Joined: Feb 17 2002 Posts: 28357 Location: MACS0647-JD
Starbucks UK said it was following the rules. In a statement, a spokesman for the company said: “We have paid and will continue to pay our fair share of taxes in full compliance with all UK tax laws, as we always have."
So, Starbucks fair share for the last three years is thus NIL. My personal fair share of tax is thousands of pounds more than Starbucks. That sounds fair. A pensioner who has a modest private company pension too, so has to pay tax on it, has to pay more to HMRC than Starbucks. Yep, absolutely fair.
Clearly it's main competitor Costa, which apparently pays corporation tax at around 31% of profits, must be paying about 30X its fair share. That's sporting.
I particularly like the way instead of setting up a company in the UK, you can seemingly instead "loan" the UK company the setup costs, and then charge high interest on these "loans" so the UK company sets off swingeing loan and interest repayments against profits. Also a good wheeze is to make your UK arm "pay royalties" (of 6% of turnover) for its use of your "intellectual property". Presumably that takes care of hoovering up any odd bit of profit left aftre you've dutifully made your loan repayments.
All perfectly legal, and all exactly the sort of thing that any government should stamp out. They should simply be assessed to, and made to pay, corporation tax year on year at a reasonable percentage of gross profits, and argue the toss later. HMRC should be able to look at the whole picture and (for example) perhaps ignore the whole "loan" arrangement as being a purely internal convenience arrangement for the larger group and not tax deductible.
Companies like Amazon which are said to filter their sales through was it Luxembourg or wherever (generated sales of more than £7.6bn in the UK over the past three years but has not paid any corporation tax on the profits from those sales) should be told "very good, but regardless of your wheeze, you have to pay tax on the business you did for UK punters and on that basis we assess you £Xm".
What they are doing may be all legal, but it stinks. I don't often favour retrospective legislation but certainly would in these sort of cases. And the rest of them, as no doubt many of the major companies will be at it.
However instead of vigorously getting after these people, HMRC is basically supine and toothless, they can't match the high-powered lawyers and accountants (all effectively being paid for by the UK taxpayer) and not only bend over, but do sweetheart deals such as Hartnett's shameful let-off with Vodafone, which was supposed to hit the fan, but seems to have been slowly pushed to the background and buried.
And they have their shameless apologists too. One "tax expert" John Whiting from the Chartered Institute of Taxation told the BBC it was "important to look at the bigger picture."
"In may ways corporation tax is a bit of a bonus - the company should be paying it if it is making profits," he said.
"But in many ways the biggest contribution it makes is in creating employment - [which generates] PAYE, National Insurance, paying business rates, VAT.
No, that is NOT a contribution which Starbucks generates. Sure, they pay quarterly VAT returns. So does every business. But for UK based busiensses that doesn't get them brownie points against corporation tax on profits. They all have to pay their rates too, but that is because they use the services for which those rates are levied! It's not some magnificent benevolent gesture! The argument is entirely bogus. The fact that it deducts PAYE tax and National insurance from its employees and pays it over is money that the fookin employees "generate". By paying the full rate of tax, automatically, deducted at source, on their meagre earnings. In the past 3 years, it seems, each taxpaying Starbucks employee has paid more, on their own, to HMRC than their gargantuan employer!
Last edited by Ferocious Aardvark on stardate Jun 26, 3013 11:27 am, edited 48,562,867,458,300,023 times in total
Joined: Dec 22 2001 Posts: 17134 Location: Johannesberg, South Africa
I don't know what the answer is to corporate tax in a global economy (I'm not sure the Costa/Starbucks comparison is valid as one talks about revenue and another profit, and half of the articles you see about this kind of thing seem unable to differentiate between the two) but it's clear that the current methods aren't working, and it's probably going to get worse rather than better. If Corporation tax can't be made to work then we should stop banging our head against that brick wall.
Following what John Whiting says, perhaps the answer is to cancel Corporation tax completely, and make up on things that are less easily avoided - PAYE, National Insurance, business rates, VAT etc.
Richie wrote: Following what John Whiting says, perhaps the answer is to cancel Corporation tax completely, and make up on things that are less easily avoided - PAYE, National Insurance, business rates, VAT etc.
Or simply have a government department who's sole job it is to expose those corporations who pay regular UK corporation tax and those who don't, its (or should be) public domain stuff, after all its our money they are salting away offshore.
A simple list of those that HMRC consider to be acting fairly and those who they consider not to be would suffice, and then we can all decide for ourselves whether or not we assist them in their skullduggery or use their rivals who are on the "fair" list, all it needs to be is HMRC's opinion and if they are wrong then the corporates can explain their positions, we're all grown-ups here.
We saw how quickly some of those same corporations threw their temporary Olympic Sponsor tax concessions back into the pot when they generated a couple of days bad publicity, show us the list and let the public decide.
Someday everything is gonna be different, when I paint my masterpiece ---------------------------------------------------------- Online art gallery, selling original landscape artwork ---------------------------------------------------------- JerryChicken - The Blog ----------------------------------------------------------
Joined: Feb 27 2002 Posts: 18060 Location: On the road
Ferocious Aardvark wrote:Starbucks UK said it was following the rules. In a statement, a spokesman for the company said: “We have paid and will continue to pay our fair share of taxes in full compliance with all UK tax laws, as we always have."
