Re: Google. : Thu Dec 13, 2012 4:14 pm  

EHW wrote:

Of course they would still operate here. The UK is Google's 2nd biggest market, and accounts for 11% of their global business revenue. Starbucks generate over £3bn in revenue in the UK. The UK is too valuable to them simply to avoid being here. They would still be here, even if they had to pay 25% corporation tax.

Why would they operate a base here just because people in the UK use Google? That doesn't make any sense whatsoever given they're an internet search engine, who could operate from Mars, if they had electric.

Re: Google. : Thu Dec 13, 2012 5:08 pm  

ROBINSON wrote:

Why would they operate a base here just because people in the UK use Google? That doesn't make any sense whatsoever given they're an internet search engine, who could operate from Mars, if they had electric.

All their servers and stuff are in the middle of Norway or somewhere anyway. The person who uses the search engine is the product that Google sells, not their customer. Google's customers are the millions of businesses that advertise on their platforms. To market to and attract those customers they need to have a presence in the UK, and just like any other B2B business that operates in the UK they need a UK operation. Those customers want a UK based sales person to buy from etc....

Starbucks would have trouble selling coffee over the internet too.

Re: Google. : Thu Dec 13, 2012 6:02 pm  

I wonder how many who moan about Google and Starbucks have downloaded the new Google Maps app for their shine (but crippled) iPhone...

[DaveO]

Re: Google. : Thu Dec 13, 2012 7:08 pm  

ROBINSON wrote:

Too right, it's annoying that companies like Google get out of paying their fair whack of tax. I believe they should, indeed, pay what they technically owe.

BUT, if such incentives were not offered, Google (and others) simply wouldn't set up business there. They'd find somewhere else with a more 'attractive' tax system. You might think that's OK, but with companies like Google come lots and lots of jobs, and with those jobs come employees, all of whom pay tax on both their earnings and on what they spend their wages on. Without companies like Google investing in the local economy, those jobs simply wouldn't exist.

Rubbish. The people Google employ here in the UK are employed to make a profit for Google in the UK. If the UK government somehow managed to take 24% of that profit (current main rate of corporation tax) the idea Google would cease doing business here and chuck away the other 76% of that UK derived profit is a ludicrous idea. They would continue to employ those people just the same and would continue to do business here.

And then you've got the money Google spend on being able to do business and provide those jobs. Their offices have to be paid for, as do their internet connections, their phones, their office equipment, any office materials, and whatever else Google need to use in order to do business.

Profit comes after overheads have been deducted doesn't it!

I'm not defending this, but Governments have to do their sums too, and if the lack of corporation tax is more than made up for with the tax they collect on related activities, then the argument that the country is being robbed stacks up a bit less than if you simplify it all as "Google don't pay tax"

Given the tax they collect on related activities would be no different then you would be wrong there.

I'm not saying it's right, all this, but if it's a case of "jobs v no jobs", or more accurately "jobs, investment and local spending v a fat nothing" then what's the alternative, really?

Wrong again. It's worth repeating. If Google, eBay or anyone else suddenly found the legal mechanisms they currently use to avoid tax were no longer available they would not cease doing business here.

If they did the market would look after itself and the void would be filled.

Don't forget Google make profits FROM the UK. That is from you and me and their UK customers. They can't do that if they cease trading here.

So any mechanism that can be dreamt up to get them to pay corporation tax is a safe and sure way to raise more revenue with no downside.

Re: Google. : Sat Dec 15, 2012 1:15 pm  

Biggest load of crap I've ever heard, DaveO. Stick to left wing political rants, and leave business to those who know what they talk about.

Re: Google. : Sat Dec 15, 2012 2:13 pm  

Google, like ALL corporations, are LEGALLY OBLIGATED to pursue profit. If Google responded to increased taxation in the UK by punitively withdrawing highly-profitable services its shareholders, who would stand to lose financially, are legally entitled to seek not just the removal of the chairman and/or board of directors but also their prosecution under United States federal law.

