If we, as consumers, were caught playing the same tricks as these megaliths .. we'd soon be punished, and possibly sent to prison.

    Unfortunately, the tax authorities do not design taxation rules with 'morals' in mind. NOW perhaps they'll change their minds and methods.

    If we, as customers in the territory in which multinational is permitted to operate; choose to pay our hard earned, TAXED, cash to these companies - we have EVERY RIGHT TO EXPECT the multinational to return some of their PROFITS to our own Government's tax coffers.

    That way we stand a fair chance of reducing our deficit !!!

    Go Government ! ... make it happen soon ... PLEASE.

  15. Anonymous Coward
    Anonymous Coward

    Morals Ha.

    Interesting exercise- do you have morals (yes/no pls). Now ask 50 people the same question. Now ask those people if criminals should have the vote, what is acceptable force against a burgler, etc. Now ask if you have morals.

    Morals are a fluid and very malleable idea which are ultimately wrong. They are wrong because we all think we are good and moral because we have morals although what we call morals is based on our own twisted ideas of good. Legal frameworks are supposed to act on the majority acceptable morals and so all this hype is easy manipulation to cause outrage (and so shift the morals).

    So back to the tax issue. We want nice and shiny but we dont want to pay for it. So we up tax. But that makes people who can afford to live to become poor so we have welfare. But who can pay for welfare? So we tax business and take money away, but we want them to employ people which requires money. We also want products at acceptable prices, so manipulate the price with public subsidy (market manipulation) but who pays for it? So up prices to pay tax but reduce price because things can be subsidised by the public money so raise tax.

    If your confused then you are equivalent to the tax system. What is worse is the demand from people that these multinationals pay less than local so we should increase tax on the multinational. Surely we should reduce the tax on local business or close the loopholes and accept a loss of business and rising prices.

    If we want our companies to have a fighting chance then reduce their tax's and maybe modify the rules slightly for multinationals to bring them both in line? We either want jobs or tax money for welfare but we cant demand both.

    To think you can pass the bill onto someone else without them complaining is ignorance. To pass the cost to those who have money (by earning) is robbery. Someone else will always have more money than you. That does not mean they should pay your bills when you are perfectly capable of living within your means and paying your way.

    (for the lib nuts who will pounce) This is not a statement that poor people should just be left without money, etc. It is the gov/middle class wet dream that everything should be paid for by public money then cry when the bills go up. Somebody has to pay for this stuff but the people being complained about are the ones who employ us to take us out of poverty

  16. Barrie Shepherd

    Lower Corporation Tax but apply the new level to Gross revenue not Net then they can pay their Overseas minders whatever they like for the use of the Corporate Logo from what is left.

    There is precious little I can offset against Income Tax so why should Corporations be any different?

    1. Anonymous Coward
      Facepalm

      @Barrie Shepherd

      "apply the new level to Gross revenue not Net "

      It's already done and called VAT.

  17. Anonymous Coward
    Anonymous Coward

    Margaret Hodge blames self?

    There are a few fundamental problems nicely avoided by Margaret Hodge presumably talking out of scope on the basis of publishing HM Revenue and Customs: Annual Report and Accounts 2011–12. Which is what the PAC she chairs does and not, for example, tax policy and regulatory matters.

    Tax avoidance is and MUST be legal if Government is to use taxation to support other policies. Otherwise it would be illegal to use less energy to avoid the climate change levy - or presumably give up alcohol or smoking when one is feeling impoverished.

    Taxation has rather more effects that raising revenue. Employees pay fairly enormous sums of tax (your rate may vary but add up your top level of paye taxtaion plus NI plus VAT as your marginal rate of taxation on new income - its not pleasant). Any effect on inward investment by multi national - say those doing R&D in the UK - could have severe impact.

    But most of all if there are new regulations and bills required they can only come from Ministers and MPs - and Ms Hodge has been both for rather a long time whilst er her own company investments have been legally avoiding taxation for rather a while.

