The EU debate - Part II

Alright, I give up on Amazon, then. These were just random examples, anyway. Nevertheless, Amazon could quite easily relocate if the environment got too hostile. It's a multi billion dollar business.

What I'm trying to get across is, we must compete. We are currently at a big disadvantage anyway due to the Brexit vote. We must, now more than ever, reassure global business that the environment in the UK will remain friendly.

There's a reason the Gvt are **** scared of this kind of corporate power - and the clue is in the word power! - because, as I've already said, in this modern, transient world it's very easy for a lot of them to uproot and move to a more friendly environment.

I repeat, create a business friendly environment with a very competitive tax rate and attract these companies. Try to punish, or penalise them, and they will simply leave.

 

You're missing the point. Those businesses generate huge profits from the UK share of the market, there is no way that they are going to up sticks and relocate. HSBC threatened to do it, but they knew that they would be shooting themselves in the foot if they did. The UK is already a massively profitable place to do business. Amazon employ 7000 staff and 1,700 corporate staff. Google have just bought another London building to house their corporate staff. They are not going anywhere.

They avoid their UK taxes because Amazon is based in Luxembourg and Google in Ireland. Yet they make huge profits from their UK operations and pay (up until recently) **** all corporation tax. The answer is not reducing taxes further to try and beg them to stay, they will stay anyway because they have too much to lose by relocating. The answer is to force them to pay their fair share, as most businesses do to the UK exchequer, instead of giving the Tories an excuse to slash public services, privatise the NHS and punish the poor, via austerity.

Whilst political parties argue about how we're going to find the extra £6bn per year to keep NHS services operating as they currently are, the UK has a £119bn hole in its economy in one year, due to tax avoidance.

 

No!! You're missing the point!! Is there something about multi billion dollar, even trillion dollar companies and increasingly transient capital that I didn't make clear?? You seem to think that the expenditure of a few million quid and a few thousand British jobs is some big deal to these global giants. It's not! It's a day or two's global earnings!

For the last time because I'm bored with this now, create an unfriendly or business hostlie environment and these companies WILL vanish from the UK! Guaranteed!

Create a business friendly enviroment, highly competitive tax rate, etc. But be clear that you expect in return that taxes will be paid!

 

And if they still don't pay tax in the UK, what then.

 

I'm sorry but you are missing the point and your figures bear this out. Amazon didn't make 'a few million quid' in the UK, last year they generated £5.3bn worth of sales. It's not 'a day or two's global earnings', it is 10% of their entire yearly market. Yet out of this £5.3bn they only booked £34m of it through UK accounts and hence dodged their fair share of taxation. Companies like these simply will not 'vanish' from the UK because their profits from the UK market are too big to simply throw away. As I said HSBC threatened to do it when a tax was levied and they buckled, because they knew they would be shooting themselves in the foot.

 

The best way to get companies like Starbucks and Amazon to pay their fair share of taxes in every country where they operate is through co-ordinated international efforts involving authorities from multiple jurisdictions.

Due to Brexit, this just became a little less likely.

 

Brexit has put a spanner in the works for a coordinated approach to the issue of taxation. However the UK could (with it's independence) legislate that UK generated profits are subject to UK corporation tax. Companies can base their European HQ in places like Ireland or Luxembourg, but they should still pay the UK rate for the money they make in the UK. Contrary to what NSIS (and George Osborne) was advocating, lowering corporation tax further to try and get them to pay 'a little bit' is completely the wrong message to send out. As I've demonstrated, there is no way that these companies are going to forefit their UK share of the market, as it is far to big for them to simply write it off.

 

Mate we have to stop being afraid of big business. They shouldn't rule us. It was exactly the same with the banking industry after the Credit Crunch. We should've nailed those ****s to the mast, but instead, because we were afraid they might go elsewhere, we let them off the hook. ****ing shameful. Sometimes you have to stick to your principles and then big business will respect you for it. If they don't then you have to ask what kind of country we live in, where our laws and our government policies are governed by businesses rather than those we've elected.

 

I agree with this, but even more specifically big business will not 'go elsewhere' because their profits from UK operations are too big to play hardball with.

 

I agree. But it's the fear of this, the cowering by our governments, that absolutely ****s me off.

 

Whilst they will continue to operate in the uk and will still need warehouses. Who's to say if you piss them off they won't look to use automation. Then as you say Google amazon etc have just bought big offices in the uk. This is to house their professional staff who do not actually need to be located in the uk who will all be spending most generating taxes. If these were to relocate which can be easily done then that's not exactly great for the economy

 

Agreed. Partly it's fear because they have allowed the corporations to set the political agenda. Partly it's because they are funded by Corporations. And partly it's because some of these politicians actually sit on the board of directors of these corporations.

 

You can't simply 'automate' the entire operations of these companies. As for the corporate jobs, they are based in the UK to generate and maintain their UK operations. For a company like Amazon, they are simply not going to abandon a £5.3bn share of the market, if we make them pay their fair share of corporation tax.

 

Let's try it and see what happens. As mentioned earlier, HSBC bottled it when given the ultimatum to pay up.

 

And damaging for the whole world's economy. Once individual countries begin playing that game you get a situation akin to the protectionism which turned the aftermath of the 1929 Wall Street Crash into the Great Depression.

 

But you guys agree they can easily up sticks and move to europe when we leave the eu?

 

The difference is that I believe Brexit will seriously impact on their profits. I don't believe getting them to pay the full taxes will have the same impact.

 

So to be clear, you think a 3-6% rise in cost of goods which is worst scenario is equal to paying the full tax of 20% on profits? They will just raise the cost of goods if they think it will impact on their profits .

 

That's just worst case scenario on cost of goods. There are other economic implications which we have yet to see play out for foreign businesses in the UK post-Brexit. Manufacturing in particular will be hardest hit.

 

They generated £5.3bln of sales not profits from their UK website. Those are by no means all UK sales. I use the UK site to buy things and I live in Spain. I very much doubt I'm the only person who doesn't live in the UK to use the site.

Regardless, it's a website. That's where the sales are generated from. Where the business itself is run from is entirely up to Amazon. Make the business environment unfriendly and they'll go.

Guaranteed.