Dodgy deals on wheels

[AtW]

By calling this tax avoidance it helps to confuse avoidance and evasion, which is what HMRC want of course.

The problem is that evasion is a criminal matter so level of proof required is much higher (beyond reasonable doubt) and also in this country seems to be the view that so long as somebody put info on tax return then it can't possibly be evasion even though in this case surely it's clear (in my view) that the intention was to evade paying tax - so this chap is getting away lightly, where as HMRC tried to do Harry Redknapp for undeclared hundred grand or so, which I certainly believe he could have just forgotten about as he paid tax on millions that he earned as manager.

[AtW]

How about a German company that posts stuff from Germany to the UK? Where should they pay tax on their UK sales? Tax law says Germany. Now how about if they have a warehouse & distribution operation in the UK? Tax law still says Germany.

I think real solution is to make sure corp tax rates (like it happened with VAT) are about the same in Europe and then it's ok in a free trade zone as long as this tax actually gets paid.

The real issue is that large companies like Google don't even pay low Irish corp tax rates - 12.5% corp tax, instead getting money out of Europe completely and paying feck all here, that's not right.

[Sysman]

They claimed £5m in squirrel food last year and another £1m on sofa cleaning.

Though HMRC deemed it appropriate under the circumstances......

£5m of "used" squirrel food will make a mess of a lot of sofas.

[fullyautomatix]

I think the difference between Google, Starbucks avoiding tax and the self employed free lancer is that Google etc employ thousands and pay a heck of a lot of tax that way. The contractor on other hand is trying to avoid tax on the 150K salary he has earned in UK. It was always going to result in a disaster.

[AtW]

I think the difference between Google, Starbucks avoiding tax and the self employed free lancer is that Google etc employ thousands and pay a heck of a lot of tax that way. The contractor on other hand is trying to avoid tax on the 150K salary he has earned in UK. It was always going to result in a disaster.

The real difference is that Google got a lot of high level lawyers, lobbysts and they could pay tax in the end if they had to without going bust - they also got real international business that is not fake "second hand car dealing".

Having said that there is no valid reason other than tax avoidance for them to bill for ad services from Ireland given that they've got a UK subsidiary - all that money should be going through the books of their UK establishment.

[MicrosoftBob]

That's nonsense. They divert their money to other locations and then pay tax on it in those locations. They don't claim to be doing something which is patently untrue.

if we did it, it would be tax evasion

[MicrosoftBob]

The problem is that evasion is a criminal matter so level of proof required is much higher (beyond reasonable doubt) and also in this country seems to be the view that so long as somebody put info on tax return then it can't possibly be evasion even though in this case surely it's clear (in my view) that the intention was to evade paying tax - so this chap is getting away lightly, where as HMRC tried to do Harry Redknapp for undeclared hundred grand or so, which I certainly believe he could have just forgotten about as he paid tax on millions that he earned as manager.

I still don't understand how his dog got a bank account, it's like something out of The Simpsons

[AtW]

I still don't understand how his dog got a bank account, it's like something out of The Simpsons

AFAIK he did not dispute he had bank account, he just said he forgot about £100k in it - what is £100k to somebody who earns a few million quid a year (£7.5 mln a year right now at QPR) and pays tax on that? He should have been fined and pay tax with interest and penalties, rather than drag him to court for tax evasion - the amount was not that material to total amount that he declared and paid.

On the other hand if you take this DJ it appears that most of income were put through that scheme, so amount of tax avoided (or evaded in my view) is material to total he should have paid, now that should be considered tax evasion.

[SpontaneousOrder]

Start with Amazon, google, starbucks etcetc. first.

You like more expensive products?

[VectraMan]

Having said that there is no valid reason other than tax avoidance for them to bill for ad services from Ireland given that they've got a UK subsidiary - all that money should be going through the books of their UK establishment.

But as you say they don't pay tax in Ireland either. Google may as well pay CT in the UK. As long as they can continue to book a big fee for their IP to Bermuda as an administrative cost, it makes little difference.

What need to happen is for governments, the EU, the G20 or whoever to decide what sort of tax international corporations should pay, and where they should pay it, and then debate the pros and cons and the effect on business, trade, jobs, etc, of implementing such a tax. CT doesn't solve this problem, never will and was never meant to.