  18. The Axe
    Facepalm

    Margaret Hodge = Hypocrite of the highest order

    Margaret Hodge has some balls to complain about companies not paying their "fair share" of tax when her family's company doesn't either. And she has a not unsubstantial 9% of shares in this global tax avoiding company. She personally has only 1% because she has but the rest into a trust fund to avoid tax. Inheritance tax this time. So she's tax avoiding to the maximum allowed by law, just like all the companies she's naming and shaming.

    Is it right that politicians and other groups with vested interests whip up a public frenzy about companies' tax affairs when said companies are following the law to the letter. Are we going to be ruled by the mob or law?

    Basically they are saying look over there, look at the dodgy company, ignore what I'm doing and what I'm saying as all I want is more of your tax money to spend on my favourite pet project (usually giving money to some group who will vote for them).

    1. Anonymous Coward
      Anonymous Coward

      Re: Margaret Hodge = Hypocrite of the highest order

      Or... She is arguing for a strengthening of the law, which will directly cost her, because it's the right thing to do.

      It's all how you look at things, you see a hypocrite, I see someone who is trying to do the right thing. I don't suppose she has control of the financial operations of companies of which you refer.

      1. tony
        Happy

        Re: Margaret Hodge = Hypocrite of the highest order

        "She is arguing for a strengthening of the law, which will directly cost her, because it's the right thing to do."

        She can argue for changing the law without taking advantage of a law she feels is wrong.

        I will not be lectured on tax by a bunch of thieving scum which, as the expenses episode demonstrated, do everything they can to avoid paying tax or maximizing their take.

        1. Anonymous Coward
          Anonymous Coward

          Re: Margaret Hodge = Hypocrite of the highest order

          Like I said: It's highly likely that she doesn't have any financial control over these companies. You also don't know what goes on within them and if she has tried to get them to pay more tax.

          As for calling all MPs thieving scum, there are many, indeed the majority, of MPs who had nothing to do with scamming expenses. Also, the expenses scandal had absolutely nothing to do with tax avoidance, the clue is in the name "expenses scandal".

          If you paint everyone with the same brush and expect such low standards, you'll never see MPs, like both of the Reading MPs who didn't claim expenses for their travel and didn't have a second home in London, although other MPs who lived nearer did.

          1. tony
            Happy

            Re: Margaret Hodge = Hypocrite of the highest order

            "You also don't know what goes on within them and if she has tried to get them to pay more tax."

            I do know she has put the majority of her share holding in a tax efficient trust to once again avoid tax.

            "Also, the expenses scandal had absolutely nothing to do with tax avoidance"

            Apart from the MP's who repeatedly flipped houses to avoid paying capital gains tax. And even the ones who didn't avoid tax they sought to immorally abuse the rules to take taxpayers money.

          2. Anonymous Coward
            Anonymous Coward

            Theiving Scum?

            Seems a pretty fair description to me.

  19. Ivan Headache

    Is Starbucks in the UK Starbucks?

    Or is it some other company trading as Starbucks?

    If it is the same company, why does it have to pay IP royalties to itself?

    Surely there is a loop-hole that can be closed fairly easily.

    During the 'trial', I found it quite amusing when the Strabucks man was asked if the coffee ever went to Switzerland before it came here.

    I wonder if the Starbucks coffee that is sold in Costco ever went through the same shenanigans - or does Costco just ship it over from the US like the other coffees they sell.

    I don't recollect having used a Starbucks now for about 5 years - there are better coffe shops everywhere.

  20. Derichleau
    Thumb Down

    While they're at it...

    It might be a good idea too to bring in legislation to ensure that only UK-based data controllers can operate a .co.uk website. At the moment we have a situation where Amazon are asking their Kindle Fire customers to pay £10 to opt-out of of direct marketing being served to their new Kindle. But as UK data subjects we all have a statutory right to opt-out of direct marketing with a company under section 11 of the DPA98. How does Amazon get around this? They operate the Amazon.co.uk website with a European-based data controller rather than a UK-based one and thus deny us of our rights.

