[Closed] Can someone answer this? Would it solve our countries problems if they paid tax?

You can argue that multi-national X should pay more tax or we won't let them trade here etc... BUT multi-national X also employs n thousand UK people who will be made redundant if they shift away from the UK.

But the tax (or lack of it) is on PROFIT from their UK operations. So using the purely capitalist argument, they'd have to be mad to pull out of the UK

If ultimately they are answerable to the shareholders, I'd like to see that decision explained away at the AGM

[i]So... you made a decision to pull out of one of the worlds largest economies because they were going to actually make you pay their (already generous) corporation tax?[/i]

I'm sorry, but its the same baseless crap as the bankers saying they'll go elsewhere? Where exactly. They're here because they are making money. Full stop. They should therefore contribute. The same as the rest of us have too. It really is that simple!

TJ - tax based on turnover is a nonsense. You'd kill off what's left of manufacturing straight away.

I'd be looking at more incentives for companies to come here rather than harsher penalties, I'd rather pay a few quid more in tax and have our population in employment.

[i]You can argue that multi-national X should pay more tax or we won't let them trade here etc... BUT multi-national X also employs n thousand UK people who will be made redundant if they shift away from the UK.[/i]

so if every mcds in the uk shut nothing would fill the void ?

I'd challenge anyone to defend this as reasonable behavior by those perennial favourites Goldman Sachs:

[url= http://www.guardian.co.uk/business/2011/oct/11/goldman-sachs-interest-tax-avoidance?INTCMP=SRCH ]It stinks to high heaven![/url]

I'm sorry, but its the same baseless crap as the bankers saying they'll go elsewhere? Where exactly.

A country with a better business environment. Which could be anywhere, couldn't it?

They are here because they are making MORE money than if they were elsewhere. If that changes, because of taxation or something else, then they will leave.

£10m wow. In the Guardian too.

.......is that the same Guardian, part of Guardian Media Group, which paid ZERO corporation tax in 2008 and 2009 despite making over £300mm profit IN THE UK! How so? Via a shell company in Grand Caymen.

Definate predator, I await condemnation from Ed Miliband's office.

[b]its very simple[/b] - you stop them exporting the profits. Teh government writes the laws. if they export all the profits you tax on turnover or you sinmply tax on the profits made here

First three words show the naivety of the statement, sorry TJ but its very far from simple.

A country with a better business environment. Which could be anywhere, couldn't it?

Could be anywhere ? Really ? The banks could move their operations to the Solomon Islands ?

I guess taxation levels must be very high in the Solomon Islands, or at least higher than the UK.

'Cause otherwise Goldman Sachs would close their UK headquarters and move it to the Solomon Islands.

The UK has the sixth largest economy in the world. Despite what the banks would like you to believe, they are not doing us a favour by doing business here. In fact perhaps they should be reminded of the favours they owe us.

You can argue that multi-national X should pay more tax or we won't let them trade here etc... BUT multi-national X also employs n thousand UK people who will be made redundant if they shift away from the UK.

Re the claim they will leave...we are talking about taxing them on the profits they earn based here. It is an argument often put forward but in the 70's when we had much higher income tax for example we also had much higher employment ...it is a something that folk say but I am not all that convinced it will happen.
London will still be a hub of financial activity for Europe they wont all just get up and move to Lisbon because it is cheaper.
What TJ says is simpe but th eimplementation may be complex ..perhaps you could comment on the principle rathe rthna the difficulty?

Binners for PM some great gags on here Well done

In the Guardian too.

No it doesn't excuse their comy tie-in with Apax etc, if that's what you mean.

I'm bored of corporate BS. I work in the NHS, which the ConDems are trying to turn over to Crapita Healthcare, Inc (do your duty, House of Lords!) - including the likes of Circle, a nicely-timed [url= http://www.thebureauinvestigates.com/2011/06/05/private-healthcare-provider-to-go-public-despite-financial-woes/ ]hedge-fund backed venture[/url] that is styling itself as a cuddly 'social enterprise', FFS.

It seems they are all at it, Guardian, Goldman Sachs etc. There are obviously ways around these various loopholes that the government could introduce to make them pay tax although they are probably already in the pockets of these corporations anyway. If they did judging by the amounts not being paid (£6billion Vodaphone alone) it would sort out our countries debt in one go. Then we could afford decent investment in the countries infrastucture to cover some of the jobs lost by throwing (back to my earlier example) RBS etc out. Also if HSBC then decided to pay tax they would pick up RBS's customers, staff etc and we are all happy.
It's interesting seeing this debate from people who (sound like they) have more knowledge than me but no-one can alter the fact the working and middle classes are shat upon from a great height by whatever government is in power. Revolution anyone? 😈

2008 and 2009 despite making over £300mm profit IN THE UK!