So, Starbucks fair share for the last three years is thus NIL. My personal fair share of tax is thousands of pounds more than Starbucks. That sounds fair. A pensioner who has a modest private company pension too, so has to pay tax on it, has to pay more to HMRC than Starbucks. Yep, absolutely fair.
Clearly it's main competitor Costa, which apparently pays corporation tax at around 31% of profits, must be paying about 30X its fair share. That's sporting.
I particularly like the way instead of setting up a company in the UK, you can seemingly instead "loan" the UK company the setup costs, and then charge high interest on these "loans" so the UK company sets off swingeing loan and interest repayments against profits. Also a good wheeze is to make your UK arm "pay royalties" (of 6% of turnover) for its use of your "intellectual property". Presumably that takes care of hoovering up any odd bit of profit left aftre you've dutifully made your loan repayments.
All perfectly legal, and all exactly the sort of thing that any government should stamp out. They should simply be assessed to, and made to pay, corporation tax year on year at a reasonable percentage of gross profits, and argue the toss later. HMRC should be able to look at the whole picture and (for example) perhaps ignore the whole "loan" arrangement as being a purely internal convenience arrangement for the larger group and not tax deductible.
Companies like Amazon which are said to filter their sales through was it Luxembourg or wherever (generated sales of more than £7.6bn in the UK over the past three years but has not paid any corporation tax on the profits from those sales) should be told "very good, but regardless of your wheeze, you have to pay tax on the business you did for UK punters and on that basis we assess you £Xm".
What they are doing may be all legal, but it stinks. I don't often favour retrospective legislation but certainly would in these sort of cases. And the rest of them, as no doubt many of the major companies will be at it.
However instead of vigorously getting after these people, HMRC is basically supine and toothless, they can't match the high-powered lawyers and accountants (all effectively being paid for by the UK taxpayer) and not only bend over, but do sweetheart deals such as Hartnett's shameful let-off with Vodafone, which was supposed to hit the fan, but seems to have been slowly pushed to the background and buried.
And they have their shameless apologists too. One "tax expert" John Whiting from the Chartered Institute of Taxation told the BBC it was "important to look at the bigger picture."
"In may ways corporation tax is a bit of a bonus - the company should be paying it if it is making profits," he said.
"But in many ways the biggest contribution it makes is in creating employment - [which generates] PAYE, National Insurance, paying business rates, VAT.
No, that is NOT a contribution which Starbucks generates. Sure, they pay quarterly VAT returns. So does every business. But for UK based busiensses that doesn't get them brownie points against corporation tax on profits. They all have to pay their rates too, but that is because they use the services for which those rates are levied! It's not some magnificent benevolent gesture! The argument is entirely bogus. The fact that it deducts PAYE tax and National insurance from its employees and pays it over is money that the fookin employees "generate". By paying the full rate of tax, automatically, deducted at source, on their meagre earnings. In the past 3 years, it seems, each taxpaying Starbucks employee has paid more, on their own, to HMRC than their gargantuan employer!
Paragraph 2 isn't quite accurate - in fact it isn't factually correct at all - this company will pay and will have paid millions in employers NI and acted as a collector of VAT for HMRC free of charge to the tune of about £70m a year. Don't blame these companies blame the tax laws that allow this - and there will be several British companies doing exactly the same in other countries. Perhaps all those clammering for higher taxes might think again, high taxes will just force those you are trying to catch into ever more devious ways of avoidance. 20% of something is better than 0% of anything
Your job is to say to yourself on a job interview does the hiring manager likes me or not. If you aren't a particular manager's cup of tea, you haven't failed -- you've dodged a bullet.
Joined: Feb 27 2002 Posts: 18060 Location: On the road
JerryChicken wrote:Or simply have a government department who's sole job it is to expose those corporations who pay regular UK corporation tax and those who don't, its (or should be) public domain stuff, after all its our money they are salting away offshore.
A simple list of those that HMRC consider to be acting fairly and those who they consider not to be would suffice, and then we can all decide for ourselves whether or not we assist them in their skullduggery or use their rivals who are on the "fair" list, all it needs to be is HMRC's opinion and if they are wrong then the corporates can explain their positions, we're all grown-ups here.
We saw how quickly some of those same corporations threw their temporary Olympic Sponsor tax concessions back into the pot when they generated a couple of days bad publicity, show us the list and let the public decide.
So think everyone's tax dealing should be made public - after all it is our money? So when you your own business you never tried to lower your tax liability?
Your job is to say to yourself on a job interview does the hiring manager likes me or not. If you aren't a particular manager's cup of tea, you haven't failed -- you've dodged a bullet.
Joined: Dec 22 2001 Posts: 17134 Location: Johannesberg, South Africa
JerryChicken wrote:Or simply have a government department who's sole job it is to expose those corporations who pay regular UK corporation tax and those who don't, its (or should be) public domain stuff, after all its our money they are salting away offshore.
