Ed Miliband brands Google's UK tax avoidance 'WRONG' Ed Miliband launched a caustic attack on Google today, saying: "When Google goes to extraordinary lengths to avoid paying its taxes, I say it’s wrong." The Labour party leader - who was speaking at Google's annual Big Tent event in Watford - accused the "biggest companies" of having a "culture of irresponsibility" when it …
I think the point is that no-one fully understands all muti-national tax laws. There are thousands of them, are insanely complex and can be combined in an infinite number of ways to be exploited. Close one loop hole, and you more than likely open another.
The real outrage is that many of the treasury consultants who helped designed our taxes work for companies who, simultaneously, offer advice to the likes of Google on how to avoid paying them.
So they are paid to design the maze, and then paid again to show people where they left the holes in it.
Exactly, if they are doing something wrong by following the rules laid out by the government. Why hasn't the government (especially the 13 years under Labour's policies) done something to change the rules to ensure it fits with their policy.
I wonder whether Ed Milliband has got any ISA's or say Pension contributions through which he avoids paying tax. And then there is ofcourse his own brother David who is employing exactly the same type of tax avoidance schemes...
Oh the hypocrasy of it all and cheap point scoring and propaganda, but it surprises me that I am surprised.
Isas and pension tax breaks are deliberate and the government encourages you to do it. E.g it does not expect you to pay tax on the interest of your first 6 odd grand of savings that year.
An individual can't be attacked for doing this, in the same way people shouldn't be attacked for claiming child benefit to which they are entitled. You could argue that we shouldn't have ISAS or similar things at all but not that people shouldn't use them when the government puts them there.
The government doesn't intend for Google to pipe money all around the world just to avoid paying UK tax. The loopholes which Google are using are not intentional tax breaks.
The problem is not the law in the UK, but the laws globally. If you fix the problem in the UK then the businesses don't set up a division here.
All countries have to make co-ordinated changes.
You can take 0.5% of £32 billion plus a few thousand jobs or 100% of 0% and no jobs, which is a vote winner?
The problem is not the law in the UK, but the laws globally. If you fix the problem in the UK then the businesses don't set up a division here.
All countries have to make co-ordinated changes.
You can take 0.5% of £32 billion plus a few thousand jobs or 100% of 0% and no jobs, which is a vote winner?
I agree the coordinated change is desirable, but the temptation to beggar ones neighbour (hello Ireland!) is going to be intense. Ireland has, after all, stated that it will veto EU policy proposals to coordinate tax rates.
That said, Google is not going to leave the UK market if it's forced to pay tax. For Google, 70% of what they currently have in profit is better than leaving 100% to a competitor that will play by the (new) rules.
*IMHO, Ireland and the other leeches can fuck off out of the EU; selling out all of the other members in return for a few coins from Google, Intel, Starbucks et al. - they're as bad as the Judas they despise.
"So why did he vote for all the tax laws during Labours government that companies are using?"
Precisely!
It is the politicians who have enacted theses tax laws at the behest (a.k.a. lobbying) of the corporations...and NOW they are getting their shorts in a wad over THEIR LAWS?
Tell you what...don't like what the companies are doing? THEN CHANGE THE F*%&ING LAWS. And that goes for ALL politicians the world over.
The arses here in the US are just as slimy. Feigning outrage on laws these idiots enacted. What a load of bullshit. Sick to death of them all. Not one of them worth their weight in dog poo.
All of you commentards claiming hypocrisy irritate me no end. Here's a shocking fact for you, politicians say what's popular. Wanna know why? Because a voting system exists where the most popular thing gets the most votes. When he voted yes to those Tax laws, society didn't really give a crap, and lobbying pushing them towards the Google preferential vote.
Now public opinion has spotted the loophole and lined up against it, so the politician has done his bloody job and gone with public opinion. And you're against that? Seriously? Their job is to be two faced, their job is to represent someone else's opinion. I thought techies were above this Daily Mail bulls-
I think claiming training costs is better than not training at all, which is a fundamental problem with modern capitalism, (as long as the training is training, that the company does lose money, rather than get trainees to do work for little pay and then claim tax rebates/reductions - as in the current exploitation of the terrible apprenticeships scheme launched by this government)
Doesn't sound like it. Sounds like this is standard operating procedure for any multinational. Therefore, strictly, it's not extraordinary.