I'm surprised that the Guardian Media Group has ever managed to make a £300mm profit, have you got a link for that ?.......all I can find is that they had a pre-tax loss of £89.8m in 2008-2009, in an article in their rival paper :

http://www.independent.co.uk/news/media/press/guardian-group-announces-pound90m-pretax-loss-1765735.html

I'm a bit dubious about that one too. The Guardian is some kind of weird Trust-based co-operative type set-up, so I'm sorry, but that just doesn't fit

And having worked for Guardian Media Group I'd also be amazed they ever turned a profit. Lentil-knitters are absolutely useless at Business. Mind you, I imagine Goldman Sachs execs aren't to clever at making friendship bracelets and poaching tofu

They don't actually make a whole lot of money on an annual basis that is true, is tough times for print media.

In 2008 they restructured the Scott Trust so that they didnt have to pay corporation tax or capital gains on the sale of Autotrader. Nothing illegal about tax avoidance but just because they havent done it for 3yrs doesnt mean they get to sit on their high horse and throw barbs at the rest of corporate Britain.

The Guardian is now basically a website with a newspaper attached. I think it's a great operation, I have CiF as my homepage. Could well cash in hugely from their growing online presense. I look forward to them sharing the profits in taxes.

We will emerge leaner from this process.

[img] [/img]

Sorry, just made me chuckle. 🙂

Goldman Sachs execs are too busy turning live bunny rabbits inside out and scraping away the insides with baby seals to poach a tofu (wtf is a tofu?)

tofu is a coagulated soya bean product made from curdled soya milk - like cheese but with no texture or flavour. I is beloved of the vegan elite who one day shall inherit the world ..it tastse of nothing unless you get that yummy basil infused one or the smoked version but that is very expensive.
Its an acquired taste IMHO

Oh. Not an animal then?

Sounds crap. It would be better if a Tofu was a comedy bird, with a big orange beak and blue feathers that went SQUAAAAAARK, and was delicious when poached.

Soooo...tax eh? Hmmm...

Tofu...tastse of nothing unless

...and add bacon

Then serve with beef gravy

and sausage

mcboo - Member

They don't actually make a whole lot of money on an annual basis that is true, is tough times for print media.

So they didn't make £300 million profit in 2008-2009........they made a loss ? Why did you say that they had ?

I was more surprised by that than the suggestion of legal tax avoidance.

It should be remembered that anyone who campaigns against legal tax avoidance is also campaigning for tax avoidance opportunities to be withdrawn from themselves - there's nothing hypothetical about that.

Of course in the case of Goldman Sachs we're not talking about legitimate tax avoidance, we're talking about a failed tax avoidance scheme. Which resulted in a secret deal, sealed with a handshake, whereby Goldman Sachs "let off" paying £10m in interest.

How do like that ..........a bank which doesn't like paying interest ?

there's nothing hypothetical about that.

😕 I don't know how "hypocritical" became "hypothetical"..... I blame poor education, or poor use of spellcheck, or just simple stupidity. Or a combination of all three.

So they didn't make £300 million profit in 2008-2009........they made a loss ? Why did you say that they had ?

They did. What are you talking about? They dont make much money selling newspapers but they made £300mm that year from an asset sale then took the cash offshore to avoid paying the tax. About £60mm.

It should be remembered that anyone who campaigns against legal tax avoidance is also campaigning for tax avoidance opportunities to be withdrawn from themselves

Yeh right.....in the meantime they hired a bunch of expensive lawyers to place the loot in Grand Caymen, where it remains. That is the very definition of hypocrisy.

Also worth remembering why tax is being avoided and how much choice a company has. If a company makes a profit, it is the duty of the board to maximise the return to shareholders. Voluntarily giving loads of it away to the taxman just isn't an option that can be taken when there are well proven legal ways to avoid doing so and retaining more value in the business or allowing bigger dividend.

They did. What are you talking about? They dont make much money selling newspapers but they made £300mm

I'm talking about you not providing a link showing that the Guardian Media Group made £300 million on 2007/8 ....... that's what I'm talking about. Pardon me for not "just believing you".

That is the very definition of hypocrisy.