    If they specifically wish to sell to UK consumers then Amazon should honour our data protection rights in my opinion and appoint a UK-based data controller.

    1. graeme leggett Silver badge

      Re: While they're at it...

      didn't know about that one.

      any other examples of businesses charging over-the-odds administration fees for what is effectively clicking a tickbox?

  21. Stratman

    Do any of the foaming tendency have an ISA? Or Premium Bonds? Contribute to a private pension?

    Where's your sense of moral outrage now?

  22. TRT Silver badge
    Paris Hilton

    BBC Ticker headline

    says Starbucks plans to change the way it allocates its costs for tax purposes.

    They've finally woken up and smelled the coffee!

    Paris, because "black coffee in bed".

  23. Paul Smith
    Facepalm

    What a load of b.

    Amazon, Google, Starbucks and all other corporate entities have legal and moral responsibilities to their stackholders, and to the law of the land in which they operate. If that law says if is legal from them to pay 0.01% turnover in tax, then they have satisfied both requirements. However, if the press, who would like to distract you from their own woes, and politicians who made the laws in the first place, want to make a song and dance about the inequities of a system that treats the rich better then the poor, we just let them.

    Why do we seem unable to comprehend that the press just want to sell ads, and politicians just want to sell votes, and consider everything they say and do, through that filter?

  24. Anonymous Coward
    Anonymous Coward

    Could someone explain WHY...

    I, as a company or private person, would pay X taxes when I an get away with X/2 taxes (insert any number you like) ?

    Where do you think those 500£ 50" flatscreens come from ? Let me enlighten you : YOU can only buy that appliance (or any other you may want) at such a stupidly low price if it's made in a country with very low or no corporate tax by people making a buck a day with no health or dental plan, redundancy pay, unemployment benefits and/or other social protection.

    So choose wisely.

    1. All names Taken
      Paris Hilton

      Re: Could someone explain WHY...

      I can try ...

      Most people pay by PAYE (Pay As You Earn) and remember income tax is just one of many UK taxes (road tax, corporation tax, council tax, .... along with duties and National Insurance).

      Most people avoiding tax payments legally are not on PAYE.

      So the majority of wage earners are on PAYE and one's employer has assumed payment of income tax and contributions meaning you have no choice.

      So as a PAYE taxpayer do you have any concessions?

      No. You pay your tax in advance to the Treasury whereas a non-PAYE will probably pay tax a year in arrears.

      You will not even gain any concessions for prepaying your tax burden and you might indeed overpay and the money is likely to sit with HMRC and the Treasury hoping you have overlooked the overpayment

      Even utility companies grant concession to most (but not all) prepayment models.

      As a UK PAYE taxpayer you are stuck with it m8.

      1. All names Taken
        Happy

        Re: Could someone explain WHY...

        I just wanted to reply to myself

      2. Anonymous Coward
        Anonymous Coward

        Re: Could someone explain WHY...

        PAYE is on the money you've already earned with your expected allowance for the year taken into account

        At most you could be temporarily out of pocket if your earnings changed dramatically for the worse and you didn't inform the tax office.

        Better to pay up front and not get stung for a tax bill you can't afford to pay when it does come around.

        1. All names Taken

          Re: Could someone explain WHY...

          Alternatively?

          PAYE has no place at all in the dynamic "no job for life" state of the nation.

          PAYE belongs to a time when workers had lifelong jobs with a lifelong employer.

          PAYE takes money on expected income even if the bases premise of expected income is false

          PAYE causes impoverishment always a bigger problem to the poor or returning to work workers

          PAYE is inflexible where society demands flexible workers

          PAYE reduces/disempowers a persons responsibility to manage their tax returns

          I could go on ...

