Amazon-£7Bn Sales, No Uk Corporation Tax

[JPJPJP]

put the tax rates down to a level that attracts corp HQs here

- all those high paid jobs paying income tax, NI and then spending money here (instead of Lux / CH)

- bit of corp tax too

If UK doesn't do it soon, then it won't have a good infrastructure to do it even if tax rates went to 0

[MarkG]

If UK doesn't do it soon, then it won't have a good infrastructure to do it even if tax rates went to 0

Britain is screwed in no small part because it's full of idiots who think that corporations paying more tax will result in them paying less. In reality, if Amazon UK had to pay more tax, they would increase prices so their customers have to pay more; Amazon then becomes just a conduit to pick the pockets of ordinary Britons and hand the money to useless wasters in the government.

As you say, if you really want to increase the amount of tax you collect, you should cut corporate tax to zero and collect all that income tax, NI and VAT from the highly-paid jobs at the corporate HQs which would move there. But the idiot left only care about screwing over corporations, so it will never happen and few corporations would trust future governments not to do a bait-and-switch if it did.

[Saving For a Space Ship]

Britain is screwed in no small part because it's full of idiots who think that corporations paying more tax will result in them paying less. In reality, if Amazon UK had to pay more tax, they would increase prices so their customers have to pay more; Amazon then becomes just a conduit to pick the pockets of ordinary Britons and hand the money to useless wasters in the government.

As you say, if you really want to increase the amount of tax you collect, you should cut corporate tax to zero and collect all that income tax, NI and VAT from the highly-paid jobs at the corporate HQs which would move there. But the idiot left only care about screwing over corporations, so it will never happen and few corporations would trust future governments not to do a bait-and-switch if it did.

Businesses charge the maximum prices the market will allow, they do not drop their prices because they are paying lower taxes.

Edited April 7, 2012 by Saving For a Space Ship

[MarkG]

Businesses charge the maximum prices the market will allow, they do not drop their prices because they are paying lower taxes.

Yes, you're right. Companies will never, ever raise prices just because they're suddenly forced to hand over 25% of their profits to the government. How could I have been so stupid?

[JPJPJP]

corporates are smart enough to work on the total tax burden, not just focus on corporation tax

and bosses are wise enough to realise their staff want a nice place to live and work

The UK has a real chance, for now, to reduce the total tax burden on companies and entice those that are considering tax efficient options to come here (or not to leave here).

I say again, if the infrastructure deteriorates much more, that chance will be much lower.

FWIW on rates, I would go for 11% corp tax, 40% total employment tax (employer + employee) on anything over the first £12k (which would be fully tax free).

Would it work? Probably with a bit of tweaking.

[Saving For a Space Ship]

Yes, you're right. Companies will never, ever raise prices just because they're suddenly forced to hand over 25% of their profits to the government. How could I have been so stupid?

It's not that simple though. Often, the market will not stand a large increase in price, particularly in these hard times, and with the many luxury goods that Amazon sells. So the hit is taken in sellers profits or having to cut costs.

How often have we heard the BTL lobby say that taxing BTL will force them to raise rents. Do rents always go up ?

Edited April 7, 2012 by Saving For a Space Ship

[leigh delamere]

put the tax rates down to a level that attracts corp HQs here

- all those high paid jobs paying income tax, NI and then spending money here (instead of Lux / CH)

- bit of corp tax too

That strategy hasn't worked out so well for Ireland has it?

[leigh delamere]

As you say, if you really want to increase the amount of tax you collect, you should cut corporate tax to zero and collect all that income tax, NI and VAT from the highly-paid jobs at the corporate HQs which would move there. But the idiot left only care about screwing over corporations, so it will never happen and few corporations would trust future governments not to do a bait-and-switch if it did.

Amazon still have a nice corporate HQ here in Slough, as well as the large distribution centre in Bedfordshire. I visited it last year, and it is full of bright-eyed young execs who get to enjoy the many facilities which include a canteen/meeting room complete with Playstation/Wii etc.

The tax avoidance schemes employed by the likes of Amazon, Burger King, Boots The Chemist etc. often mean that the location where the profit is deemed by the company to have been created is nothing more than a PO Box.