No it isn't. How is expecting Goldman Sachs to comply with legal requirements "hypocrisy" ? Prove that the Guardian Media Group has operated a failed tax avoidance scheme, been highly obstructive, and been "let off" £10 million in interest to HM Revenue and Customs. Then we'll talk about hypocrisy.

The Guardian were right to publish the article exposing Goldman Sachs failed tax avoidance scheme and how a secret deal was done. There is nothing hypocritical about it.

I'm no great fan of the Guardian when it comes to ethics, it is often imo very hypocritical in the stances that it takes. But I restrict may accusations of hypocrisy to occasions where there is some evidence, not willy-nilly 'cause I don't like the paper. The reporting of the Goldman Sachs story is an example of excellent journalism, not hypocrisy.

I'm talking about you not providing a link showing that the Guardian Media Group made £300 million on 2007/8 ....... that's what I'm talking about. Pardon me for not "just believing you".

http://www.guardian.co.uk/media/2008/jul/30/guardianmediagroup.pressandpublishing

News
Media
Guardian Media Group
Guardian Media Group profits top £300m after Auto Trader sale

reddit this
Stephen Brook and Richard Wray
The Guardian, Wednesday 30 July 2008
Article history
Guardian Media Group, owner of the Guardian, saw its annual profits boosted dramatically by the sale of a 49.9% stake in the owner of Auto Trader, but warned that uncertainty in the UK economy will hit revenues in the coming year.

In its annual report GMG, owned by the Scott Trust, created in 1936 to secure the Guardian's financial and editorial independence, said pre-tax profits rose to £306.4m in the year to end March, compared with £97.7m the previous year.

Nice background article here...
http://www.newsnetscotland.com/index.php/scottish-opinion/3409-the-places-and-people-who-help-barclays-minimize-its-taxes.html

So mcboo, they didn't make a £300 million on 2008-2009 then ? You're talking about when Guardian Media Group was still owned by the Scott Trust, and after they had sold off 50% of Auto Trader. The article in the Independent was correct - in 2008-2009 GMG made a loss of £90 million. I take it that explains your strange reluctance to provide a link straight way, ie, you realised that you had referred to the wrong period.

So, nothing wrong with any of that - although as I have previously said it does come as a surprise that the Guardian Media Group has ever managed to make £300 million in any one financial year.

Have you now got any evidence to back up your claim that the Guardian Media Group has behaved the same way as it accuses Goldman Sachs of behaving ? Which is the basis of your criticism of them publishing the article and your allegations of hypocrisy.

I am mentally drafting a letter to the Guardian in anticipation of your evidence.

Hey Ernie....you know that saying about when you are in a hole? Put your shovel away, I've been to university and everything....

So you clearly haven't any evidence then mcboo ? Not a shred of evidence to back up your claims that the Guardian is guilty of the same wrongdoing as it accuses Goldman Sachs of ? Nothing to back up your allegations of "hypocrisy" ? It was all just complete bollox ?

I can't say that I'm surprised - I'll ditched that letter of outrage to the Guardian then.

What's university like ?

Mate, do a quick search, this story has been running for 3 years. Alan Rustbriger even went to the extent of writing an article for the paper setting out how GMG hadnt done anything illegal. He's right, they hadnt but what they had done is set up a shell company in Grand Cayman with Apax Partners (Evil Private Equity shysters), wound up the Scott Trust and re-structured it as Scott Trust Limited. Result they avoided £60mm in capital gains.

Nothing at all illegal, the point being it's very similar to what Barclays were doing at the time when they paid very little tax in that year. The Guardian were gunning for Barclays until it was pointed out that they were doing the same as Barclays. Cue much shuffling and staring at shoes......

thing is, lets say we find a way to tax vodafone on 10% of all the money they make. Who do you think would pay the bill? Their shareholders, or their customers?? I suspect it'd be the latter

so what you are saying taht becausthey are tottaly selfish greedy amoral bastards with no sense of social responsibility we should just ignore them?

I doubt the Guardian was running scams like setting up a front company in a tax haven, then saying that all the staff had been 'seconded' to that arm of the company, so they wouldn't have to pay any tax or NI on they're *ing great big, whopping and obscene bonuses!

Which is exactly what Goldman Sachs were up to. And which was subsequently ruled illegal. Yet they still fought it every step of the way, and still never paid they're full wack of tax.

Same as Vodaphone, and probably countless others we don't know about

I can't believe that you're that moronic as to defend that position!
You do realise the concept of taxation, don't you? Because they're not paying, it means we have too.

