Fairness

[VectraMan]

It's the job of the directors of the company to turn profits that is paid to shareholders, it's their LEGAL OBLIGATON.

Which makes it their obligation to maximize those profits, which means minimizing costs, and tax is a major cost for any business. Therefore organising things in a way to pay as little tax as legally allowed is also their LEGAL OBLIGATION.

Amazon does not pay (effectively) UK corp tax because it takes profits out of country

How does it "take profits out of the country"? What you mean is Amazon incurred costs outside of Britain in the normal operation of its business that you have decided aren't valid to be counted against CT, even though HMRC and the law say that they are valid.

it also was dodging VAT on a grand scale by shipping from offshore locations.

A whole industry grew up around dodging VAT by shipping from The Channel Islands, and it took the government a long long time to do anything about it. Why should Amazon be the one retailer to not do this, when all their competitors are?

Which reminds me: must pay my SA bill. ;-(

[AtW]

Which makes it their obligation to maximize those profits, which means minimizing costs, and tax is a major cost for any business. Therefore organising things in a way to pay as little tax as legally allowed is also their LEGAL OBLIGATION.

My view is that a lot of stuff that they do isn't actually legal, but HMRC does not challenge them enough to prove that. Directors should not be risking their company's reputation to dodge 24% corp tax, their job should be increase overall profits rather than fook with HMRC, at least that's how they should understand their job under penalty of long prison sentences.

How does it "take profits out of the country"?

Easy - offshore entities are the ones who get the money for actual sales, but costs are attributed to local entities, for example it appears (based on press that I've ready) that UK companies who buy ads in Google actually pay to Google Ireland, and Google UK is paying large "license fee" so it does not make much profits here. They do the same in France but the French have now taken correct view that since contracts are in French and actual activity takes place in France then such transactions should be deemed as if they happened in France.

A whole industry grew up around dodging VAT by shipping from The Channel Islands, and it took the government a long long time to do anything about it. Why should Amazon be the one retailer to not do this, when all their competitors are?

Amazon and a few others online etailers forced the rest of industry to try the same approach after many years of Govt doing fook all about it.

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Naturally Govt and HRMC share big part of blame for allowing this to happen, so Cameron should really STFU and start getting convictions.

[SantaClaus]

I do get dividends and I pay required level of tax on them, but I don't use the dodge of paying myself minimum salary and taking everything else as dividends - the company I founded has now around 10 people and we have income from a very diverse set of customers around the world. It's a bona fide enterprise that I bet pays more tax (corp/PAYE/rates/other) than you do.

There was time (many years) when I had 0 salary, but that was because there was 0 income and I had no dividends.

Not sure what you mean regarding my shares not being "fair tax payers", but I own them directly without involving offshore structures, so I expect to pay CGT on them in the event of disposal (has not happened yet), I will of course claim entrepreneurs relief on those if it's still present (Labour fooked me over with changed CGT to benefit City spekulants), that's not a tax dodge but the relief explicitly designed for that purpose.

It's simple, if you own shares in Starbucks, Amazon, Vodafone and probably just about every other blue chip there is, the company will be using aggressive tax avoidance techniques. The savings are passed to you the shareholder by way of dividends and an increase in the share price. Therefore you are complicit in profiting from tax avoidance.

Sure you pay CGT on the profits, but the companies you invested in made profits in an "unfair" way. Note use of quotes here.

Right, that's my final word on it. I'm getting fed up with spelling out the blimmin obvious.

[MarillionFan]

I do get dividends and I pay required level of tax on them, but I don't use the dodge of paying myself minimum salary and taking everything else as dividends - the company I founded has now around 10 people and we have income from a very diverse set of customers around the world. It's a bona fide enterprise that I bet pays more tax (corp/PAYE/rates/other) than you do.
.

According to your accounts, you paid yourself £4000 in salary last year and £58 in dividends.

[AtW]

It's simple, if you own shares in Starbucks, Amazon, Vodafone and probably just about every other blue chip there is

I don't own any such shares.