  25. geordieboy
    Happy

    Reduced corporation tax

    Surely the easiest way to get all these big companies to pay their corporation tax in the UK is to reduce the rate so that they choose the UK as the place they tax. Lowering tax can increase the revenue the UK receives through tax

  26. Is it me!
    Big Brother

    Tax law bites MPs on bum

    Why not prosecute MPs for passing the badly defined laws that Google, Amazon et al are following.

    Don't obey the law, obey our current soundbites.

    This is the result of knee jerk legislation, and an over-complex taxation system.

  27. All names Taken
    Paris Hilton

    No! Don't do it!

    Try this instead: reduce taxes.

    Example 1

    UK person goes in shop to buy something costing £1

    UK person has to pay £1.20 as value added tax is 20%

    Same UK person or earner providing said UK person with dish to spend needs to earn minimally £1.20 plus income tax and national insurance. Shall we say 30% for convenience?

    Making earnings before tax and national insurance of £1.56.

    Hmm wait! Maybe there is shum mishtake?

    One has to earn (minimally) 1.56 in order to buy something costing 1.00?

    But that means the Guvmint (Okay - I will concede UK Treasury and civil serventia) gets more than the shop, the distributor and/or manufacturer.

    Shock?

    Horror?

    Wake up UK - you are being fleeced by your own kind?

  28. tony
    Happy

    Dan Hodges

    As Dan Hodges said, All these companies "got away" with is the equivalent of doing 30mph in a 30mph zone.

    If MPs want them to pay more tax then change the laws, all this talk of Fairshare without defining what is fair is rubbish.

  29. Anonymous Coward
    Anonymous Coward

    Only half the story

    The other half of course is that the top brass at HMRC are simply shafting the taxpayer by letting companies off the hook with criminally easy deals. I would like to see these people investigated and the full rationale behind these deals published - with legal proceedings for corruption following where there is sufficient evidence to support one.

    Id be interested to understand the thining behind Shell & Vodafone deals for starters.

    These people forget that they are there to serve the best interests of the public - not to develop opportunities for feathering their own nests once they leave these influential positions....

  30. richard 7

    But...

    "The MPs said HMRC needed a "change of mindset" on big multinationals and had to prosecute the ones that weren't paying the tax due in the UK."

    HMRC are was to busy screwing small businesses/self employed to the wall for making stupid, trivial mistakes then fining them into oblivion. If they go after the big fish ....

    A) They may not win as they'll be up against someone that can afford to defend themselves

    C) They'll loose all the perks they get given by the big boys

    D) There may be work involved.

  31. Anonymous Coward
    Anonymous Coward

    Can't see what they can do about it

    There is nothing illegal going on, in fact I don't even think 'morality' comes into it either.

    Like it or not we now live in a world of 'globalised' organisations. Every one of which takes advantage of the global economy to locate specific parts of their business to reduce costs. You will locate your manufacturing business in the country that reduces cost, your retail outlets in the location that reduces costs, but you can also locate the 'add markup' part of the chain in the location that reduces costs (e.g. corporation tax). Locating the 'add profit' part of the chain in Switzerland is no more immoral than locating the manufacturing part in China.

    Welcome to the globalised economy.

    I would love to be able to criticise these organisations, but I fear it would make me a hypocrite. When I want to buy something I too take advantage of the global economy and may choose to get a cheaper item from France than from a local shop, or UK retailer, and, as lots of other people do, I check for discount codes too. So I too am guilty of taking advantage of laws and global trade/economy to reduce costs. Is that Immoral? Can I criticise a company that is effectively doing the same thing (albeit on a larger scale)?

    1. peter_dtm
      Thumb Up

      Re: Can't see what they can do about it

      and of course, by buying at a cheaper price you are also avoiding tax, by paying less VAT

  32. This post has been deleted by its author

  33. Steve Rivers
    Boffin

    Before making rash comments - learn something about the subject

    http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/05/corporate-income-taxes-a-primer.html

  34. Greg J Preece

    Here's a notion

    Rather than punishing companies for moving their profits out of the country to where taxation rates are less insane, how about making the taxation rates here less insane and encouraging international business in the UK?

