Let me guess ..
The 'extensive' HMRC audit cost UK taxpayers £138m to carry out.
For 2015/2016 accounts year I owe HMRC around £18,000 in corporation taxes. I shall now follow the Apple example and send them £180
Apple has agreed to cough up £136m in back taxes to HMRC following an "extensive audit" by the tax man. In its Company's House filing for the year ended April 2017, Apple Europe said: "Following an extensive audit by HMRC the company has agreed to pay the adjustment covering prior years up to September 26 2015. This payment of …
Based on this article (total length = 530km and estimated cost of £56 billion), £180 buys 1.7mm of track...
On his auguration, Trump decided to make a populist gesture. He'd require a volunteer from each branch of the armed forces and give them a financial reward.
First guy, an airman.
Trump : Now then we.re gonna measure you and for every inch you'll get $1000. How'd you like to be measured?"
"I'm a tall guy, Sir, so if you don't mind i'd like my height to be measured"
Out with the tape measure, hmmm 6'8", "Give the guy $80,000.
Second guy, a big burly sailor.
"If you don't mind, Sir, i'd like to be measured around my chest"
Tape measure out, 68". "Give the guy $68,000"
Third guy, an old scrawny guy from the Bronx ex infantry.
Says to the guy, "now don't forget, we're gonna measure you and it#s $1000 per inch". Trump chuckles and turns to his aides, and says "Hey guys, we're quids in here, this ain't gonna cost much."
"Well, Sir, i'm not so tall nor broad so if you don't mind i'd like to be measured from the tip of my dick to the bottom of my balls"
Tape comes a out and after a bit of fumbling the measuring guy says "hey i can't find your balls."
"That's right" says the little guy, "they got shot off in Afghanistan, now start measuring"
To put the numbers (ie. £180 and 2.29mm) into (a) context...
My researches indicate the new polymer £5 and £10 notes are 87.5 microns thick..
(can someone with a micrometer confirm this?)
So convert your £180 into 10 x £10 notes and 16 x £5 notes and make one stack out of them and the pile will be 2.275mm high...
Just a point to note for anyone that whinges about paying tax - you don't get poor by paying tax. It's actually the other way around. If you earned it and made a profit, you pay tax. The fact that you're able to generate tax revenue is a good thing - it means you've clearly got cash in your pocket. If, on the other hand, you went out and spent what isn't yours then get ready for the rubber glove treatment.
... so someone with an £18,000 corporation tax bill is clearly doing very nicely for themselves. There's plenty of people out there that would love an £18,000 tax bill.
My ex employer has never made a taxable profit because they are paying a large amount in interest to a company in the Channel Islands*. I think it's something like 15% interest (on a multi multi million pound loan) which is to my mind a bit excessive. They did also have a UK loan at a lower rate but they paid that one back very quickly - wonder why?!? They make Apple look quite good and no I'm not going to name them as I suspect they have better lawyers than me.
*I don't think it stays there though.
Not sure about the UK, but most tax jurisdictions have rules that prevent that sort of profit diversion - thin capitalization rules and rules around applicable interest rates on inter-0company rules. That rate may be fine if a normal bank loan would have cost about the same, but would be disallowed if such were available at, say, 7%.
Worth noting too that Apple's extra tax bill relates to transfer pricing; Apple was charging a certain amount for services rendered by the UK subsidiary and the rate charge was deemed to be below what would be charged by a third party and adjusted accordingly leading to the UK arm making a higher profit. These sort of disputes are very common and subject to continuing negotiation. All such inter-company deals that go outside one tax jurisdiction are supposed to take place at a rate equivalent to an arm's length third party transaction - and actually calculating that rate is subject to interpretation.
I'd also note that it is almost certain that the extra tax paid in the UK means less tax paid elsewhere - but you won't here that tax authority owning up to less tax being collected.
Is this like I agree not to murder people, or agree not to take your car without asking...?
The language around this stuff is all wrong.
It should read "We received this tax bill. Our accountants checked it and found it to be accurate. We paid it."
Likewise, there should never be talk of a "settlement". That implies both parties have had to reach a compromise. That's all wrong.