All Millband and any other politician that doesn't like it needs to do is CHANGE THE LAW. Standing there and berating a multinational for trying to make the most money it legally can seems a bit Canute like. It would also be more impressive if Milliband hadn't been so cosy with Gordon Brown and Ed Balls for 10+ years when they *could* have started to make the tax system simpler and more effective But they didn't, they didn't even talk about sorting it out, because it wasn't a problem was it, because multinationals only started doing this in 2008, and only really seriously since 2010. So what could they have done.
/rant
Google operate a subsidiary in Ireland, this is where money is collected, this money is funneled into a zero-employee company in Amsterdam, which in turn funnels it to a Caribbean (IIRC) tax haven with no corporation tax.
This is clearly extra-ordinary, in that it is certainly not ordinary. You don't accidentally end up with a corporate structure like this, it has been carefully planned in order to pay as little tax as possible - lengths have definitely been gone to and they're not ordinary lengths.
It's very easy to moralise about the big nasty corporation and their creative accounting practices, it's slightly harder yet more fruitful to stop them from doing it in the first place.
Labour need to say how they'd stop the practice.
Given that there are various crown dependencies and overseas territories which are notorious tax shelters (Cayman Islands, Gibraltar, Jersey / Sark, Isle of Man etc.), maybe they should start turning the screws on those places and leaning on other countries to do likewise in their spheres of influence.
If you look into the crown dependencies, you discover an interesting fact - they're not really under parliamentary control.
Nor is the City of London, which is an independent corporation.
So the chances of tax shelters suddenly disbursing all those trillions and cutting the taxes the rest of us have to pay is exactly zero.
As this is for the Crown Dependencies etc. a significant source of income, killing it could ensure we have to send more in aid than we would recover in Tax.
That's why this is all so much bluster and politicians making noise about it, nothing will be done.
"If you look into the crown dependencies, you discover an interesting fact - they're not really under parliamentary control."
I didn't say they were, nor did I imply it being very specific about their relationship to the UK. But they can be leaned on.
e.g. the UK scrapped the Low Value Consignment Relief which was implemented so Jersey could export things like flowers to the UK but ended up allowing Amazon, Play.com et al to export goods out of the EU, into Jersey and then back into the UK to avoid VAT.
I'm sure there are various punitive measures and incentives that can be dangled in front of these places to change their minds about particular loopholes.
And it was Labour who pushed forward with PFI etc which is simply another dodgy accounting ploy to hide the true cost, as well as enrich their tax avoiding chums.
Our MPs are long on talk, and very short on action when it comes to all this, have you noticed?
Maybe we should tax hot air!
this whole situation makes me want to laugh (and cry). We have politicians "multinational bashing" because they are avoiding paying millions in taxes because of loopholes put into the tax system by these politicians. But according to the same politicians we should all stop "banker bashing", even though they nearly destroyed the world economy and had to be bailed out to the tune of BILLIONS! Talk about double standards! And they wonder why people distrust politicians.
Maybe it's just me, but this type of comment really gives me the shits. How dare he say that any taxpayer is not allowed to structure his/her/their affairs so as to limit the incidence of tax. Imposing taxes is not a God-given right and it shits me when politicians behave as though it is.
They make the rules. Taxpayers follow them. Some do it stupidly, others are more responsible with THEIR money (not the Government's).
Harriet Harman - was revealed to be one of the beneficiaries of a trust set up in her father's will designed to reduce the amount of tax she would eventually pay on his estate.
Lady Margaret Eve Hodge - shareholder in the family business today the world's largest privately owned steel-trading corporation and the sixth largest British company in private hands, with an annual turnover of over £6Bn 2011, this company seems to pay similar levels of tax to Apple & Google.
Tony Blair - another person who seems to dodge tax that Miliband should be complaining about.
The list just keeps growing...........
In the UK imposing taxes is a God given right if you want to follow (outdated rarely thought about) historical tradition and theology.
The power to impose taxes is given to Parliament by the crown - taxes can't be imposed without royal assent.
The power of the crown is given to the monarch during their coronation by the Archbishop of Canterbury in a Christian religious ceremony as the power and grace to rule is considered to be given by God.