    Just a thought...

  35. ajsmith

    It's just not cricket

    I know these practices have been going on for decades, but it doesn't make it right. It seems to me that the richer you are as an individual or business, the more paying tax is an option rather than an obligation. Us PAYE plebs (I include myself in that) and small businesses without the resources to fund the high flying accountants and lawyers get squeezed because we have nowhere to hide. The big corporations get lucrative sales built on the back of our investment in safe trading conditions (governance) and infrastructure, but help to don't pay for it. Because of their scale and profitability (due in part to such a low tax burden), they squeeze out diversity and small businesses. Starbuck's et al can pack up and leave our shores as far as I'm concerned, I'm sure enough independent artisan coffee houses will spring up in their place all too happy to charge £4 for a cup of coffee and pay corporation tax.

    1. All names Taken
      Paris Hilton

      Re: It's just not cricket

      You get my vote aj

      If all of the tax dodging corporations, multinationals with negligible UK tax burden, financiers and load sharks left these shores perhaps the world would be a better place? Maybe the greedy would have to find another nation or two or more to rape unto poverty and state of being destitute?

      Equally though minimally 1.56 in earned income to buy something costing 1.00 shows the magnitude of tax burden placed upon UK subjects - I don't know why any of the political parties will not tell you so - maybe they too have vested interest in fleecing UK subjects?

      I'd guess that when proportions of other taxes, duties and contributions levied by UK national, local, regional guvmints we are probably closer to earning 2.00 to spend 1.00 with 1.00 going to the guvmint and your state pension is going to go down - very down.

      So, where are all the UK tax pennies going?

    2. Anonymous Coward
      Stop

      Re: It's just not cricket

      > without the resources to fund the high flying accountants and lawyers get squeezed because we have nowhere to hide.

      You might equally complain that you can't get the return on investment or the same interest rates because you don't borrow or invest ad much as the large companies.

      You might also complain that the large companys' fixed costs are unfairly low because of their size.

      I get sick of hearing about how immoral companies are because they make every effort to pay as little tax as possible. The problem for you is they're very good at it.

      The primary purpose of a company is to make as much money as possible for their owners. They're just doing exactly that. I don't think there is anybody here that wouldn't do just the same given the option.

      Reducing your tax burden is business decision. It has absolutely nothing to do with morals.

  36. Aitor 1

    Illegal?

    As far as I know, it is illegal in most countries to "shift" revenues.

    First of all, you have to either falsify accounts and/or buy/sell services/products at non real prices. This is illegal in most places.. and there are international accounting minimums.

    So no, it is illegal, and depending on country, you may be commiting more serious crimes.

    In Spain it is supposed to send you to jail. Reality says that you won't be prosecuted unless you brag about it and are small fish.

  37. Anonymous Coward
    Anonymous Coward

    Other Big IT companies

    ... like Microsoft do this too... certainly in the US ( http://www.bbc.co.uk/news/business-19668684 ) so I can't imagine they're not doing the same to the UK Gov

    So why no mention of it here.... MPs being too chummy with MS Executives or another reason?

  38. Anonymous Coward
    Thumb Up

    > Hodge added that the committee wasn't happy with the "unconvincing" and "evasive" responses from the three firms it questioned and that the taxmen at HMRC also "lacked clarity".

    You know, this is the only bit of the quote that I actually agree with.

    Google and Amazon should have come out plainly and directly and said:

    "We're not breaking the law. We are using every legal device available to lessen the amount of tax we have to pay. We're proud of that fact and we have an obligation to our shareholders to do just that. To do less would open us up to accusations of mismanagement. We do not believe that paying taxes is a moral obligation. Oh, and by the way, mind your own damn business."

    You know, I would have a lot more respect for someone if they just said that.

    1. Mole5000

      The problem is that the legality of many of the tax avoidance schemes has not been tested so companies cannot say what they are doing is definitely above board.

