Turnover tax

[Mich the Tester]

I don't know why Amazon always get attacked in these debates as they a) sell real things that cost money, and b) have always operated fairly low profit margins (arguably as a way to put others out of business but that's a different issue). Google, claiming they only make money in Ireland, is a bit more difficult to defend.

And for companies that sell mostly to the public, VAT is a turnover tax.

c) they manage money rather better than politicians have done for the last 100 odd years

[d000hg]

And for companies that sell mostly to the public, VAT is a turnover tax.

Except you can choose where to pay it...

[DirtyDog]

I don't know why Amazon always get attacked in these debates as they a) sell real things that cost money, and b) have always operated fairly low profit margins (arguably as a way to put others out of business but that's a different issue). Google, claiming they only make money in Ireland, is a bit more difficult to defend. Apple make terrifying profits everywhere in the world but somehow manage to not pay tax anywhere, and yet are never mentioned in these stories, no doubt because media types are drooling Jobsian fanbois.

And for companies that sell mostly to the public, VAT is a turnover tax.

Amazon (and Apple as well) are surely worse - they sell physical things, shipped from UK warehouses by UK staff, but they then claim that they aren't liable for UK corporation tax. They also pay a different rate of VAT - they charge the client 20% and then pay Luxembourg VAT rates at the end (which are significantly lower than the UK).

Journalists will pick and choose the companies that they focus on for things like this - the Guardian never mentions that their parent company did something similar when they bought a magazine group (can't remember the details, but it's mentioned in Private Eye every so often).

[VectraMan]

Amazon (and Apple as well) are surely worse - they sell physical things, shipped from UK warehouses by UK staff, but they then claim that they aren't liable for UK corporation tax.

Amazon would say that's just a distribution business. If a French company makes something for £900 and sells it for £1000 in the UK delivering it via DHL, are DHL avoiding tax by not paying 30% of the £1000 of goods that they're selling? It's still "shipped from UK warehouses by UK staff".

If Amazon did start shipping everything from Luxembourg, would that make it okay? The end result would be higher costs for the consumer, and some UK workers losing their jobs.

[vetran]

a turnover tax is not suitable and I guess would be illegal under EU law.

they need to revamp the UK tax laws for the modern economy.

Vat paid on sub £17 items by the overseas supplier would be sensible. The supplier pays Vat for low price items and gets a trackable 'vat paid' customs label. That levels the playing field for UK firms. tax free gift status only available for private individuals.

Exporting profits need control as every multinational is doing it. Not sure how but pay and claim back foreign tax would seem sensible.

[Mich the Tester]

Folks, it's Ken Livingstone; stop taking it so seriously.

[Ticktock]

Amazon would say that's just a distribution business. If a French company makes something for £900 and sells it for £1000 in the UK delivering it via DHL, are DHL avoiding tax by not paying 30% of the £1000 of goods that they're selling? It's still "shipped from UK warehouses by UK staff".

If Amazon did start shipping everything from Luxembourg, would that make it okay? The end result would be higher costs for the consumer, and some UK workers losing their jobs.

No - DHL are not selling the goods, just delivering them - what they are selling are their delivery services.

If Amazon were truly operating out of Luxembourg and delivering from there, then yes, that would be OK. The higher costs to the consumer argument is irrelevent to whether they are paying the correct amount of tax. Pricing should be driven by the market - if Amazon tried to pump up their prices too far then other companies would seek to undercut them - if those price rises were due to high delivery costs, then other companies might find it cheaper to operate from the UK, despite paying tax.

[DodgyAgent]

To do that involves having a smaller government and public sector, even Maggie struggled to do that!

Alternatively we could get better production from public sector workers.

[Mich the Tester]

Alternatively we could get better production from public sector workers.

That won't happen while they are;
a) heavily unionised and
b) difficult to fire and
c) often doing meaningless 'jobs' anyway

[VectraMan]

No - DHL are not selling the goods, just delivering them - what they are selling are their delivery services.

So same as Amazon UK. If I buy something from Amazon, i.e. the website, I'm buying it from Amazon EU SARL, a company in Luxembourg who happen to use a delivery and distribution business in the UK. I've never bought anything from Amazon UK. How is that different from using DHL?