Google Defends Tax Avoidance

[Gone baby gone]

And if a company made a loss (I'm assuming you understand the difference between turnover and profit)?

They would still have to pay it... that's the point.

[Traktion]

Oh dear, he has set himself up for a fall. This is no longer about money, it is about sovereignty. Who shall be the master and who the servant. This man thinks himself a master of nations. China had the right idea, play hard ball. Either you do it our way or we pull your operating licence. Telling the US and UK to go f*** yourself was not a smart move. The big shareholders are also big shareholders of other corporates, they are part of the system. They don't like loose canons like this man, they will be looking to appease the authorities.

I would rather have no master, thanks.

If there was a choice between thieves and traders, I'd pick the latter every time.

[easy2012]

And if a company made a loss (I'm assuming you understand the difference between turnover and profit)?

Just exactly like vat...

[winkie]

A 1% tax on turnover would solve all these problems, save companies millions in Tax Planning, and allow small businesses to plan tax on a daily basis.

There is no good reason not to introduce it.

I buy and sell Rolls-Royces, but only make £100 on each sale......my turnover is £50,000 a week, profit is £500 a week.

[Gone baby gone]

I buy and sell Rolls-Royces, but only make £100 on each sale......my turnover is £50,000 a week, profit is £500 a week.

Is your parent company registered in Luxembourg by any chance?

[easy2012]

I buy and sell Rolls-Royces, but only make £100 on each sale......my turnover is £50,000 a week, profit is £500 a week.

the state will say hand over the

500 or we will bankrupt you..we accept no excuses and we have bailiff on stanby

[Injin]

the state will say hand over the

500 or we will bankrupt you..we accept no excuses and we have bailiff on stanby

Great.

The state will wind up with £500, minus the court and bailiffs fees.

[Guest_GradualCringe_*]

Just exactly like vat...

Almost the same, the only difference between this suggestion and VAT, is that if a company's VAT chargeable expenses, exceed their VAT chargeable turnover, then the VAT claimed back from HMRC will exceed the duty paid.

For example (a very simple example) if a company buy 100 items at £20 (inclusive of £2 VAT at 20%), and can only sell them for £18 (inclusive of £1.80 VAT at 20%), such that expenses for the year are £2000, and turnover for the year is £1800, then £400 can be claimed back in VAT, and only £360 in duty paid (leaving a net of £40 in the company's favour).

A flat turnover tax would be absolutely ruinous, firstly it would turn a loss making year for a company/individual into a complete disaster (think of new companies contending with startup costs), and secondly, and here's the sublime failing of such a thing, mandate a minimum profit margin for all companies lest HMRC push them into a loss or zero profit e.g. a 5% turnover tax would mean that a company would have to make a minimum of 5% profit, or have to face owing the government money.

Edited December 13, 2012 by GradualCringe

[Senny Pijama]

And if a company made a loss (I'm assuming you understand the difference between turnover and profit)?

Of course I understand - that's the bloody point!

It is companies making 'losses' that is causing the problem in the first place.

[Guest_GradualCringe_*]

Of course I understand - that's the bloody point!

It is companies making 'losses' that is causing the problem in the first place.

As I said before:

A flat turnover tax would be absolutely ruinous, firstly it would turn a loss making year for a company/individual into a complete disaster (think of new companies contending with startup costs), and secondly, and here's the sublime failing of such a thing, mandate a minimum profit margin for all companies lest HMRC push them into a loss or zero profit e.g. a 5% turnover tax would mean that a company would have to make a minimum of 5% profit, or have to face owing the government money.

If you want to bring business to a halt in this country, this is the way to do it, the failing of your suggestion is that it cannot tell the difference between profit, loss, and transfer pricing.

There's no such thing as a quick fix for tax legislation, hence the fact that we now have 11,000+ pages of such sillyness. It would be easier to not bother at all.

Edited December 13, 2012 by GradualCringe

[The Eagle]

Nobody seems to notice the elephant in the room.

Who owns Bermuda (just like most other tax havens such as the Channel Islands, BVI, Cayman, etc...)?