Therefore you are complicit in profiting from tax avoidance.

It's one view to take, and possibly not an entirely incorrect one, but in does ont apply in my case.

Sure you pay CGT on the profits, but the companies you invested in made profits in an "unfair" way. Note use of quotes here.

As I said above I don't invest into any other companies.

Right, that's my final word on it. I'm getting fed up with spelling out the blimmin obvious.

[BrilloPad]

My view is that a lot of stuff that they do isn't actually legal, but HMRC does not challenge them enough to prove that.

We are unlikely to find out. Too many politicians getting backhanders.

[doodab]

My view is that a lot of stuff that they do isn't actually legal, but HMRC does not challenge them enough to prove that.

There may be some truth in that. There is a lot of money in advising these firms how to tread the fine line and it can't all be good advice. Perhaps more of it should be tested.

[Paddy]

As they claim not to make any profit in the UK then perhaps they should pull out of the market here. At the very least get a new Chief Exec in to turn things around
Would be interested to see how he's been rewarded for his poor performance.

Let Starbucks go, the independent coffee shops will take up the business

[VectraMan]

My view is that a lot of stuff that they do isn't actually legal, but HMRC does not challenge them enough to prove that. Directors should not be risking their company's reputation to dodge 24% corp tax, their job should be increase overall profits rather than fook with HMRC, at least that's how they should understand their job under penalty of long prison sentences.

If that's true, then it's tax evasion, and nobody, not the headline grabbing politicians or the newspapers themselves have said that Amazon, Starbucks etc. are guilty of tax evasion. If you have some evidence I suggest you tell somebody, because even if HMRC can't be arsed, the newspapers probably will.

Directors, as you've said, have no choice but to try their best to increase the profits of the company and if their accountants and lawyers (I assume they have many) advise that something is legal, then it would be negligent on their part not to follow that path.

Easy - offshore entities are the ones who get the money for actual sales, but costs are attributed to local entities, for example it appears (based on press that I've ready) that UK companies who buy ads in Google actually pay to Google Ireland, and Google UK is paying large "license fee" so it does not make much profits here. They do the same in France but the French have now taken correct view that since contracts are in French and actual activity takes place in France then such transactions should be deemed as if they happened in France.

So, for example, Porsche make a car in Germany and sell it to somebody in Britain. All the money is made in Britain, but 99% of the costs are incurred in Germany. In your scheme, Porsche UK have to pay CT on virtually the whole purchase price because that's "profit", even though Porsche International might be barely breaking even.

Clearly that's ludicrous. At the end of the day, local taxation is incompatible with the idea of international trade. And so far we've been talking about physical goods, what if it's software? I've bought software and paid for website accounts from US companies, and there's no way they're paying UK VAT or CT and it would be ridiculous to suggest they should.

Amazon and a few others online etailers forced the rest of industry to try the same approach after many years of Govt doing fook all about it.

Don't think so. The likes of Play had setup in Jersey when Amazon were still selling books. I doubt Amazon had even registered with them, it was the likes of HMV and Virgin they were trying to compete with. And Play weren't an established international organisation moving into the UK market, they were a company specifically setup with the sole aim of selling cheap into the UK using the low value VAT loophole to undercut the competition.

[doodab]

Clearly that's ludicrous. At the end of the day, local taxation is incompatible with the idea of international trade. And so far we've been talking about physical goods, what if it's software? I've bought software and paid for website accounts from US companies, and there's no way they're paying UK VAT or CT and it would be ridiculous to suggest they should.

Not if they employ people here, have offices here, do R&D here and so on. And in that case you are responsible for ensuring appropriate VAT & excise duties are paid. You did make sure they were paid didn't you?

At the end of the day there is a transfer pricing "loophole" which these companies are exploiting in order to move profits to a lower tax jurisdiction. It's easily plugged by slapping an import duty on whatever they are supposedly importing. I reckon "brandwank" should be subject to duty at 50%.