Tax dodging is not only limited to the UK

[ahinton]

and falling.
Looks like an agenda to get it to the point where its not worth collecting, and then abolish it.

That could well be the case and phasing it out by the back door might be less controversial than abolishing it completely as of now, but the more its rate reduces and/or the more exemptions, allowances and other concessions that are put in place, the more competitive Britain will become for foreign companies and, if that happens, the take from other taxes is likely to increase, probably to levels that might wipe out losses arising from those corporation tax reductions. It is one of the more absurd taxes; a company pays corporation tax on its net profits but also pays taxes to employ people who in turn pay two lots of taxes on their earnings, in most cases via PAYE under systems funded by the employer. It's not quite so punitive as France under Hollande, but it's bad enough!

That said (and I realise that we're principally considering corporation tax here), the complexities, inefficiencies and errors that our already overbearingly complex tax system undoubtedly encourages reached a new (albeit otherwise unimportant) nadir chez moi during the past week. On several recent occasions I have had cause to call HMRC and have been amazed at being able to get through within less than 30 seconds on each such occasion, which is a massive improvement on past experience. On two such occasions, however, HMRC assured me that I had paid my previous year's income tax in full, which one might argue was technically true, except only to the extent that I'd paid nothing at all because I had no liability for that year. I suppose that I should have told them this straight away but instead I asked them how much I'd paid and, to my surprise, was given a figure. I reminded them at that point that this did not concur with the paperwork that they'd supplied to me which shows clearly that there was no liability and that I was unaware of having nevertheless made a payment in error. For some time, they insisted that I did have a liability and had met it in full, so I asked them to write to me about this. A full two days later, I received a phone call from HMRC apologising for their error. I asked if they could tell me how it came about; they responded that, other than assuring me that there had been an error and it was entirely down to them, they could make no further comment. At that point, I accepted their apology and dropped the matter since, like most of us, i have better things to do with my time than discuss with HMRC things that have never happened. I suppose that this might be regarded as a case of non-avoidance of no tax...

[mercia]

sorry, I haven't read all the previous posts, and my small brain is trying to understand

I assume that even though google aren't paying much UK corporation tax on what the public accounts committee argues are UK sales [but which google argues are not], they are paying Irish corporation tax [at a favourable rate] - i.e. they are paying corporation tax on their sales to somebody (is this correct ? )

if, in the fullness of time, the tax laws are changed, or at least the committee wins the argument, google would presumably leave Ireland and the Irish exchequer would lose out on all those tax receipts [at a time when their economy could probably do with them]

[teamsaint]

Not really. They use Ireland as a channel to get money to real tax havens, and buy off the Irish government with a couple of thousand jobs and some investment. They play close to no corporation tax anywhere.

http://www.irishtimes.com/business/economy/ireland/google-defends-low-tax-payment-1.2003

[mercia]

They play close to no corporation tax anywhere.

oh I see, thanks, I hadn't realised that
it rather begs the question in my mind why more companies don't try to avoid paying corporation tax if it's that easy, or are google's tax advisers cleverer than anybody elses [or simply more immoral]

[scottycelt]

<Google’s tax reduction method takes advantage of Irish tax law to legally move profits in and out of subsidiaries in Ireland, eventually lodging them in Bermuda, which levies no corporate income taxes.

“We have an obligation to our shareholders to run our business efficiently and we comply with all the tax rules in Ireland,” a spokeswoman said.>

Precisely. I cannot understand why all the fury should be directed at these companies when it's clearly the role of governing politicians in the affected countries to do something about it. Exactly the same farce is being played out in the US where directors are being hauled before moralising 'lawmakers' in order to "explain themselves".

As others have pointed out one does wonder how many of these self-same politicians/lawmakers employ lawyers to organise their tax affairs in a similar sort of way?

The blatant hypocrisy here is almost overwhelming.

[teamsaint]

Scotty, the point about where the criticism should be aimed is a worthwhile one. but the big companies and government are in it together. Complicit. The companies lobby , and governments comply. Criticism aimed at the companies is therefore perfectly reasonable IMO.

[amateur51]

<Google’s tax reduction method takes advantage of Irish tax law to legally move profits in and out of subsidiaries in Ireland, eventually lodging them in Bermuda, which levies no corporate income taxes.

