Taxes - what taxes

[Mich the Tester]

That's ancient history now.

Same kind of timeframe as Wars of the Roses.

Ancient history except for the fact that they repeated the trick only a few years ago.

In fact I'd say that UKIP are missing the point about independence. The biggest threat to the UK's independence is not a bunch of fumbling Frogs and drinking Deutschers, but British socialists that repeatedly put the country into enormous debt. Take a look at Greece and tell me if you think they have democracy and 'independence'. There but for the grace of God, etc.

If you want freedom, start by balancing the books. Start balancing the books by attracting businesses and not taxing them too much. Then don't spend too much money.

[AtW]

Companies will headquarter their businesses and incur their largest overheads in countries where they pay the lowest tax and impose the lowest restrictions on their activities.

Companies with HQ in UK make most of their profits from countries like USA, EU, Japan - all high tax countries.

So if they actually paid corp tax on profits made in those countries they would not even have UK liability for tax because it would be offset against already paid tax there.

The issue for them is that many of them don't pay tax in countries where they actually make profit, even if it's not UK.

By the way do International tax authorities look at where the servers are located that drive your business when assessing your tax obligations?

Our servers are located in UK

We are based in UK, provide services from UK, pay taxes in UK.

[AtW]

If you want freedom, start by balancing the books. Start balancing the books by attracting businesses and not taxing them too much. Then don't spend too much money.

Yes sure, attract businesses - cut down corp tax to 15% or maybe even less, but it won't work if big businesses can get away with paying 0%.

[DodgyAgent]

Companies with HQ in UK make most of their profits from countries like USA, EU, Japan - all high tax countries.

So if they actually paid corp tax on profits made in those countries they would not even have UK liability for tax because it would be offset against already paid tax there.

The issue for them is that many of them don't pay tax in countries where they actually make profit, even if it's not UK.



Our servers are located in UK

There is no obligation for companies to pay tax according to where profits are made. So if Starbucks run 100 restaurants in Japan a 100 in the UK but their HQ is in the UK and their IT centre is in India how does that work?

[Mich the Tester]

if Starbucks run 100 restaurants in Japan a 100 in the UK but their HQ is in the UK and their IT centre is in India how does that work?

Their bookkeeping is subject to the vagaries of Bob's programming skills.

[AtW]

There is no obligation for companies to pay tax according to where profits are made. So if Starbucks run 100 restaurants in Japan a 100 in the UK but their HQ is in the UK and their IT centre is in India how does that work?

We pay UK tax on profits made in USA and other countries, does not matter where profit is - could be on the Moon, it has to be paid where the company is tax resident - UK for us.

For Starbucks I'd expect their UK subsidiary to pay UK corp tax on profits they make here since they've got a UK registered subsidiary. US HQ that owns it should probably pay its own taxes on dividends it gets from those companies that would be repaid to shareholders.

[DodgyAgent]

We pay UK tax on profits made in USA and other countries, does not matter where profit is - could be on the Moon, it has to be paid where the company is tax resident - UK for us.

For Starbucks I'd expect their UK subsidiary to pay UK corp tax on profits they make here since they've got a UK registered subsidiary.

Exactly and Starbucks pay their taxes according to where they make their profits. Or are you saying that companies should be bound by laws that do not exist. Their UK subsidiary may on its own make profits but such is law that starbucks can offset losses from other parts of their business. If you are now saying that Global companies should have entirely separate companies according to which country they are in then that is a different matter. Before you do argue this then you will find that many of the economies of scale that drive companies to become global operations will be lost.
If you are going to argue for a "cost/profit per country" then you will also need to argue for the removal of the concept of globalised brands.
Starbucks brand has been developed in the USA and that investment has enabled it to sell products in foreign countries. Once you start playing your game then you will start having to unravel and quantify the intangible costs of developing a business.

[DimPrawn]

There is no obligation for companies to pay tax according to where profits are made. So if Starbucks run 100 restaurants in Japan a 100 in the UK but their HQ is in the UK and their IT centre is in India how does that work?

Dodgy, all the companies here are UK limited or PLC. Therefore they pay tax on their profits as they are generated, whether it be from overerseas sales or UK sales.

For a coffee company in the UK, that will be their coffee and cake sales in the UK.

What happens though, is the UK company is a subsidiary of an overseas company registered overseas. There will be "exceptional" items on the UK books that cost the UK company all their profits. So UK tax paid <= 0.

The overseas company will have "exceptional items" to pay on another subsidiary in < insert tax haven country here>

They will pay their taxes there, usually at close or or equal to a rate of fook all.

HTH BIDI

[tomtomagain]

I'd set the corporate tax rate to 0%. Then there would be no need to minimise it.

Why should we tax company profits? It just limits employment and growth.

Just tax dividends, salary, benefits in-kind and consumption.

What is the point in trying to take 20% from a company in the UK when instead the company could retain the money and use it to employ others and to invest in whatever it does?

Another benefit is that all those clever people working for the "Big 4" who waste their lives dreaming up tax avoidance schemes could be redeployed to do something more useful to society.

[DimPrawn]

Setting company tax rate to zero wouldn't generate more tax revenue, but at least it would be a level playing field for all companies operating in the UK and I'm all for it.

Problem is, dividends would be declared overseas and consumption tax would only hurt the man in the street.