Re: Google. : Sat Dec 15, 2012 3:39 pm  

Well in the scheme of things it means nothing, but i changed my default search engine from google.

[DaveO]

Re: Google. : Sat Dec 15, 2012 6:04 pm  

ROBINSON wrote:

Biggest load of crap I've ever heard, DaveO. Stick to left wing political rants, and leave business to those who know what they talk about.

Leave business to those who know what they talk about? You aren't suggesting you do are you?

What you post in this thread shows the exact opposite. It's full of baseless "facts" such as:

"You might think that's OK, but with companies like Google come lots and lots of jobs, and with those jobs come employees, all of whom pay tax on both their earnings and on what they spend their wages on. Without companies like Google investing in the local economy, those jobs simply wouldn't exist."

"Lots and lots of jobs"? They employ a grand total of 1300 staff in the UK. They are not a major employer by any stretch of the imagination - apart from in yours that is.

If they shut their UK operation down because they had to pay corporation tax the loss of income tax and NI from those employees would be more than made up for by the corporation tax take so that right wing b/s reasoning doesn't apply here does it?

Not that they would shut down the UK operation anyway. The only reason they employ people here is to help them make a profit out of their second largest market.

And dismissing the tax disadvantages suffered by small companies because they have other disadvantages is just completely irrelevant.

So before you start telling people they write a load of crap you ought to think before you type. Otherwise you just look foolish.

[DaveO]

Re: Google. : Sat Dec 15, 2012 6:16 pm  

Mugwump wrote:

Google, like ALL corporations, are LEGALLY OBLIGATED to pursue profit. If Google responded to increased taxation in the UK by punitively withdrawing highly-profitable services its shareholders, who would stand to lose financially, are legally entitled to seek not just the removal of the chairman and/or board of directors but also their prosecution under United States federal law.

Exactly. The idea they would give up their UK revenue if they had to start paying tax on it is as I said ludicrous.

The way Google avoid tax in the UK that they would otherwise be liable for (no their tax liability is not solely in Ireland as someone else suggested) is by doing things like posting a loss due to giving out share awards to employees.

The fact they can register a loss in that way and so avoid a higher tax bill is (part of) the problem. There just seem far too many ways for multi-national businesses to reduce their paper profit to zero or less simply to avoid tax. However if those mechanisms were to be denied them, they would still be here doing what they do and taking home a mere 76% of their profit.

Re: Google. : Sun Dec 16, 2012 3:04 pm  

DaveO wrote:

Exactly. The idea they would give up their UK revenue if they had to start paying tax on it is as I said ludicrous.

Well, this is the problem. Far too many people are either unaware or don't want to recognise the fact - written in plain English into the legal obligations of US-based corporations - that they MUST pursue profit. We have to view this issue in terms of structures. Structures which shackle corporate bosses (who often have the best of intentions) exclusively to one mode of behavior - the pursuit of maximum profit above all other concerns. These are the very same structures which lead to, say, oil spills or tragedies such as Bhopal.

So you have, the head of global oil company X, who might otherwise be completely opposed to harming the environment, presented with two solutions to, say, a well head problem:

Option 1 (Cheap): Fast and loose and ignores the safety concerns of workers.
Option 2 (Expensive): Thorough and safe.

Irrespective of his concerns (if indeed he has any), he is legally obligated to choose option 1. If he doesn't he knows that the shareholders of the company, who stand to be out of pocket, can seek his removal. And he also knows there are any number of people after his job who will have no issues whatsoever with taking the cheaper route.

It's completely mad to think Google would dump what for it is a very profitable venture simply out of spite. That option is not just inconceivable but illegal.

But beyond this, we really must think seriously about how we have allowed ourselves to be controlled by a legally-binding ideology that, taken to its logical conclusion, can only lead to dire consequences. This is why Marxists - quite correctly - argue that if capitalism isn't protected from itself it must ultimately consume itself.