Well, I guess you all know who, that family living in Buckingham Palace calling themselves the 'royal family'.

If they wanted they could shut down these tax paradises ensuring that global corporations would be forced to pay their fair share of taxes in the countries where they generate their profits.

[easy2012]

Great.

The state will wind up with £500, minus the court and bailiffs fees.

That would then be £500 + the fees.

Often, it is as much about setting an example then to collect the money.

[Gone baby gone]

As I said before:

You could simply levy it on companies that have been trading for over 3 years. If they are still making a loss after 3 years either they are avoiding tax (the targets) or they haven't really got a business anyway, and should probably reform as an association, a charity, etc.

[easy2012]

Almost the same, the only difference between this suggestion and VAT, is that if a company's VAT chargeable expenses, exceed their VAT chargeable turnover, then the VAT claimed back from HMRC will exceed the duty paid.

For example (a very simple example) if a company buy 100 items at £20 (inclusive of £2 VAT at 20%), and can only sell them for £18 (inclusive of £1.80 VAT at 20%), such that expenses for the year are £2000, and turnover for the year is £1800, then £400 can be claimed back in VAT, and only £360 in duty paid (leaving a net of £40 in the company's favour).

A flat turnover tax would be absolutely ruinous, firstly it would turn a loss making year for a company/individual into a complete disaster (think of new companies contending with startup costs), and secondly, and here's the sublime failing of such a thing, mandate a minimum profit margin for all companies lest HMRC push them into a loss or zero profit e.g. a 5% turnover tax would mean that a company would have to make a minimum of 5% profit, or have to face owing the government money.

Company obviously just pass the margin on...just like when credit card companies charges the company, they pass it on.

No - they won't end up owning government money - they just refuse to sell.

But I agree - it is just very hard to tax giant corporation who are determined to move profit elsewhere - that is why government try to get something back via VAT and Employer NI.

[Guest_GradualCringe_*]

You could simply levy it on companies that have been trading for over 3 years. If they are still making a loss after 3 years either they are avoiding tax (the targets) or they haven't really got a business anyway, and should probably reform as an association, a charity, etc.

And what about companies trading at a loss? Is it really fair for HMRC to push them further into the mire? It might just have been a bad year, or a year of heavy re-investment in the business including some borrowing, in order to keep up with competitiors? I think in this case, what will start as a simple tax plan, will eventually morph into a similar version of the 11,000 page tax code nightmare as deficiencies and loop holes are addressed.

[Gone baby gone]

And what about companies trading at a loss? Is it really fair for HMRC to push them further into the mire? It might just have been a bad year, or a year of heavy re-investment in the business including some borrowing, in order to keep up with competitiors? I think in this case, what will start as a simple tax plan, will eventually morph into a similar version of the 11,000 page tax code nightmare as deficiencies and loop holes are addressed.

Trading at a loss for three years? Maybe they could offset the tax against future profit - and if no profit is forthcoming, then they get closed down.

An economy comprised of zombie companies and companies that don't pay corporation tax isn't really helpful.

Oh, and one of the reasons the tax code is so complex is to catch out sneaky f*ckers who do things like Google to avoid paying tax. As I said earlier, the minute we bailed out the banks, capitalism was on notice. It's gone, we have a mish mash of socialism and corporatism now, so let's get to work!

[Guest_GradualCringe_*]

Trading at a loss for three years? Maybe they could offset the tax against future profit - and if no profit is forthcoming, then they get closed down.

An economy comprised of zombie companies and companies that don't pay corporation tax isn't really helpful.

Oh, and one of the reasons the tax code is so complex is to catch out sneaky f*ckers who do things like Google to avoid paying tax. As I said earlier, the minute we bailed out the banks, capitalism was on notice. It's gone, we have a mish mash of socialism and corporatism now, so let's get to work!

It is possible to trade for a few years successfully and then have a bad year, this is just additional punishment for a mistake a company will pay for immediately. Interestingly that' s two amendments already on top of what was a single point, simple, tax plan. The government have incrementally been doing the same thing for a long time now.

Are you saying you want more socialism and coporatism?