      Tax avoidance schemes are continually being found to be illegal, but prior to them being found to be illegal in court I'm sure the defenders of such schemes would be banging on about them being fully aboveboard and legal. You have to be a little cynical given that many tax avoidance schemes come with a legal defence fund for the scheme. If everything is leagal and above board why would that be necessary?

      1. Anonymous Coward
        Anonymous Coward

        The parliamentary commitee has already stated publicly that they are not accusing any of the participating companies of anything illegal. They are merely questioning their moral position on minimising their tax contribution to the extent that they are.

        I maintain that there is *no* moral aspect to tax. Those suggesting that there is seem to be under the impression that paying tax is some kind of charitable donation. It's not. Someone else said somewhere here that "Government is a necessary evil. I take that as my starting point."

        From that perspective (which mirrors my own), tax should be as small as can possible be supported, and no more.

        1. David Hicks
          Thumb Down

          They have access to our market, and use our common infrastructure, morally they should be paying tax on their profits like everyone that runs a UK business is expected to. Basically, they're not paying the price of entry.

          Even if everything they're doing is entirely legal, that does not itself mean it is moral. Seeking profit above all else, to the very edge of the law, is not inherently good or right. In countries where there are no environmental protection laws, is it moral for a company to maximise profit by just dumping its waste products into the nearest river?

  39. Lord Elpuss Silver badge
    FAIL

    Can't prosecute them

    As long as they're operating within the law, there's no way they can be prosecuted. They may be sneaky, conniving, ethically questionable, immoral douchebagels but as the events of the last few months have shown this is not punishable by law.

    In order to fix this, the loopholes must be closed first. Which means HMRC need to get their act together.

    MPs might like to consider actually doing something here instead of simply preaching what 'must' be done whilst taking backhanders all the way to the bank.

  40. Richard Neill

    Simple fix: VAT++; CorpTax=0

    The solution is very easy. Put VAT to 35% and scrap corporation tax. All the loopholes go away. We also become more competitive as a country because our talent can go towards productive work rather than the huge overheads involved in dealing with tax (and finding or removing loopholes). Also, VAT has exemptions for certain necessities, so this is fairer on the poorest.

  41. Anonymous Coward
    Anonymous Coward

    Totally unrelated

    Call me a trouble maker :)

    Greed is one of the 7 deadly sins . These people can't possibly call themselves good Christians can they ?

    But they do . Hypocrites they are . Business is full of so called self proclaimed Christians.

    They aren't . Good people ? let me laugh ! They are thieves that try to have a good conscience.

    Politicians ? lol .. they are just as bad. Crooks and liars.

    Really , it looks like Lucifer took over government and industry .

    Tax em , hard , slam them hard , and make tax evasion and redirections of profits illegal.

    Jail them . The morals are on our side.

    LOL

  42. chris lively
    FAIL

    Here's an idea. Take the current tax laws and throw them away. Then pull out a single sheet of paper and write:

    20% tax on all items sold in the uk.

    Sign it and be done. I have absolutely no problem with these companies doing all the paper pushing necessary to eek out every single dime they can. What I do have a problem with is dumb ass politicians making overly complicated tax codes with built in loop holes and then who pitch a fit when it's politically expedient to do so.

    If you really want google. Amazon, etc to "pay their fare share" then make it damned fair and simple.

    1. David Hicks
      FAIL

      Rubbish

      Utter rubbish.

      Sales taxes are regressive and hit the poor worst.

      What's more you'll find that if you apply this to companies they'll coalesce into single legal entities to avoid selling things between each other, therefore avoiding absolutely all tax.

      You've come up with an AWESOME formula for impoverishing the poor and middle classes.

      1. Anonymous Coward
        Facepalm

        Re: Rubbish

        @David Hicks

        "Sales taxes are regressive and hit the poor worst"

        In what way? You buy more you pay more tax so rich pays more then poor obviously. And it's quite common to have different percentages on some articles like basic food or books.

