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Corporate Tax Avoidance - A poll

What difference does knowing a business is avoiding tax make to your purchasing decision

  • More likely to purchase

    Votes: 1 1.2%

  • No difference

    Votes: 28 32.9%

  • Less Likely to purchase

    Votes: 56 65.9%
  • Total voters
    85






spring hall convert

spring hall convert

Well-known member
Nov 3, 2009
9,608
Brighton
Personally, I'm doing everything I can to avoid business that I know is actively seeking to avoid paying Uk Taxes. I think this is the only way anything will ever be done about it. Free market capitalists only have one interest, making money. If the tax avoidance becomes more of liability than a benefit, they'll soon stop. This is an obvious way we can actually change things through peaceful, direct action.

You'll be waiting a long time for politicians of any political persuasion to do anything about it. They are far more scared of big business than they are of the electorate.
 


Goldstone1976

Goldstone1976

We Got Calde in!!
Helpful Moderator
NSC Patron
Apr 30, 2013
13,783
Herts
I suspect that I will be in a minority here, but I see a massive difference between tax avoidance and tax evasion. Legally, tax avoidance is arranging your tax affairs to minimise your tax liability while staying within the law; whereas tax evasion is simply not paying the tax that is due and is a criminal offence.

Thus, for me, the government has responsibility for drafting tax laws that enable them to collect the tax they intended when they passed the legislation. A company has the responsibility to pay the taxes they are required to, but not more. Who among us voluntarily pays more tax than we have to? Very few, if any, I would wager. Why then should a company? No, tax avoidance is entirely the responsibility of the government. Tax evasion is an entirely different matter - lock the Directors up, I say!

BTW, I do think that many people are very hypocritical about this matter. If you've ever paid a tradesman cash to avoid VAT, that's evasion and illegal, not avoidance.... why is it ok for individuals to defraud HMRC in this manner but not for companies to use entirely legal methods to minimise their tax?
 


beorhthelm

beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,302
everyone i know uses or would use any available tax reduction/avoidance option made available to them. got a pension? got a ISA? been on a booze cruise? paid a tradesman cash for a reduced price? so why get in a froth because a company does the same?
 


piersa

piersa

Well-known member
Apr 17, 2011
3,155
London
beorhthelm said:
everyone i know uses or would use any available tax reduction/avoidance option made available to them. got a pension? got a ISA? been on a booze cruise? paid a tradesman cash for a reduced price? so why get in a froth because a company does the same?
Click to expand...

on the noggin. All legal means of avoiding tax (apart from the tradesman one). If the govt want big corps to pay more tax they need to close the loopholes.
 






spring hall convert

spring hall convert

Well-known member
Nov 3, 2009
9,608
Brighton
Goldstone1976 said:
I suspect that I will be in a minority here, but I see a massive difference between tax avoidance and tax evasion. Legally, tax avoidance is arranging your tax affairs to minimise your tax liability while staying within the law; whereas tax evasion is simply not paying the tax that is due and is a criminal offence.

Thus, for me, the government has responsibility for drafting tax laws that enable them to collect the tax they intended when they passed the legislation. A company has the responsibility to pay the taxes they are required to, but not more. Who among us voluntarily pays more tax than we have to? Very few, if any, I would wager. Why then should a company? No, tax avoidance is entirely the responsibility of the government. Tax evasion is an entirely different matter - lock the Directors up, I say!

BTW, I do think that many people are very hypocritical about this matter. If you've ever paid a tradesman cash to avoid VAT, that's evasion and illegal, not avoidance.... why is it ok for individuals to defraud HMRC in this manner but not for companies to use entirely legal methods to minimise their tax?
Click to expand...

Personally, I think this argument is completely flawed, if we are going to be so black and white about it, if murder was within the law, would that cease to be morally wrong? The reason the politicians won't change the laws around corporate taxation are nothing to do with the economic rights and wrongs of the matter.

One place I do think you are right though is around the hypocrisy of people in this area. As I said before, this is one where a determined body of people could change it almost overnight by not using these businesses. The shareholders would soon sh*t themselves once they knew it would make a difference to their bottom line. Asking big business to be moral in this area is useless, they don't care, why should they? Their r'aison d'etre is to make money for the shareholders. The only way this will change is if people stop wingeing and do something about it.
 


Bedsex

Bedsex

not my real name
Jan 29, 2009
1,880
Flitwick
The laws are often actually drafted in such a way to encourage companies to take advantage, ie R&D credits, patent box etc. If people have an issue, it should be with the policy makers and not the companies. Current government policy is to reduce corporate tax rates to make the UK an attractive place to do business for many multinationals. The thinking is that what the Treasury lose in Corporation Tax they will more than make up in PAYE and NIC.

Unfortunately there is some terrible reporting on this and it's very easy to make the big, nasty corporates the scape goats.
 




