Welsh town declares itself offshore for tax purposes

[DaveB]

Yes but you're an owner of this offshore entity, and HMRC will tax you on the proceeds.

What is comparable with google is you move to the Bahamas, set up your own company and then set up a subsiduray in the UK. That is comparable, but you still need to justify marketing charges. That will work.

Living in the UK and then setting up a company in the Bahamas which you never visit, and charging out to your UK company and then paying yourself dividends in the Bahamas will have you in court, and Google doesn't do that.

You dont pay dividends in the Bahamas, they are paid by the Bahama company to a UK account and taxed accordingly. The dodge here is that neither of the companies involves pays a significant amount of corporation tax, which means more profits to payout or allow to accrue and then claim tax relief on when the companies are either wound up or when you emigrate to the Bahamas yourself.

[darmstadt]

Just use the Osbourne formula...

[MrMarkyMark]

You couldn't make it up

[mrdonuts]

business relocation

The Powys revolution: How an entire Welsh town is going 'offshore' to avoid tax on local businesses just like Google and Starbucks  | Daily Mail Online

this lot in wales seem to have a bright idea

can contractors group together and do the same to beat this evil government

[d000hg]

The size of their revenues is hardly relevant. We've seen companies like Twitter with revenues in the billions, making a loss.

700k profit on 34m turnover is hardly a big margin. And they are not doing anything funky with shell corporations are they? So is there any reason this isn't legit?

Note on a salary of 684k there will be a heck of a lot of personal tax paid.

[MrMarkyMark]

700k profit on 34m turnover is hardly a big margin. And they are not doing anything funky with shell corporations are they? So is there any reason this isn't legit?

Don't worry they have done a little better in previous years.

Vehicle in the British Virgin Islands
A few years ago, now.......2005

The Mirror has found that Osbourne & Little Limited made a 4.9 million profit on the sale and paid out 5.2 million in dividends that year.

George Osborne's family firm gained thousands of pounds in property deal with offshore developer - Mirror Online

[BlasterBates]

So a)why doesn't McD UK have to pay tax on the franchise profits? b)How much tax do McD franchises pay collectively?

I wasn't aware McD were on the list of "evil" companies, they get good press and are early adopters of new tech, etc?

That's because they don't exist in the UK. You can't attack a company that doesn't exist.

They charge fees to UK businesses.

MacDonalds are restaurants owned by UK business people, they pay fees to MacDonalds Bahamas (or whereever). In the same way that Exporting companies in foreign countries don't pay UK tax.

HMRC can't go and visit MacDonalds because they're not there, they go around and check up on little UK businesses all who pay a fee to MacDonalds International. When you visit McDonalds, it's not actually McDonalds, it's Fred Blogg's restaurant, but Fred has bought the M sign, and all the paraphenalia from MacDonalds in Luxembourg (or whereever).

Starbucks actually own their coffee shops, they also pay fees to their Marketing central in Luxembourg or wherever and are similarly profitable to a Macdonalds restaurant, but the difference is Starbucks does exist here.

That's why Starbucks can claim it's commercial because they can simply sell all their coffee shops to fanchisees, depart the UK, and still get the fees.

[VectraMan]

Just use the Osbourne formula...

I like the way they put "capital allowances" in quotes to suggest it's some kind of scam, along with "adjustments for previous years" which is completely legit and part of the rules. A bit like saying a contractor was able to reduce his CT bill by using "expenses" and "salary".

[MrMarkyMark]

I like the way they put "capital allowances" in quotes to suggest it's some kind of scam, along with "adjustments for previous years" which is completely legit and part of the rules. A bit like saying a contractor was able to reduce his CT bill by using "expenses" and "salary".

My example seems a little less kosher, please see above

[meridian]

The size of their revenues is hardly relevant. We've seen companies like Twitter with revenues in the billions, making a loss.

I completely agree, but that doesn't stop the Daily Mail and the Sun reporting on Amazon, Starbucks, and Google revenues and comparing them to tax paid, without any correction from HM Treasury.

Glad to see Osbourne getting some of the same treatment.