The problem with Amazon, Starbucks, etc is they have offices or subsidiaries in multiple countries and they shuffle money around. So they may have made £1 billion profit in UK, but they come up with some reason to shift that money, to say Ireland where the taxes are lower. I dunno, maybe they have their Irish division charge the UK division 1 billion for "consulting fees" or some other made up, not really legit, reason to shift the profit overseas. So they end up paying no taxes (or almost no taxes) in the UK because they now "made the profit in another country" instead and the money that should have gone to British government goes to some random low tax country government instead. I'm not a tax law specialist, so not sure what the solution is, but I'm sure there has to be a way to close loopholes like that.
Yeah, not having it that they're making very little profit mate, sorry. And I'm not buying the "if you tax us you'll drive us away and jobs will be lost" line either. Like I say, there is no point in imposing punative levels of tax on business. But there has to be a middle way, and I'm convinced that if the political will exists, it can be easily done. I pay tax on every penny I earn. I also pay Council Tax on my home, and road tax on my car. I have bo problem doing that, because I want to live in a civilised country with schools, hospitals, police, a fire brigade, courts to enforce the rule of law, etc, and all that stuff costs money. I expect to be paying even more soon, if I'm lucky enough to still be in a job, because someone is going to have to pay for Covid and Brexit. So long as everyone contributes what they can afford, i genuinely don't mind paying my whack. What i do mind is when companies like Amazon - and they're not the only one but they're a good example because they are caning it in the current circumstances - are getting such an obvious easy ride. Incidentally, Peter Mandelson (remember him?) got slated for saying he was relaxed about people getting filthy rich; like a socialist shouldn't be saying things like that. What he actually said was, he had no problem with people getting filthy rich so long as they pay their taxes. I make him right on that.
There must be some logic behind these accusations. Where are they declaring profit in other countries that is disproportionate of the market size? All seems very left-wing ranty to me.
There is, it’s down to their chosen complex company structure. The U.K. subsidiary is charged a higher price for the product from the chosen hub in another country, plus they lump infrastructure and management costs on it. Thus reducing the net profit from the U.K. arm. That’s why there’s been constant calls for a sales tax based solely on U.K. turnover.
Yeah sorry I wasn’t clear, I meant companies with high turnover and low profit in general. Anyway, hope you have a good evening Archie.
Not left wing or right wing. It is simply tax loopholes. Companies are more or less free to shift assets around at will between different organizations they own. There's lots of tricks to do this, It's not technically illegal, it's just a method of avoiding taxes that wealthy corporations can take advantage of. It's not that unusual, for example, for large american companies that do almost no business in Europe to have an office in the Netherlands or Ireland, so they can take advantage of certain tax laws that allow them to essentially not pay any taxes in the US where they do all their business and avoid paying much taxes in Europe as a foreign employer "investor". I don't know the complete ins and outs, but it's essentially shifting money around to take advantage of loopholes with international laws. A lot of foreign companies operating in Britain shift the profits they make in Britain (with higher taxes) to countries with lower taxes. On one hand, you can't blame them, who wouldn't want to pay less taxes? On the other hand, that means everyone else in Britain has to pay more to make up the shortcoming. Companies like Amazon and Starbucks don't pay the taxes on the profits they make in high-tech Britannia, they shift those profits overseas to save money on taxes. Not illegal. Just maybe not 100% ethical.
Amazon Prime costs £1.30 a month in India. The U.K. pays £7.99 a month. The service is probably a million times better in the U.K. than it is in large parts of India. TCA.
I really don’t get the mindset that sees people defend the supposed right of global disruptive techs and global corporations like Amazon to ‘manage’ their tax contributions as they see fit, I find it plain weird tbh. Same goes for offshore billionaires who contribute **** all to anyone from their colossal wealth. Amazon paid £6.3m in corporation tax in the U.K. in 2019, from sales of £13BN.