Like the VAT loophole exploited by Amazon until last week (where they could not charge VAT on items valued at £18 or lower when sent from the Channel islands and thereby undercut smaller businesses that could not afford to set up similar offshore operations)

these tax avoidance options are not available to the vast majority of medium, small, micro businesses, so you have the absurd situation where a business like mine, with a turnover of less than £1m pays more Corporation Tax than Amazon.

[BalancedBear]

The VAT exemption has only been scrapped for goods send from the channel islands though. I suspect it will not be long before other jurisdictions are found.

[erranta]

Britain is screwed in no small part because it's full of idiots who think that corporations paying more tax will result in them paying less. In reality, if Amazon UK had to pay more tax, they would increase prices so their customers have to pay more; Amazon then becomes just a conduit to pick the pockets of ordinary Britons and hand the money to useless wasters in the government.

As you say, if you really want to increase the amount of tax you collect, you should cut corporate tax to zero and collect all that income tax, NI and VAT from the highly-paid jobs at the corporate HQs which would move there. But the idiot left only care about screwing over corporations, so it will never happen and few corporations would trust future governments not to do a bait-and-switch if it did.

Yes and No

- why is the hint of discussion of shareholders-owners getting less never ever discussed or mentioned?

- they (or their 'lobbied' lackeys) are in charge & game the whole system to suit their Globalist mood

(reason why all party 'career' politicians just ignore whats going on by Big Business)

[bankfeeder]

I have the same question as MarkG - why the desperate scrabble to get companies to pay more tax?

The idea that that would in some way be tradable with "reducing benefits for the poor" seems very odd to me. Isn't it a good idea to move back from a benefit culture anyway? And a good idea to reduce the power of the dead hand of the state?

European governments (apart from Luxembourg it seems) are already sclerotic from their diet of rich tax take, and the UK has joined in with the guzzle, especially over the last decade or two.

The trend for feeble minded emotions to make their way into mainstream 'thinking' is clear. The Chancellor says that he finds tax evasion 'immoral' when it has always clearly been the moral duty of all tax payers (individual and corporate) to pay only the amount required by the law and no more.

[Sir Harold m]

....the final straw.....the pasty tax.....people can only take so much, the ones with the least end up paying the most, even down to taxing the food out of their mouths.

But the ones with the least almost certainly would not have paid for it. It would have been paid for by money given to them so they've paid nothing at all.

[bankfeeder]

It's not that simple though. Often, the market will not stand a large increase in price, particularly in these hard times,

Quite right. Which means no more sales when prices increase. If you read the article, the profit margin is only 3%, so prices would have to increase.

[gadget]

Quite right. Which means no more sales when prices increase. If you read the article, the profit margin is only 3%, so prices would have to increase.

We're talking about a tax on profit not revenue. The margin may go to 2% rather than 3% but if amazon could have more profit and growth charging more it already would be.

I'm constantly surprised by the support of corporate welfare by people here.

[bankfeeder]

I'm constantly surprised by the support of corporate welfare by people here.

I'm no longer surprised by the nasal "It's not fair!" cries whenever a company or an individual makes progress.

[bobjack]

I've been working in an Amazon distribution center for the last couple of years and this is the first time that I've heard that customers don't directly place orders with us.

Like a lot of companies, there's a lot of focus on customer satisfaction - we're told our aim is to be the most customer focused company. Gullible old me assumed that the customer was the consumer in the UK placing an order. I suppose it makes sense that our only customer is actually a corporation in Luxembourg where all the profit is sent.

[ParticleMan]

I've been working in an Amazon distribution center for the last couple of years and this is the first time that I've heard that customers don't directly place orders with us.

Start theivin' now and don't look back.

What's Luxembourg going to do - send an army?

[bankfeeder]

I suppose it makes sense that our only customer is actually a corporation in Luxembourg where all the profit is sent.

Eh?

Perhaps it's best that the thinking is left to those in Luxembourg after all.

As an Amazon customer in the UK or France, the end result works for me.

[easy2012]

Amazon still have a nice corporate HQ here in Slough, as well as the large distribution centre in Bedfordshire. I visited it last year, and it is full of bright-eyed young execs who get to enjoy the many facilities which include a canteen/meeting room complete with Playstation/Wii etc.

The tax avoidance schemes employed by the likes of Amazon, Burger King, Boots The Chemist etc. often mean that the location where the profit is deemed by the company to have been created is nothing more than a PO Box.

