'Ridiculous, rubbish, outrageous, complete bollocks': Just some reviews for Amazon's corporate contribution to Blighty's coffers

Look a bit closer to home

It's would be a lot more convincing if the leader of the House of Commons wasn't making millions from a hedge fund based in the Cayman Islands. Nothing will change while members of the serving government have a vested personal interest in keeping tax loopholes open.

Not really Amazon's fault

They, like everyone, just take advantage of the tax rules created by the government(s). If those rules allow them to pay "unfairly" little tax, the solution lies squarely with those governments: change the rules. Preferably by making them simpler so that we can all understand what we have to pay.

Creating rules that allow this behaviour, and then whinging that it "isn't fair" that Amazon don't pay more than the laws require, is just an attempt to hide the real source of the problem.

A few of us at work are already using Amazon to the minimum needed

There's legal/illegal, and moral/immoral.

A few of us at work are not impressed with Amazon and only use them as a last ditch point when we can't get things anywhere else.

Some of that failure is down to other retailers being behind the game and having problems with their internet frontages.

I have talked with some people who have complained bitterly about Amazon's tax avoidance and I've postulated, "So you're not using them any more then." "Oh yes, I use them a lot." .... Doh.

Tax paid by employees are employees' money, not employer's one.

It's always funny how some PRs always try to throw dust in the eyes with misleading arguments. Income taxes are paid by employees with their money.

The fact a company may be required to pay taxes on behalf of employees - usually a design to reduce evasion - doesn't mean that those are company money - they are still full part of the employee salary he or she earned. For example, if income tax rates become lower, an employee will automatically bring home more net money because it will he or she who will pay lower taxes, not the company - it has no right to cash the difference. Vice versa, if the tax rates becomes higher, the company will give the employee less net money, they won't be paid with company money.

And being an employee salary, they are included in the company costs that are deducted from the employer gross revenues.

If any company is willingly to pay my taxes, while paying me the full gross salary, I will work for them happily (albeit I guess it won't be possible, because the revenue service will probably object that if someone pays my taxes, it's actually giving me more money I should pay taxes on...)

The same is true for VAT. It's fully paid by the end customer only. If they don't buy at Amazon, they will still pay VAT if they buy somewhere else. From a pure VAT perspective, the lower Amazon prices also mean a lower VAT income.

Sure, Amazon employs people, but it does that because it needs them, not out of good will only, and each employee allows Amazon to earn n time the salary paid - or Amazon would have fired them already.

So it's not a charity that should be exempt from taxes just because it gives people a job - all businesses do that out of sheer need.

"Hodge went on to list the benefits bestowed on Amazon by dint of being in Blighty, including healthy and educated workers, thanks to the cash spent by UK taxpayers on the NHS and schooling; the broadband infrastructure used to order stuff from the retail store; and, of course, the transport infrastructure used to ship gear around the country."

A good point often overlooked.

Also don’t forget

that many of these companies employ/pay politicians in many countries to make sure that those tax laws stay porous, so they can be evaded.

This how its meant to work and Hodge knows it.

Successive UK governments - including ones of which Margaret Hodge was a member - have colluded in this for decades now. The 'Big Four' accountancy firms provide staff, without charge, to advise MPs on drafting the loopholed legislation that makes this sort of practice legal - or practically so. They then advise their corporate clients on how to evade the laws so drafted.

The 'Revolving Door' system (which supposedly prevents them getting paid for blatant conflicts of interest) actually allows MPs and Civil Servants to move into well-paid sinecures with these same firms after their careers are over.

Meanwhile, HMRC has about half the staff it had 10 years ago and has been run by a succession of people who previously worked for the 'Big Four' and, after a brief stint with the tax man, go back to working for them. Oddly enough, these people don't seem very keen on enforcing the few legal powers they actually have, especially against their former (and future) employers. In the UK only 'little people' pay tax.

Please send more tax than our rules say you should.

Do we really think the NHS would be in its current state if MP's were obliged to get all their health services from it?

That you were speaking to Margret Hodge and didn't discuss her families use of offshore shell companies to pay less tax, shows you didnt do your research and I doubt you think people should pay as much tax as they feel morally obligated to do. So are you really making a story of about a fishing millionaire (who didnt pay more tax than she needed to) who says "Amazon didnt pay more tax than it needed to!"

Margaret Hodge's outrage and most of this article is deflecting from the real questions about how to change the laws.

It's weird how money has more freedom than people.

EU

"Europe," she said, "is being very robust in demanding transparency, on where profits are earned and where money is made."

Of course, the UK is due to exit that club at some point in the future.

The crux of Amazon's low corporation tax bill in the UK (along with a few other multinationals) is that they can supply goods and services in the UK but say they are sold out of Ireland or Luxembourg and invoice from one of those jurisdictions, which offer them favourable tax rates - and single market rules allow them to do this. Once the UK is no longer part of the single market, that loophole would not be so attractive.

We need a new tax!

We need a new tax!

Ok, I'm not really a tax, tax, tax person, but there are a couple of things that really annoy me.

- Outrageous linked company interest rates

- Outrageous linked company licensing rates

All designed to reduce profit in one tax regime and boost it in a lower tax regime.

How about a 100% rate on linked company interest rates in excess of the "Official Rate" and a 100% rate on linked company licensing fees?

For simplicity I feel a transaction tax would be effective and simpler to administer. A transaction would be taxed in the physical jurisdiction it takes place which would be indisputable. It should also include any internal transfer pricing transactions. The larger the value of the transaction then graduate the tax accordingly to prevent artificial aggregation of smaller transactions. This would level the playing field between smaller and large business.