Herr Tubthumper

Herr Tubthumper

Well-known member
NSC Patron
Jul 11, 2003
59,500
The Fatherland
beorhthelm said:
everyone i know uses or would use any available tax reduction/avoidance option made available to them. got a pension? got a ISA? been on a booze cruise? paid a tradesman cash for a reduced price? so why get in a froth because a company does the same?
Click to expand...

This is a very weak argument. As with most things a line needs to be drawn somewhere. Do you seriously believe that a tradesman taking a bit of cash-in-hand somehow allows corporations to circumvent their UK corporation tax? Some might argue the principle is the same but it isn't; unless you also think a slap on the cheek is the same as fist in the face.

Maybe if the playing field was level and the tradesman could dismiss his corporation tax obligation via a convoluted international web of low tax jurisdictions and tenuous intellectual property licenses they they would not need to take the odd bit of cash-in-hand?
 
Last edited:


Herr Tubthumper

Herr Tubthumper

Well-known member
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Jul 11, 2003
59,500
The Fatherland
To answer the original post I generally tend to be choosy about who gets my money. I'm not perfect and on occasion I do break my own rules but smaller independent business are preferable as are businesses which pay their taxes.
 


Herr Tubthumper

Herr Tubthumper

Well-known member
NSC Patron
Jul 11, 2003
59,500
The Fatherland
Bedsex said:
The laws are often actually drafted in such a way to encourage companies to take advantage, ie R&D credits, patent box etc. If people have an issue, it should be with the policy makers and not the companies. Current government policy is to reduce corporate tax rates to make the UK an attractive place to do business for many multinationals. The thinking is that what the Treasury lose in Corporation Tax they will more than make up in PAYE and NIC.

Unfortunately there is some terrible reporting on this and it's very easy to make the big, nasty corporates the scape goats.
Click to expand...

Patent box is a specific scheme though. What Starbucks did was very different. They pushed the interpretation of intellectual property as far as they can....and gave their alleged intellectual property a value which was coincidentally the value needed to not pay UK corporation tax. Do you really believe intellectual property laws were drafted to encourage this?
 




spring hall convert

spring hall convert

Well-known member
Nov 3, 2009
9,608
Brighton
Bedsex said:
The laws are often actually drafted in such a way to encourage companies to take advantage, ie R&D credits, patent box etc. If people have an issue, it should be with the policy makers and not the companies. Current government policy is to reduce corporate tax rates to make the UK an attractive place to do business for many multinationals. The thinking is that what the Treasury lose in Corporation Tax they will more than make up in PAYE and NIC.

Unfortunately there is some terrible reporting on this and it's very easy to make the big, nasty corporates the scape goats.
Click to expand...

I'm no expert but there is a big difference between this and the current Eurobonds scandal isn't there? I understand that we have to attract business to this county but we don't have to pull out pants down and lube up to do it do we?
 


LargeHadronZugzwang

LargeHadronZugzwang

Active member
Feb 27, 2013
394
Restaurant at the end of the Universe
beorhthelm said:
everyone i know uses or would use any available tax reduction/avoidance option made available to them. got a pension? got a ISA? been on a booze cruise? paid a tradesman cash for a reduced price? so why get in a froth because a company does the same?
Click to expand...

Don't agree with this at all, either. Apples and Oranges. Corporation tax evasion, whether it be through a loophole or if people say it is legal is wrong. The enormous sums involved clearly should be returned to the benefit of society. We live in an age where a top golfer can get more money from sponsorship from the same Company, than the entire workforce making the trainers in Indonesia: the fact that he is a good golfer doesn't make it right.
 


beorhthelm

beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,302
Herr Tubthumper said:
Some might argue the principle is the same but it isn't
Click to expand...

of course it is, the whole point is about the principle, and thats the difference between avoidance and evasion. you only say its weak because it highlights the hypocrisy in the debate. some of the methods used to avoid tax are entirely deliberate, like the patent box (allowing profits from UK registered patents to be taxed at a lower rate) and others plain common sence (avoid multiple taxation by only taxing once in company's main domicile). of course many companies are taking the piss, excessive use of transfer pricing for instance. so change the rules and guidance on how their should be followed. other than that how are we going to prevent the likes of Amazon or some other company setting up in the lowest tax country in the EU, when we've explicitly set up the rules to enable a single market?
 




spring hall convert

spring hall convert

Well-known member
Nov 3, 2009
9,608
Brighton
beorhthelm said:
of course it is, the whole point is about the principle, and thats the difference between avoidance and evasion. you only say its weak because it highlights the hypocrisy in the debate. some of the methods used to avoid tax are entirely deliberate, like the patent box (allowing profits from UK registered patents to be taxed at a lower rate) and others plain common sence (avoid multiple taxation by only taxing once in company's main domicile). of course many companies are taking the piss, excessive use of transfer pricing for instance. so change the rules and guidance on how their should be followed. other than that how are we going to prevent the likes of Amazon or some other company setting up in the lowest tax country in the EU, when we've explicitly set up the rules to enable a single market?
Click to expand...