“We have an obligation to our shareholders to run our business efficiently and we comply with all the tax rules in Ireland,” a spokeswoman said.>

Precisely. I cannot understand why all the fury should be directed at these companies when it's clearly the role of governing politicians in the affected countries to do something about it. Exactly the same farce is being played out in the US where directors are being hauled before moralising 'lawmakers' in order to "explain themselves".

As others have pointed out one does wonder how many of these self-same politicians/lawmakers employ lawyers to organise their tax affairs in a similar sort of way?

The blatant hypocrisy here is almost overwhelming.

Erm, you've said this before scotty :erm:

[scottycelt]

Scotty, the point about where the criticism should be aimed is a worthwhile one. but the big companies and government are in it together. Complicit. The companies lobby , and governments comply. Criticism aimed at the companies is therefore perfectly reasonable IMO.

Yes, team, you are right they are in it together because it suits them both ... on the one hand lower tax rates and, on the other, jobs for the economy ... and politicians of all parties must know that perfectly well enough. If not, they're even more out of touch than we ever imagined!

I don't blame people for wanting the tax laws changed. So do I. Yet only the politicians can change things as it is unreasonable not to expect companies to choose the cheapest legal option.

Any genuine 'immorality' here is being displayed by the two-faced double-dealing by some of our politicians, imho.

[amateur51]

Yes, team, you are right they are in it together because it suits them both ... on the one hand lower tax rates and, on the other, jobs for the economy ... and politicians of all parties must know that perfectly well enough. If not, they're even more out of touch than we ever imagined!

I don't blame people for wanting the tax laws changed. So do I. Yet only the politicians can change things as it is unreasonable not to expect companies to choose the cheapest legal option.

Any genuine 'immorality' here is being displayed by the two-faced double-dealing by some of our politicians, imho.

And again :yikes:

[scottycelt]

Erm, you've said this before scotty :erm:

Probably, amsey.

However, the only real point at issue is maybe worth a bit of repetition, especially with your very goodself hovering in the background and desperately waiting to pounce over any possible perception of inconsistent argument? :winkeye:

[ahinton]

Can or should the "morality" or otherwise of governments be measured in terms of their taxation policies at any time? If so (and I'm not saying that it is), some governments might arguably be thought of as more "moral" than others and some may be regarded as having no "morals" at all.

One major problem that from time to time afflicts arguments about taxation and morals arises from the greater trust in governments than in other non-governmental organisations of power and influence that is seen by some as a "moral" stance; the fact that large multinational corporations' first loyalties are to shareholders and customers rather than entire populaces does not of itself automatically confer upon governments any kind of superior moral high ground.

[amateur51]

Dave Hartnett, the former head of HMRC who was criticised for "sweetheart deals" with big firms, has become a consultant to tax firm Deloitte.

A spokesperson for Deloitte said he would be advising foreign governments and tax administrations, primarily in the developing world.

Deloitte, whose clients include Starbucks, said Mr Hartnett would work one day a week for it.

It added that he would not work with UK companies or HMRC

http://www.bbc.co.uk/news/business-22686877

I wonder what our resident tax 'experts' will make of this :erm:

[Beef Oven]

Dave Hartnett, the former head of HMRC who was criticised for "sweetheart deals" with big firms, has become a consultant to tax firm Deloitte.

A spokesperson for Deloitte said he would be advising foreign governments and tax administrations, primarily in the developing world.

Deloitte, whose clients include Starbucks, said Mr Hartnett would work one day a week for it.

It added that he would not work with UK companies or HMRC

http://www.bbc.co.uk/news/business-22686877

I wonder what our resident tax 'experts' will make of this :erm:

I think Deloittes should get him working on benfit fraud instead. Other resident tax experts will have a different view.

[mangerton]

I think Deloittes should get him working on benfit fraud instead. Other resident tax experts will have a different view.

I don't think he should be working at Deloittes at all. Cameron approved this, apparently. No surprise there. There is something rotten at the heart of government to allow these things to take place.

For a further example see the Atos story elsewhere on this forum - and throughout the media. Watch out for Duncan Smith walking into a job at Atos as soon as he leaves the cabinet.

[Beef Oven]

I don't think he should be working at Deloittes at all. Cameron approved this, apparently. No surprise there. There is something rotten at the heart of government to allow these things to take place.

For a further example see the Atos story elsewhere on this forum - and throughout the media. Watch out for Duncan Smith walking into a job at Atos as soon as he leaves the cabinet.

Of course, in all seriousness it's deplorable.

Hard to know how to legislate for it though. Down the years we'd always relied on ethics and, in the main, it worked - not these days matey!!