        "What's more you'll find that if you apply this to companies they'll coalesce into single legal entities to avoid selling things between each other, therefore avoiding absolutely all tax."

        And how this would help? VAT already does it without this scheme as you can deduct the VAT you paid from the VAT you charged on your sales. What's important is a price of a final product which consumer pays. And if you're trying to say that final consumers do not pay 100% of the tax you might want to educate yourself.

  43. visionthing

    Increase minimum wage?

    Maybe we should increase the minimum wage, there would be no need for the vast range of tax credits, or corporation tax, as employers would simply have to pay their employees more, pay more NI etc, at least the large companies would be paying more tax(directly and indirectly). If needs be have a higher minimum wage for multinational companies that "leverage international markets" to reduce their tax payments. The government should not be topping up income to ensure a living wage for employees of these large corporations.

  44. All names Taken
    Paris Hilton

    To be fair to politicians

    In the UK politicians can get into heap big trouble were they to micromanage their civil serventia.

    In theory politicians in UK set policy and civil servants are supposed to make policy happen.

    In practice civil servants do both and put politicians on the BBC as a means of quietening those "I want to do something" urges no?

  45. peter_dtm
    Devil

    morality - a socialist MP talks about morality ????

    My 1st moral duty is to my family, as such I have a moral duty to avoid all taxes.

    As a company my legal duty is to my shareholders, most trading companies sole reason for existing is to make a profit for their shareholders.

    Avoiding tax is a legal and moral duty.

    Being sickened by the hypocrasy of the likes of harman is an ethical & moral pleasure (thatcher's handbag of course)

    1. All names Taken

      Re: morality - a socialist MP talks about morality ????

      Hmmm - maybe:

      Socialist MPs mean well but are so naive unto the point of Darwinian selection against?

      They want a world with free health care, justice for all, the poor "taken care off", good housing, ...

      And all they end up with is a huge tax burden, overpaid police, teachers, civil servants, do gooders whose primary doing good is unto themselves, and as for wages in the healthcare sector "have you ever seen a skint doctor?" (thought not) or a poverty struck sheaf officer of any (writ large: ANY) publicly funded body? (thought not)

  46. h3

    I thought the whole point of the EU was have a single headquarters (For Amazon it is Luxemberg).

    I think it is working as designed.

  47. Aldous
    Meh

    Call me Cynical

    But funny how MP's are rounding on the American mega corps. "look little people we are doing something for you now take your budget cut medicine". Looks like a deflection move to me

    No mention of the UK based banks and the fun and games they play with tax

    Or Arms Companies (given their general shady dealing i bet BAE systems arn't being honest with tax)

    Or Oil Companies

  48. Anonymous Coward
    Anonymous Coward

    I think the MPs are being spoilt brats here.

    Google, Amazon, et al, should just move their operations (with the exception of warehouses) out of the UK, and publicly blame the MPs for the job losses and lost income tax revnue. Amazon could probably operate its fulfillment centres as efficiently from Calais or Rosslare, and google jobs are more timezone dependent than location dependent.

    Just because the golden goose isn't laying as many as you'd like is no reason to kill it.

  49. Anonymous Coward
    Anonymous Coward

    HMRC is bent

    What all these companies are doing with tax is already illegal. They are paying made up 'license' fees to an overseas holding corporation in a low/zero tax jurisdiction, with no regard as to whether those license fees are actually a fair representation of anything.

    Now imagine this. You're a self-employed IT guy, freelancing gigs here and there. You make 40k a year. Now instead of paying your full whack of tax, you create an offshore company in BVI or one of the Emirates. This is cheaper than you think, about 1000 quid per year. This offshore company owns your logo and brand name that you trade under, and charges you a license fee for using this franchise in the UK. Let's say it charges you 20k per year.