But my point is, the politicians have had long enough to clean this up, they don't want to, it isn't in their or their mates interests. They think we are too stupid/lazy to do anything about it. The only way anything will get done about this is people power.

I don't know if it is intentional or not but your argument that it is the Government's responsibility to do something about it is PRECISELY the reason why nothing will ever happen. It's not their responsibility, it's ours as consumers in a free market.
 


Herr Tubthumper

Herr Tubthumper

Well-known member
NSC Patron
Jul 11, 2003
59,500
The Fatherland
beorhthelm said:
of course it is, the whole point is about the principle
Click to expand...

As I said, if you believe a slap on the cheek is the same principle as a fist in the face then you are correct. I do not.

And as for Amazon, if they are genuinely trading out of Luxembourg then fine. But if the items are picked from a UK warehouse and sent to a UK address with the only foreign element of the transaction being it is logged on a Luxembourg server then the laws which were written before the digital age and clearly not fit for purpose should be changed.
 


beorhthelm

beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,302
spring hall convert said:
But my point is, the politicians have had long enough to clean this up, they don't want to, it isn't in their or their mates interests.
Click to expand...

i think you miss the point: most if not all methods used to avoid tax are deliberatly built into the system for other good reasons. its not the case the government have had long enough, dont want to do anything or are supporting vested interests, they create rules which have unexpected outcomes. so some companies come along and misapply the rules to their benefit. like the EU, set up to allow transfer of capital and labour, means US companies can setup an office in Luxemborg or Ireland and transfer capital there where tax is lower.

Herr Tubthumper said:
As I said, if you believe a slap on the cheek is the same principle as a fist in the face then you are correct. I do not.
Click to expand...

they are different, one could be friendly or construed as assault. the other is assault always.
 


Herr Tubthumper

Herr Tubthumper

Well-known member
NSC Patron
Jul 11, 2003
59,500
The Fatherland
beorhthelm said:
of course it is, the whole point is about the principle, and thats the difference between avoidance and evasion. you only say its weak because it highlights the hypocrisy in the debate. some of the methods used to avoid tax are entirely deliberate, like the patent box (allowing profits from UK registered patents to be taxed at a lower rate) and others plain common sence (avoid multiple taxation by only taxing once in company's main domicile). of course many companies are taking the piss, excessive use of transfer pricing for instance. so change the rules and guidance on how their should be followed. other than that how are we going to prevent the likes of Amazon or some other company setting up in the lowest tax country in the EU, when we've explicitly set up the rules to enable a single market?
Click to expand...

And if you believe that companies should be able to use these loop holes do you not feel that the same privileges should be available to the tradesman in the street? Seems very unfair that only international corporations can get away without paying tax purely because of their size .
 




spring hall convert

spring hall convert

Well-known member
Nov 3, 2009
9,608
Brighton
beorhthelm said:
i think you miss the point: most if not all methods used to avoid tax are deliberatly built into the system for other good reasons. its not the case the government have had long enough, dont want to do anything or are supporting vested interests, they create rules which have unexpected outcomes. so some companies come along and misapply the rules to their benefit. like the EU, set up to allow transfer of capital and labour, means US companies can setup an office in Luxemborg or Ireland and transfer capital there where tax is lower.
Click to expand...

Ok, so we are getting closer, this is good. I am basically right in saying that in a free market economy the only way to stop a company acting immorally in its tax affairs is if consumers stop using that company. Shareholders are only interested in money, they don't care about public opinion as long as the public are still buying.....

Therefore, I think the Governmental aspect to this debate is an absolute red herring and will call it as such. No sooner would they close this loophole than another one would open anyway.

It genuinely is up to us.
 


Herr Tubthumper

Herr Tubthumper

Well-known member
NSC Patron
Jul 11, 2003
59,500
The Fatherland
beorhthelm said:
i think you miss the point: most if not all methods used to avoid tax are deliberatly built into the system for other good reasons. its not the case the government have had long enough, dont want to do anything or are supporting vested interests, they create rules which have unexpected outcomes. so some companies come along and misapply the rules to their benefit. like the EU, set up to allow transfer of capital and labour, means US companies can setup an office in Luxemborg or Ireland and transfer capital there where tax is lower.



they are different, one could be friendly or construed as assault. the other is assault always.
Click to expand...

Having read what Starbucks have done I do not believe for one second the government, in which ever decade it was, envisaged what would happen let alone "deliberately build" it into their legislation.
 


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