A simple list of those that HMRC consider to be acting fairly and those who they consider not to be would suffice, and then we can all decide for ourselves whether or not we assist them in their skullduggery or use their rivals who are on the "fair" list, all it needs to be is HMRC's opinion and if they are wrong then the corporates can explain their positions, we're all grown-ups here.
We saw how quickly some of those same corporations threw their temporary Olympic Sponsor tax concessions back into the pot when they generated a couple of days bad publicity, show us the list and let the public decide.
you think an "honesty box" because that's all that is, is going to work get multinational corporations paying their worldwide taxes in the country they're due in? You might get something with those that rely on consumer business such as Amazon and Costa, but do you think it will really affect those that don't depend on public consumers?
Aside from that, is public opinion really the right judge of how correct multinational tax is? After all, we're jumping up and down about Starbucks paying less that Costa, without understanding the UK profits of both.
Richie wrote: Following what John Whiting says, perhaps the answer is to cancel Corporation tax completely, and make up on things that are less easily avoided - PAYE, National Insurance, business rates, VAT etc.
Not a good idea. VAT is a tax on the end consumer not (most) companies so it would be you and I that would pay it. PAYE ditto (although not me). National insurance - 'ees ditto; 'ers - a tax on jobs so less people get employed and those that do get part-time work. Business rates - another tax on jobs / enterprise. Much better to tax profits but in a different way to the present - something based on turnover / gross profits / proportion of profits deemed earned in the UK based on pro-rating UK/Global turnover/ etc.
Joined: Dec 22 2001 Posts: 17134 Location: Johannesberg, South Africa
Dally wrote:Not a good idea. VAT is a tax on the end consumer not (most) companies so it would be you and I that would pay it. PAYE ditto (although not me). National insurance - 'ees ditto; 'ers - a tax on jobs so less people get employed and those that do get part-time work. Business rates - another tax on jobs / enterprise. Much better to tax profits but in a different way to the present - something based on turnover / gross profits / proportion of profits deemed earned in the UK based on pro-rating UK/Global turnover/ etc.
We pay it as consumers anyway. If a cost goes up, whether it be a tax a commodity, people or parts, it just goes onto the cost line, profit added and there's your price.
Sal Paradise wrote: Perhaps all those clammering for higher taxes might think again, high taxes will just force those you are trying to catch into ever more devious ways of avoidance. 20% of something is better than 0% of anything
Perhaps all those clammering for benefit cuts might realise that lower benefits will just force those you are trying to catch into ever more devious ways of benefit fraud. Paying everyone £60 a week is better than everyone claiming £100 a week illegally.
Challenge Cup winners 2009 2010 2012 2019 League Leaders 2011 2016
Joined: Feb 20 2002 Posts: 1437 Location: Leigh, where else?
When will it dawn on people that these sovereign debts are unpayable?
Greece, Spain and Portugal are collapsing because they are trying to reduce the DEFICIT, not the ACTUAL DEBT! Osbourne and his croanies are trying to reduce our DEFICIT, not our ACTUAL DEBT!
Then add to this the fact that most of the population appear to be upto their eyeballs in debt with mortgages, credit cards etc.
Combine the two above with the endemic fraud throughout the financial system, centred in the City Of London. For example the LIBOR scandal, where the Bankster thieves were fraudulently manipulating the GLOBAL financial system for their own profit. Yet not one person has been prosecuted for their part in this conspiracy!
Neither Labour or The Lib-Cons offer real ideas or leadership, they just pander to The City at the expense of the masses. We get austerity, they get bailouts and immunity to criminal prosecution.
It's plain to see the current system will eventually implode, probably due to mass defaults of sovereign debt, with all the chaos that will ensue.
IMO the economic crisis can only be solved if -
1) people first understand where money comes from and the inherent flaws in the current debt based system we operate under.
2) Start investigating crimes in the City and start jailing the people found to be commiting fraud.
When will it dawn on people that these sovereign debts are unpayable?
Greece, Spain and Portugal are collapsing because they are trying to reduce the DEFICIT, not the ACTUAL DEBT! Osbourne and his croanies are trying to reduce our DEFICIT, not our ACTUAL DEBT!
Then add to this the fact that most of the population appear to be upto their eyeballs in debt with mortgages, credit cards etc.
Combine the two above with the endemic fraud throughout the financial system, centred in the City Of London. For example the LIBOR scandal, where the Bankster thieves were fraudulently manipulating the GLOBAL financial system for their own profit. Yet not one person has been prosecuted for their part in this conspiracy!
Neither Labour or The Lib-Cons offer real ideas or leadership, they just pander to The City at the expense of the masses. We get austerity, they get bailouts and immunity to criminal prosecution.
It's plain to see the current system will eventually implode, probably due to mass defaults of sovereign debt, with all the chaos that will ensue.
IMO the economic crisis can only be solved if -
1) people first understand where money comes from and the inherent flaws in the current debt based system we operate under.
2) Start investigating crimes in the City and start jailing the people found to be commiting fraud.
"If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln
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