And that makes my *ing dick itch!!!!

TandemJeremy - Member
tax on turnover not profits if you want

If they are attempting to hide profits overseas. fuzzy - basically don't let teem getaway with it. Make a profit here, pay a fair tax on it. turnover is much harder to hide

I am waiting for some of these large companies to come together and launch a satellite which they will define as their 'base' at a tax rate of 0%. Then move all profits to that haven and export all losses to any country which will minimize any tax they have.

That's one thing I would ban - moving your losses to the best place for tax purposes. Plain greed.

And what binners said.

*awaits right-wingers to turn up and cry "Will nobody think of the children!?"*

I can't believe that you're that moronic as to defend that position!

It's the duty of every right-winger to defend the indefensible. Hence his automatic defence of greedy financial institutions who like to charge their customers interest, but not pay interest on money due themselves.

There is no apparent comparison between the behaviour of the Guardian and the behaviour of Goldman Sachs. The "mate, do a quick search" suggestion by mcboo, proves he cannot provide the evidence - if all that it required was a "quick" search, then he would do it himself, he certainly appears enough time on his hands to argue the toss.

Criticism of the Guardian by mcboo appears not to be based on fact, but as is so often the case on here, more motivated by a deep and widespread general hostility towards the Guardian. The Guardian's pseudo-left stance undoubtedly conflicts seriously with mcboo's farcical right-wing agenda. Therefore the need to make unsubstantiated allegations against the Guardian.

Re Guardian - if a company had owned 49.9% of Autotrader it wouldn't have been taxable (as companies selling subsidiaries/ joint ventures generally don't pay tax on the gain, nor do they get tax relief if they sell at a loss). My guess would be that GMG owned Autotrader via something that wasn't a company, and did something to get the same treatment on the sale of their interest in Autotrader that a company would normally get. Trust law is similar to company law in that the trustees have a statutory duty to protect the assets of the trust, and paying more tax than necessary won't cover that. And consider who wrote trust law - yes, it's back to the Government.

I do like the suggestion that a company can just send it's income offshore at will - simple fact is, it can't be done at the drop of a hat. The UK has reasonably "high walls" around its tax system so income earned here will pretty much definitely taxable here. There are all sorts of laws that stop you blatantly declaring income earned in the UK abroad.

For a start there are international rules on transfer pricing (the prices companies pay each other for goods and services) that ensure companies in the same group pay third party prices for things (so subsidiary one can't sell subsidiary two something on the cheap to move profits around).

There are also rules on "controlled foreign companies" that mean a UK company with subsidiaries outside the UK has to demonstrate they have a real business there - if it can't, the company's profits are deemed to have been paid up to the UK parent and taxed at a punitive rate.

That said, it's not perfect and some things are easier to do than others (or more worthwhile). For example transferring intellectual property (patents and copyright for example) to Luxembourg where income from such income is taxable at a low rate. By paying the Lux company a royalty for use of its IP (so you have a tax deductible expense in the UK and income taxable at a lower rate in Luxembourg) you move profits and save tax. BUT you might well find you have to pay some tax upfront on the value of the IP when it leaves the UK, which will conveniently not be mentioned by critics.

Most of the companies that have gone offshore in recent years (WPP and Shires for example) are UK headquartered, but only have a small part of their business in the UK. It simply doesn't make sense for a predominantly UK company to move its tax residence offshore as it will still pay a lot of UK tax.

you move profits and save tax. BUT you might well find you have to pay some tax upfront on the value of the IP when it leaves the UK, which will conveniently not be mentioned by critics.

Thanks for cropping that there, really helpful. I am making the point that to send assets out of the UK tax system, you often have to pay an "exit charge" based on the value of the asset when it is moved.

So say I had a patent owned by a UK company and it's worth £0.5m and I want to transfer it to Luxembourg, I will probably pay tax on at least part of the £0.5m when it leaves the UK. I will then pay Luxembourg tax instead of UK tax on the income it generates.

So it's not a massive tax-saving scam - it's an up-front cost in the UK for lower tax in future.

And there are risks in doing this - for example the UK rate might come down (as it is doing - heading for 23%) and the special Lux rate could well go up or be abolished, so overall it is a possibility I could end up worse off.

Stu - I'll lend you a fiver if things get rough. 😉

Do as I say not as I do ?

http://www.guardian.co.uk/help/insideguardian/2008/mar/06/isgoingoffshoregoingoffme

<sniff> <sniff>