[Gone baby gone]

Are you saying you want more socialism and coporatism?

No, I'm saying that's what we are getting - a hybrid, with the worst points of both, the best points of neither.

[Gone baby gone]

It is possible to trade for a few years successfully and then have a bad year, this is just additional punishment for a mistake a company will pay for immediately. Interestingly that' s two amendments already on top of what was a single point, simple, tax plan. The government have incrementally been doing the same thing for a long time now.

I run a small business (and have done since 1997), but even in the bad years, I've made a profit. Just a much smaller one. Plus, do these businesses not keep some money aside? Are they so poorly run that one year of poor trading would bankrupt them? Maybe they need to start retaining some profits in the good times.

When a business has high turnover and low or no profit for prolonged periods, it's a sign something is wrong. Wrong with the books, or wrong with the business fundamentals. I'd say keep it simple, just tax on turnover, the flat rate VAT scheme already exists and operates in a similar vein.

[Britney's Piers]

I think the objection is that they are gaining huge market share with the ability to pay hardly any tax. Give UK businesses the same opportunity and see how we'd do. If we don't change the law then we can all expect to have a poorer future.

The government will never move on google, and small business getting to pay 2% like the big competition, only in your wildest dreams.

The Googles and the government work hand in glove on this, the back and forth between them is just professional show wrestling. This IS the "corporatism" that everybody talks about.

Edited December 13, 2012 by Britney's Piers

[porca misèria]

I believe I said free *at the point of use*

Its 'free' in the same way the NHS is 'free'.

Not in the same way at all.

Google is not only free at the point of use, but also available when I need it. The NHS has gatekeepers that make it unavailable at your time of real need (unless you happen to be lucky).

Furthermore, Google isn't being funded by money taken from us by force.

[porca misèria]

I think you'll find that many would - certainly those in sales, advertising and marketing.

I've actually been paid real money (yes, physical cash) for giving away a fraction of the personal information that you give google.

Why do you give google any personal information at all?

If you do, it's your choice, and must mean you actively signed up for some service. Nothing to do with the free search service at the heart of Google's business, nor any other manifestation you might encounter by visiting websites (like housepricecrash.co.uk) that use google's services.

[porca misèria]

You could simply levy it on companies that have been trading for over 3 years. If they are still making a loss after 3 years either they are avoiding tax (the targets) or they haven't really got a business anyway, and should probably reform as an association, a charity, etc.

Good for low-value support businesses, but drive out anything high-value involving major investment: for example any high-tech research or manufacturing facility or infrastructure project.

What happens to your army of self-employed hairdressers, plumbers, shopkeepers, etc, when the infrastructure crumbles around them?

[Gone baby gone]

Good for low-value support businesses, but drive out anything high-value involving major investment: for example any high-tech research or manufacturing facility or infrastructure project.

Please note: Turnover is not the same as spending. Anyone who wants to invest a load of money to build a factory would most likely set up a new company (that wasn't making any sales) and use that to do it. In many cases they probably do this already.

Surely infrastructure projects generally make money for the companies involved in them, it's the government who makes the initial loss?

If this meant an end to PFI. So much the better!

[sleepwello'nights]

I run a small business (and have done since 1997), but even in the bad years, I've made a profit. Just a much smaller one. Plus, do these businesses not keep some money aside? Are they so poorly run that one year of poor trading would bankrupt them? Maybe they need to start retaining some profits in the good times.

I don't think it is as simple as you have found. Lots of businesses start well and develop into profitable ventures for a while. Then something changes and the business or its owners are unable to adapt. I know of a local TV repair company that diversified into repairing computer monitors when the demand for repairing TVs died because it was cheaper to throw a defective TV away and purchase a new one. Unfortunately the computer monitor market has gone the same way.

The owner is just as skilled but older and less employable. Not only that the electronics manufacturing sector has off shored most of its production facilities and the model of repair and fix has changed to throw away and replace.

If so much wasn't paid out in taxes perhaps the owners would be able to retain more profits in the good times and would be less dependent on government largesse when the good times were stifled.