    Now if HMRC find you doing this, you'll go to jail. Because they'll say that the 20k you're paying does not reflect the fair value of what you're getting from that overseas company, which is owned by you and so obviously simply a vehicle to ensure you make your profit in a tax-free jurisdiction instead of the UK.

    It's one law for the little guy, but HMRC is happy to let the big companies carry on at this. This should not need new laws, the big question should be why are HMRC ignoring tax-evasion on an industrial scale? Rather than looking into the bank accounts of small businesses, they should be investigating their own employees accounts because something smells very, very bad.

  50. Steve Barnett
    Coat

    Government to boycott large IT Companies?!

    As Danny Alexander appears on the tv/radio saying that he is boycotting Starbucks until they start to pay tax on earnings in the UK do you think he will do the same for the large US based computer services and hardware companies that now completely control UK government IT and perhaps buy identical products and services from British IT companies who pay their taxes here ? That will be a No then.

    It's a Straw Dog campaign.

  51. Offnow

    Only consumers pay tax

    I imagine hardly a single MP realises that all company production costs, profits, dividends, business taxes, payroll taxes, are paid with VAT on top of them, entirely out of 'after tax' spending money received from their ultimate customers at the end of the supply chain: individual consumers. Who else is there? Government spending is made with consumers' cash. The consumer sees only the VAT and not the whole list of hidden taxes that are also included in retail prices.

    Real income is money that can be spent and the more we spend the more tax we pay, whilst so-called taxpayers are merely unwitting intermediaries in the process of passing consumers' tax money forward to HMRC. Whether we are rich or poor, we contribute at the same average rate; not quite the redistributive socialist scheme that we all thought.

    Our complex tax system is simply a charade, in that voters have no real perspective on what they earn or the tax that they pay. For every £2 we spend, £1 goes to be spent by government. It is as if when we buy a vacuum cleaner someone paid by government gets one too. The ultimate twofer.

  52. All names Taken
    Paris Hilton

    Call me Cynical too

    The whole farce is fallacious as the big companies are following the rules.

    Besides, do we really, really want more hard earned dosh going to the UK Treasury via HMRC or no?

    (Isn't that a bit like going up to some of the dodgier financiers saying here is my dosh do you want to look after it for me? Or even delusional Forex?

    Nope, the Treasury needs to get real reduce tax burden on UK subjects and get those hordes of people off the taxation gravy train.

    This, I propose, is the only effective solution.

  53. Anonymous Coward
    Anonymous Coward

    MPs stealing limelight but not doing their own jobs

    if these MPs are sooooo concerned with corporations not paying "appropriate" / "moral" amounts of tax - tax that they have no legal obligation to pay, and have a binding legal requirement not to pay if it's not required by law (it's called fiduciary duty to shareholders, Ms Hodge), then they should consider three things:

    1. If an MP, councillor or party hack does anything financially dodgy in a constituency, they should disband that constituency party (Rotherham comes to mind purely as the most recent) and have the honour not to stand in that constituency in the next local election. That would be moral. Not legally required.

    2. they should refuse to have anything to do in (any way whatsoever) with a company that provides "specialist trade and project finance team works with our bankers to offer customised finance packages ", if MPs are personally benefiting from those companies - and their Party doesn't feel need to kick them out - but if those companies are "out of bounds", so are all other companies that are not committing criminal offences (as long as have been convicted). Alternatively those companies are equally fair game, the MPs that benefit are similarly "immoral" and therefore should fall on their swords (yes, Ms Hodge, that's you). If MPs want to brand some people as immoral and others not, then those MPs should be prepared to accept the same description of themselves.

    3. if they want to criticise as immoral people who have worked within the law, they should be happy to be described as immoral themselves. They take money from public every year but public can't fire them, when they lose an election they get an outrageous pay-off (£0 would be maximum that's not outrageous) and get a very very nice pension thank you, more than state pension so immoral by some standards, and go off in to careers based on knowledge gained while in public service (also immoral).

    Is there a way to legally / morally stop an MP from spouting crap, permanently?

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