Re: How do cutbacks save economies? : Fri Oct 19, 2012 12:40 am  

Big Graeme wrote:

Seriously, do you have issues comprehending a debate? All you are doing is trotting out things that have been debunked ages ago like an aged tourette's sufferer.

debunked? hardly.

Re: How do cutbacks save economies? : Fri Oct 19, 2012 6:05 am  

Ferocious Aardvark wrote:

Nope, you were simply trying to be clever by introducing side-issues that are irrrelevant to the main point being discussed and which was and is perfectly clear. I am absolutely appalled that Starbucks pays no corporation tax and I am appalled at their avoidance and that they get away with it. The rather obvious facts that they do comply with laws they have no choice but to comply with eg PAYE/NI is neither in question, nor is it in any way some sort of "offset" against unpaid corporation tax.

You even proposed that PAYE deductions in some way are Starbucks' money that they pay HMRC when plainly they are not, they are the money of the individual taxpaying employees.

The point is no such thing. It should not be a matter for them to "consider" paying more tax here, they should be assessed to a fair corporation tax payment based on what business they actually do, which they would then be compelled to pay or appeal.

Your conviction that they "will be taxed somewhere" is touching. You could put it another way: you have no clue what tax they pay or where they pay it.

My point is that I don't care what tax they pay elsewhere or how much it is or at what rates. I am only interested in their UK operation paying a fair whack of tax on their UK business. Which plainly they do not.

Now you really are missing my point. I neither know nor care what other jurisdictions do. But if it ended up that every multinational paid a fair chunk of tax on its UK operations to the UK taxman then I'd be very happy with that.

Starbucks should either pay up on the vast business they do, or if they don't like it, then shut the operation down. Of course, that won't happen, as plainly it makes them millions, however the accountants calculate the taxable bottom line.

Are you seriously suggesting we should have a "Little England" for corporation tax purposes? This would potentially have a negative impact on corporation tax revenues as whole. Are you also suggesting British companies trading abroad pay their fair share in the countries they operate as well rather than pay into the UK HMRC - just plain barmy.

Starbucks employs thousands of people, pays millions in tax/rent/rates and you are suggesting they should pack up - do you not think the country would lose more if they packed up? - yet another barmy proposition.

Where did I mention PAYE, I mention employers NI - a tax on the company not the individual - I would have thought you would have grasped that.

Re: How do cutbacks save economies? : Fri Oct 19, 2012 6:39 am  

A glance at Starbucks financials for the whole business showed they paid $488m on taxable profits of $1.2bn an effective rate of 34% - quite a bit for a company that pays no tax. We need to make it attractive for it to pay some of this in the UK.

Re: How do cutbacks save economies? : Fri Oct 19, 2012 6:44 am  

Sal Paradise wrote:

Are you seriously suggesting we should have a "Little England" for corporation tax purposes? This would potentially have a negative impact on corporation tax revenues as whole. Are you also suggesting British companies trading abroad pay their fair share in the countries they operate as well rather than pay into the UK HMRC - just plain barmy.

I'd be happy with that arrangement because, contrary to your position, I believe that we would still be a net beneficiary. What are your views on the likes of Virgin, Arcadia and other 'British' companies that offshore their tax liabilities? Virgin manage to receive huge sums from the UK taxpayers, while avoiding paying UK corporation tax.

Sal Paradise wrote:

Starbucks employs thousands of people, pays millions in tax/rent/rates and you are suggesting they should pack up - do you not think the country would lose more if they packed up? - yet another barmy proposition.

Where did I mention PAYE, I mention employers NI - a tax on the company not the individual - I would have thought you would have grasped that.

Please stop introducing straw men into the argument, the point in question is Starbucks UK corporation tax remittances. It matters not how much employer NI, UBR or rent is paid. Without knowing how many of Starbucks employees are paid less than £144 pw and therefore avoid UK employer NI contributions, your point is totally irrelevant.

Re: How do cutbacks save economies? : Fri Oct 19, 2012 6:46 am  

Sal Paradise wrote:

A glance at Starbucks financials for the whole business showed they paid $488m on taxable profits of $1.2bn an effective rate of 34% - quite a bit for a company that pays no tax. We need to make it attractive for it to pay some of this in the UK.

Got a link?

Or is it like Tesco's financial report that includes all of the VAT and employee tax/NI in their receipts?