Believe me, I know from good experience that UK tax legislation is vague, and intentionally so. Accountants have no interest in that ever changing, and they are the people consulted whenever government thinks of changing anything around tax. But, a tax demand is a tax demand, not an invitation to negotiate. At least, that's how it should be.
is it any wonder that people leave HMRC to set up their own accountancy? I'm sure their brighter staff study the tax rules for loop holes and then go and start a consultancy/accounting business specifically to sell their services to rich people who need such things.
one day I hope to be rich enough that it's cheaper to employ an accountant than do my own tax return, so that said accountant will be able to save her or his own fees in tax savings ;-)
I think what they mean is that they are going to accept the figure rather than dispute or challenge it which seems fair enough. It is after all only right that people should be able to dispute amounts asked of them and how that was arrived at.
I would say that all tax demands are an invitation to negotiate. It's just that for most people there's little to dispute or challenge.
Paying taxes is always a negotiation because you prepare your own taxes. You pay what the forms you or your CPA prepared say you owe, and the tax authority may or may not question your preparation. If they do, you can defend all/part/none of your calculations, implicitly accepting theirs where you choose not to defend.
If they disagree with your defense of your preparation then you have to prove it to them (at least in the US - since the IRS are considered experts if you can't prove to them you're right, then by default they're right) and in the end you mutually on an amount and settle up.
If you ever receive a big bill that you owe more in taxes, and just pay it without question (unless you knew you were trying to get away with something and they caught you) then you're stupid. It is worth fighting if you and your CPA believe you're in the right, I know this from personal experience.
Transfer pricing isn't easily subject to hard and fast rules. There is a general rule that the rate should be the same as if the transaction was between unrelated third parties, fine, that's the easy part.
For some transactions it may be easy to define what that rate actually is, for others, not so simple. And it is a tax transfer between jurisdictions, not additional tax although if the rates in different areas vary significantly there may indeed by extra tax to pay.
So the rules aren't vague for some conspiracy reason, but more because defining the correct rate for EVERY transaction is probably impossible and negotiation is the only reasonable approach.
Tautology: noun. A statement that is true by necessity or by virtue of its logical form.
"Multinational companies must pay all taxes due and we don’t settle for less"
"What's that? Who decides what taxes are *due*? Why, we do of course. Thanks for asking."
They pay billions in taxes in the US - they are most definitely the largest taxpayer in the US. They have been claiming to be the largest taxpayer in the world for several years now, and no one has ever pointed to an example of a company that pays more.
So instead of laughing, put up or shut up - who pays more in taxes than Apple?
You are missing the point they are NOT PAYING THEIR FAIR SHARE IN TAXES. On the contrary, they are doing everything they can to not pay their fair share. That is why they have their money overseas. Time to hit these morons with a 90% tax if they want to repatriate the money. But no, we have a criminal piece of garbage running our country. He will do the opposite. Boycott Apple. They have proven to be untrustworthy. Look what they did slowing everyone's phones down. Then they dodge taxes. They have unethical business practices.
Thousands of US companies have been leaving money overseas to avoid (technically delay since the tax was owed but not due until the money came back to the US) paying tax in the US on foreign earnings, which was perfectly legal to do. I assume you want the same 90% rate for Google, Microsoft, Facebook, GE, Gilead and all the other companies with tens or hundreds of billions parked overseas just like Apple?
The new tax law has a 0% rate for overseas income earned after Jan. 1 this year, which sounds like a giveaway until you realize that just makes the US corporate tax system work like that of every other country in the world.
Stop watching Fox News and stop drinking the corporate Cool Aid. Who do you think is going to pay the taxes to run the government? YOU ARE. They are shifting the tax burden to YOU and ME. You just wait an see. Your taxes are going up buddy. And guess what. They are coming after your Social Security, Medicare, and Medicaid next. You just wait and see. The 1% are looting the country on the way out. They are the ones that are getting 80% of the tax breaks. This is BLATANT THEFT. And everyone one of the corrupt bought politicians that voted for this need to be CANNED come next election. BOYCOTT APPLE and any other company with corrupt business practices like this.
While I agree corporations must pay their taxes...
"BOYCOTT APPLE and any other company with corrupt business practices like this."
It is not a corrupt practice because it is allowed by law.
You will also need to boycott all the tech companies and other companies. They are all doing it.
