Whoops! Another £5 billion bill for the taxpayer

[Doggy Styles]

BAT, the world’s second-largest cigarette maker, had challenged HM Revenue & Customs over its policy of taxing dividend payments from foreign subsidiaries. The verdict paves the way for a £1.2 billion tax refund for BAT and exposes HMRC to a far bigger payout (estimated at £5 billion). That is because BAT was fighting a test case on behalf of some 20 multinational companies which, if successful, will spark similar cases.

Jonathan Bridges, associate partner in KPMG, said: “This judgment makes absolutely clear that the UK dividend taxation rules breach EU law, opening the door for massive tax rebates.”

Blimey, who's fault was that?

Treasury faces £5bn bill as British American Tobacco wins dividends tax case

[TykeMerc]

That's damn interesting and it bangs another nail firmly into MHG's tax policies as well as showing up how vulnerable HMRC are in court.

[AtW]

Good court decision. Such dividends should have never been taxed in the first place. It's not the taxpayers money that is returned here - it's the money taxpayers never had any right to in the first place.

They should have put up tax on fags* to £10 per pack

* cigarettes

[TykeMerc]

Originally Posted by AtW

Good court decision. Such dividends should have never been taxed in the first place. It's not the taxpayers money that is returned here - it's the money taxpayers never had any right to in the first place.

They should have put up tax on fags* to £10 per pack

* cigarettes

I agree, since the decision the money never belonged to the tax man so no matter how much more money HMRC waste appealing the decision it's a done deal. I wonder how much interest they will have to pay to the wronged parties and on the Government borrowing to finance the repayment of previously legalised theft.

The tax on tobacco products is already pretty astronomical, raising it won't produce significant revenue since people already nip to Spain on el cheapo tickets with a large holdall and return with a year or two's worth of smokables quite legally. I'm a nicotine addict and I haven't paid a penny in UK tobacco duty for the last 5 years by acting completely within the law.
For that matter the higher the tax the better the return for the tobacco smugglers who bring it over in bulk and sell it on so not only does the UK lose the duty revenue it also encourages the Black Market and according to the Governments own propoganda organised crime.

[AtW]

Originally Posted by TykeMerc

so not only does the UK lose the duty revenue it also encourages the Black Market

That's why taxation should be harmonised across Europe.

[TykeMerc]

Originally Posted by AtW

That's why taxation should be harmonised across Europe.

In the case of tobacco, alcohol and other trading duties absolutely yes, it's supposed to be a borderless trading community.

I'm not sure it would be possible or practical to consider harmonising other taxes like VAT, Income Tax, Corporation Tax, Inheritance Taxes etc.

[AtW]

Originally Posted by TykeMerc

I'm not sure it would be possible or practical to consider harmonising other taxes like VAT, Income Tax, Corporation Tax, Inheritance Taxes etc.

Well, VAT is harmonised actually - you get 15-25% range I think and it's EU-wide, so some leeway (sp?) is given, but you can't have 5% VAT (0% VAT is still possible on some products).

There should be and I think now will be global crackdown on offshores - the next logical thing would be to make sure countries inshores (heh, like Ireland) don't become de facto offshore with too different tax rates to suck in HQs. Frankly the way CT is calculated should be reconsidered to avoid profits channeled to offshore or low tax places. If you make money in UK then you should pay taxes on it in the UK even if you are registered anywhere else, same for any other EU member and if you don't like that then you can't sell in EU.

Inheritance Tax should be abolished, anyone who demands it should be opted in to pay it if they wish so.

Corporation tax should be very low - pension funds big investors so in effect this would tax on pensions which is wrong.

Income tax should only start after half-decent life allowance, say £20k in the UK - some increase in tax if you earn a lot more but have a cap, say any earnings above £1 mln is fair play - no income tax on that.

VAT should raise, maybe 25% is not a bad idea - end user consumption is where taxation should take place, but people should decide themselves where to spend their money.

The only big taxes should be those aimed to prevent undesireable activities such as short term speculation - CGT on such things should be very high to make them basically unattractive and instead offer very low or 0% CGT on long term investments.

Legalise drugs and slap a high tax on it - buy direct from Taleban as part of the peace deal with them (so long as they don't train terrorists to attack foreign targets).

Of course this means massive State spending cuts but that's totally necessary - otherwise EU/USA can't compete against China and other countries, the West has to have efficient State system that is not a burden on population.

That's a short summary of my Tax Policies that will be implemented within 100 days in office

[Doggy Styles]

Originally Posted by AtW

That's why taxation should be harmonised across Europe.

You've still got that discredited soviet mindset AtW. Harmony is the last word I'd use.

What say will the UK electorate have in their own tax regime? As an average Brit, my priorities are different to your average Greek.

Without tax competition, what incentive is there to be efficient if taxes are inflated everywhere to pay for government waste? As it is, TykeMerc is able to take his custom elsewhere, and in the bigger picture we can vote for governments who we think will do better with our money.

Do you know that the EU accounts have not been signed off for 14 successive years because the auditors cannot track all of the money we give it? And rather than address the problem they sack the auditor?

[DodgyAgent]

Originally Posted by AtW

That's why taxation should be harmonised across Europe.

No it should not. It is up to each country to set its own taxation bands in order to compete for businesses to locate in them.

[TykeMerc]

Originally Posted by DodgyAgent

No it should not. It is up to each country to set its own taxation bands in order to compete for businesses to locate in them.

I agree that when it comes to personal and corporate tax policies harmonisation isn't desirable.

Trade duties could and should be harmonised as high duties simply fail when people can nip accross a border and pay much lower duty. In the tobacco and booze examples people pay duty in Spain and France so the Exchequer loses out completely.