So yes, the power to impose taxes in the UK is a God given right, and there is a big (moral) difference between minimizing your tax affairs by taking advantages of the schemes and systems parliament intended in the law, and avoiding and/or evading tax by deliberately twisting and using contrived structures and reading of the law to go far far beyond what any reasonable person would consider the spirit or intention of the laws.
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"Ed Miliband used a 'deed of variation' to his father's will transferring ownership of 40% of the house to himself and his brother, after his father had died. This meant that they only paid tax on the 60% of the house once his mother died."
His mother is still alive as far as I am aware. David Milliband bought the house in question outright some time ago.
" point remains though that it has been used as a tool to avoid their eventual inheritance tax liability."
Sure. Although not an extraordinary tool perhaps. And of course since he has sold his share of that house and paid tax on the proceeds, not a tool that will ever be employed by him.
Just trying to clarify the facts - I wouldn't want anyone to think I don't believe politicians are hypocrites.
The tax avoidance will be employed. His mother's estate will be/was no longer liable for the full amount of inheritance tax. It was passed to Ed/David as a mechanism to avoid tax. If David bought it, it was at a lower price because he already "owned" some of it after the deed of variation in his father's will.
If you have a child out of wedlock its still illegitimate if you marry later.
He set up a structure to avoid tax, just because he didn't use it later doesn't mean he isn't guilty of planning to avoid tax. Just because Google did it better doesn't make him any less guilty.
He & Balls could have done something while in power. They didn't, they made it easier, they also allowed companies to offshore & onshore to avoid tax.
This isn't a new practice its being going on for decades, its just easier with the Internet and global travel
Please, commentards, remember there is a difference between tax avoidance and tax evasion.
Tax avoidance is entirely legal, moral, natural and a human response to being asked to pay taxes. We all do it - when VAT went up, did you not buy large ticket items in advance before it went up? I know I saved about £50 buying my season ticket in December rather than January.
I dislike Ed Miliband's policys (or lack thereof), but I don't think more or less of him knowing he has sensibly arranged his affairs to minimise inheritance tax*. If he is doing things by the book, he is/will be paying the right amount of tax for his circumstances, he has just structured his circumstances to minimise how much the revenue can take away.
Lord Clyde said it best, that's why he got the big bucks:
No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue
The biggest issue affecting us in the UK is that the rules of the EU allow commercial activity to seep out of our country and be registered in another one for tax purposes. I've no problem with google claiming chargebacks for the cost of providing systems to the UK sales teams, or funnelling all the profits after tax to some holding company in the Caymans, but fuck it, revenue and profit from UK sales should result in UK taxes. I don't think we should leave the EU, but some rules have to change.
* TBH, I reckon David set it all up
"Power shouldn't accumulate between a few powerful firms," he said.
This coming from a party that refused to do anything about the illegal interception of communications of tens of thousands of BT customers by BT.
As an aside the former Labour secretary of state for trade and industry Patricia Hewitt was a non-executive director at BT the last time I checked.
It must be nice work if you can get it...
Beating up corporates for using tax avoidance schemes might play well with his core vote, but it's not a big issue for most people in the UK. Otherwise, Tesco and Starbucks outlets nationwide would close down as people vote with their wallets. Corporations don't pay taxes; people do. Companies like Tesco are as cheap as they are mainly because they find and exploit efficiencies. Paying as little tax as possible is just one of those efficiencies. HMRC isn't a charity and people should resist the temptation to talk about paying tax in the same moral terms as donating money to a charity.
The sad thing is not that some corporates use tax avoidance schemes, but that moronic Milliband will probably be our Prime Minister in a couple of years. That makes me sad not only because I think he's completely unqualified for the job, but also because it will mean that millions of people have been daft enough to vote for him.
These days, politicians of all stripes are a hateful bunch of self-interested parasites :-(
/rant
OK then, how about Boris 'phone-hacking-is-codswallop' Johnson? The way things are going he could end up being leader sooner rather than later.
The only point I was trying to make is that people are deluding themselves if they think either side is better than the other. They're all as bad as each other, especially since both sides like to tinker with the tax system rather than fix things properly - with the end result being that we end up with a tax system full of the very loopholes that each party has had a hand in creating.
Interesting comparison of the big profit driven companies having to attract customers doing really well and surviving the recession and the government run monopolies of the UK with their enforced taxation which is doing badly.
And to shine further light on the playing field it is the gov who sets the laws and the tax rates (the companies just followed the rules set down).
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