Re: How do cutbacks save economies? : Fri Oct 19, 2012 6:58 am  

Interesting comment from Reuters

Interesting comment from Reuters

Re: How do cutbacks save economies? : Fri Oct 19, 2012 7:23 am  

samwire wrote:

... however, out in the real world ...

It's that new form of Godwin again.

Re: How do cutbacks save economies? : Fri Oct 19, 2012 8:29 am  

Mintball wrote:

It's that new form of Godwin again.

yes, of course it is, apart from being absolutely nothing like it.

Re: How do cutbacks save economies? : Fri Oct 19, 2012 10:04 am  

I see Tesco is going to sell it's "Fresh & Easy" products in the UK. The (unconfirmed by Tesco) suggestion is that the UK will then pay royalties on the sales to its US Fresh & Easy subsdiary (which is loss making) which will help that company out bur presumably reduce UK tax at the same time.

[DaveO]

Re: How do cutbacks save economies? : Fri Oct 19, 2012 1:31 pm  

cod'ead wrote: Interesting comment from Reuters What is interesting to me about it is how some of these tax avoidance measures depend on HMRC accepting what the company does meets certain criteria to allow what they do to be tax deductible. The "arms length" principle strick me as one area where Starbucks are taking the mickey yet HMRC is OK with them doing this. Here is the text: The UK tax authority, Her Majesty's Revenue & Customs (HMRC), allows companies to deduct intellectual property fees if firms can show the charges were made at "arm's length" - that is, if companies can show they would have agreed on the terms even if they were not connected. One way to prove this is to show that a license for which a royalty is paid is key to the subsidiary's profitability, said Stella Amiss, international tax partner with accountancy firm PwC. After all, if you are paying for an asset that never generates a profit, you are probably paying too much. "You would need to show a track record of profitability," she said. Starbucks says it abides by the ‘arm's length' principle, even if the company has not been profitable in the UK. So you can deduct the costs of using a trade mark if doing so makes you a profit - but Starbucks are making losses year on year in part because they do this and also for other reasons such as paying very high interest rates on intra-company loans. It stands out like a sore thumb they are taking the mickey and what annoys me is HMRC are not going in there and saying things like Starbuck's can't use these things as tax avoidance schemes as their main purpose for doing as they do. It's blindingly obvious they are over charging themselves intra-company loan interest so surely HMRC ought to be able to dismiss such unrealistic behaviour and simply say "You can charge your subsidiaries whatever interest rate you like but we ain't going to allow you tax relief on anything above x percentage points above some kind of market rate". It strikes me as HMRC is far to compliant with companies wishes and it is far too easy to abuse what tax relief's there are available.

cod'ead wrote: Interesting comment from Reuters What is interesting to me about it is how some of these tax avoidance measures depend on HMRC accepting what the company does meets certain criteria to allow what they do to be tax deductible. The "arms length" principle strick me as one area where Starbucks are taking the mickey yet HMRC is OK with them doing this. Here is the text: The UK tax authority, Her Majesty's Revenue & Customs (HMRC), allows companies to deduct intellectual property fees if firms can show the charges were made at "arm's length" - that is, if companies can show they would have agreed on the terms even if they were not connected. One way to prove this is to show that a license for which a royalty is paid is key to the subsidiary's profitability, said Stella Amiss, international tax partner with accountancy firm PwC. After all, if you are paying for an asset that never generates a profit, you are probably paying too much. "You would need to show a track record of profitability," she said. Starbucks says it abides by the ‘arm's length' principle, even if the company has not been profitable in the UK. So you can deduct the costs of using a trade mark if doing so makes you a profit - but Starbucks are making losses year on year in part because they do this and also for other reasons such as paying very high interest rates on intra-company loans. It stands out like a sore thumb they are taking the mickey and what annoys me is HMRC are not going in there and saying things like Starbuck's can't use these things as tax avoidance schemes as their main purpose for doing as they do. It's blindingly obvious they are over charging themselves intra-company loan interest so surely HMRC ought to be able to dismiss such unrealistic behaviour and simply say "You can charge your subsidiaries whatever interest rate you like but we ain't going to allow you tax relief on anything above x percentage points above some kind of market rate". It strikes me as HMRC is far to compliant with companies wishes and it is far too easy to abuse what tax relief's there are available.