Like the VAT loophole exploited by Amazon until last week (where they could not charge VAT on items valued at £18 or lower when sent from the Channel islands and thereby undercut smaller businesses that could not afford to set up similar offshore operations)

these tax avoidance options are not available to the vast majority of medium, small, micro businesses, so you have the absurd situation where a business like mine, with a turnover of less than £1m pays more Corporation Tax than Amazon.

Here we go..

Apparently there is a plan to route Jersey mail via Belgium and Germany and then into the UK and claim freedom of open circulation for mail and then add to it a right to LVCR – even though the point of origin will clearly be Jersey from where LVCR is now banned.

[bobjack]

Eh?

Perhaps it's best that the thinking is left to those in Luxembourg after all.

As an Amazon customer in the UK or France, the end result works for me.

Ouch, I didn't expect such a negative reaction from my lighthearted first post.

After reading the article I got the impression that when you buy off Amazon you're buying from Amazon EU Sarl. Amazon UE Sarl pay Amazon.co.uk to fulfill the order and Amazon.co.uk will pay Royal Mail, etc to deliver from their warehouses to you.

So (individual buying a book) is the customer of (Amazon EU Sarl) is the customer of (Amazon.co.uk) is the (customer of Royal Mail). I.e. as a consumer in the UK you're no more Amazon.co.uk's customer as you are Royal mail's in as much as you don't directly pay them for anything and theoretically Amazon EU Sarl could fulfill your order without using Amazon.co.uk or Royal Mail.

I'm not sure where I've gone wrong if you see fuzzy thinking here.

[bankfeeder]

Ouch, I didn't expect such a negative reaction from my lighthearted first post.

After reading the article I got the impression that when you buy off Amazon you're buying from Amazon EU Sarl. Amazon UE Sarl pay Amazon.co.uk to fulfill the order and Amazon.co.uk will pay Royal Mail, etc to deliver from their warehouses to you.

So (individual buying a book) is the customer of (Amazon EU Sarl) is the customer of (Amazon.co.uk) is the (customer of Royal Mail). I.e. as a consumer in the UK you're no more Amazon.co.uk's customer as you are Royal mail's in as much as you don't directly pay them for anything and theoretically Amazon EU Sarl could fulfill your order without using Amazon.co.uk or Royal Mail.

I'm not sure where I've gone wrong if you see fuzzy thinking here.

No, I am buying from amazon.co.uk or amazon.fr. How this is organised behind the scenes is totally irrelevant to me as a customer, and fortunately the people managing amazon seem to understand that very well indeed and don't bother me with it.

Amazon (as opposed to my local council, or many local bookshops) is a service I value because it seems to be concerned about me as a customer more than itself as an organisation or its employees' opinions about this and that.

[the shaping machine]

I'm not sure where I've gone wrong if you see fuzzy thinking here.

If I buy something by mail order from a company in Wales (and I'm in England), should the Welsh company also have to pay English business rates?

If not, why is Amazon a special case?

(Sounds like the usual Guardian logic void to me.)

[leigh delamere]

No, I am buying from amazon.co.uk or amazon.fr

No you're not! - look on one of your receipts or emails.

As we have laws in this country that impose Corporation Tax on profits it is surely not beyond the capabilities of HMRC to judge where the profits are being made i.e. where the value is added?

As it is, Amazon are under investigation for these accounting methods...we shall see.

[bankfeeder]

No you're not! - look on one of your receipts or emails.

As we have laws in this country that impose Corporation Tax on profits it is surely not beyond the capabilities of HMRC to judge where the profits are being made i.e. where the value is added?

As it is, Amazon are under investigation for these accounting methods...we shall see.

Well, quite right.

As any fule kno, there is a beast you tackle as an exporter called Transfer Pricing. Companies like Amazon will be in this type of discussion with Tax Authorities all the time.

I personally hope that they get away with as much as possible, because I regard the increasing tax take of European governments (including GB, of course) as sunk funds. The best outcomes will come from lower tax takes. And I like Amazon.

I had spotted the thing on emails, and admit that I was being deliberately obtuse to make a point.

[leigh delamere]

I personally hope that they get away with as much as possible, because I regard the increasing tax take of European governments (including GB, of course) as sunk funds. The best outcomes will come from lower tax takes. And I like Amazon.

I hope they are made to abide by the same rules as everyone else.

I regard large cash balances on corporate Balance Sheets as sunk funds.