The "corporations don't really pay any tax" argument is stupid. You could just as easily argue that you don't really pay any federal income tax either, since it is paid by your employer on your behalf and most taxpayers get a refund in the spring and not a tax bill.
Grow some balls AC. AC is just a 1%er SHIFTING HIS TAX BURDEN ONTO YOU. That is why they are defending a corporation with CORRUPT BUSINESS PRACTICES AND NO ETHICS. Either that or they are just an Apple fan boy who blindly follow them just like all the brainless Trumptards follow Trump. Keep sucking in the Fox News propaganda. Eventually there will be a revolution. Everyday common people aren't going to accept this forever. Trump chopped taxes for the corporations almost in half. GET READY FOR YOUR TAXES TO GO UP.
Unfortunately (or fortunately, depending on how you look at it), having a public sector appointment on your CV is unlikely to help you to transition to a private sector role. Your skillset has to be seriously in demand to make it happen. So much bad publicity around numerous high-profile public sector projects has seen to that. Lets say your company wants to start planning a new desktop rollout, which is something that happens (almost) everywhere all the time. Anyone fancy employing a senior NHS IT manager with a history of managing desktop rollouts? No, I thought not.
HMRC: would you pay some tax?
Apple: P*ss off.
HMRC: ...oh... well that's not very nice. Our Theresa was even going to buy an iMac... Please pay a bit... Even Vodafone coughed up a tiny amount.
Apple: Oh, ok, ok... stop crying! As a one-off gesture of goodwill, you can have whatever's in Tim Cook's wallet.
HMRC: ...wicked cool...!
£136m changes hands. Everybody happy!
For all physical products sold the UK, the taxman gets 20% of the price as VAT. That's more than your 10%, so done.
Also, for all companies employing people in the UK, the company pays the taxman money for payroll taxes (employer's NIC, "employees" NIC, income tax) for all their UK employees.
The concern here is taxes on _profits_, and multinational companies can change where their profits happen to benefit from lower taxes. If Apple employees in California design a new iPhone, it's built in China, imported via a port in Holland, it uses online services from servers in Ireland, it's marketed by a marketing team in France, and it's sold by a sales team in Germany to a shop in the UK that in turn sells the phone to a customer in the UK, all the above funded by stocks and bonds issued in the USA, then where should the profit be recognized? Do you allocate some of the profit to each of those countries? Heck, how do you even figure out the profit - e.g. how much of the design & marketing cost gets figured against each sale, etc. The answer at the moment is that lawyers and lobbyists and politicians get involved, and the corporation can fudge things however it wants.
In my opinion, corporation tax should be abolished, you can just set VAT and payroll taxes to fair tax rates and be done with it, and everyone pays the same percent of turnover. That's not possible to fudge.
"In my opinion, corporation tax should be abolished, you can just set VAT and payroll taxes to fair tax rates and be done with it, and everyone pays the same percent of turnover. That's not possible to fudge."
Until you find a company that pays staff almost nothing but which conveniently provides huge pensions and all-expenses-paid staff accomodation. You can fudge anything and those earning the most will always be able to spend more time/cash on fudging.
I will accept, however, that my example would be pretty blatant. In fact, almost any simplification of the tax code will make it (slightly) harder to fudge things. You could, for example, scrap several thousand "tax breaks" that have been introduced at a rate of several per year (because they are eye-catching and politicians like that) since the dawn of time. This would hurt almost no-one except the accountants.
Revenue isn’t profit. Companies currently pay tax on profit.
If tax laws are changed to tax revenue companies can adjust their prices accordingly.
In the UK people pay VAT when we buy most non essential products, also payable on insurance and utilities at reduced rates. That is like a tax on revenue in that every sale to an individual generates 20% at retail, less for insurance, utilities. Yes HMRC allow those collecting vat to keep some for themselves but still every consumer sale includes 20% tax.
"Then explain Ireland?"
That's an example of a wider phenomenon whereby tax dodgers can break any *individual* law for a few years until the authorities catch up, whereupon they come to a "settlement" about previous years' mis-behaviour and have to find a new dodge in future. Since the authorities are always a few years behind the dodgers, the long-term effect is a rolling window of opportunity for the most "innovative" accountants.
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