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BBC sets Daily Mail reporting standards on loans

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  • webberg
    replied
    There is much wrong with the way HMRC approaches big business.

    Some of this is down to political interference. Some is down to lack of staff. Some is down to lack of expertise. some is down to lack of budget.

    Let's assume that a fully trained and modestly competent Inspector of Taxes is worth twice as much as your average box ticker on the front line (the people who answer the phone to you -sometimes). An experienced and better trained inspector might be worth say 3 times that base unit.

    People worth 2 or 3 times the base unit are relatively rare in HMRC. Even when you can find them, often they are constrained by policy or politics from doing a decent job. This is why many leave. No loinger can they exercise the knowledge and authority they were trained for, but instead have to follow rules driven by the lowest denominator.

    So a team looking at contractor settlement might be 10 "3 unit" people, 50 "2 unit" and perhaps 500 "1 unit". So 630 units to collect say £2.5bn. Around £400k a unit.

    A team looking at a multinational might be 2 "3 unit", 4 "2 unit" and perhaps 15 "1 unit", so 25 units. To collect what? £2m max. Around £80k a unit.

    And that's before you start adding in the ability of big business to outgun HMRC in better trained say "4 unit/5 unit" people who work for the big law firms.

    Leave a comment:


  • BrilloPad
    replied
    Originally posted by dammit chloe View Post
    The tax system as it stands is on its last legs in terms of sustaining the country.
    I would like to think that is true. But I don't think it is. HMRC think they are doing very well and the government will do nothing to meddle with them.

    Leave a comment:


  • dammit chloe
    replied
    I realise there business is everywhere and they pay little tax in most of those place. Just highlighting that they are far more than logistics.

    They have a large presence in the UK with warehouse, datacenters etc The order may be funnelled financially elsewhere but most of the stuff is in stock in the UK and delivered from the UK. Prime would not work otherwise.

    I think a new form of simpler, collectible, hopefully lower taxation, but unavoidable, needs creating. Regressive or not business will adjust.

    The tax system as it stands is on its last legs in terms of sustaining the country.

    Leave a comment:


  • webberg
    replied
    A lot of the Amazon activities mentioned are not in the UK.

    When you order something from them, it comes from Luxembourg (or did before the EU called foul and forced the Lux authorities to move them on). The "Brand" is in the US. The funding for the operations is probably in a financial centre such as Ireland or the Netherlands for the European outfits and perhaps have been inverted in the US, so is now in BVI or USVI.

    Multinational outfits selling via the web are difficult to pin down.

    What you get is a number of tax jurisdictions claiming ownership of part/all of the profits and each unwilling to back down to allow say a US or a UK tax authority to run a proper enquiry. the result is that Amazon (and I'm sure most other multinationals) have a disadvantage in that they have to deal with many, many tax authorities and an advantage in that they can play them off against each other.

    A logistics operation with boots on the ground is easier to tax than a web presence. Thus for HMRC it's low hanging fruit. Better to collect a little percentage of a lot, than nothing.

    Turnover taxes are regressive. Many start ups may have high turnover and no profit (Uber?) and therefore a turnover tax would see them out of business pdq.

    Turnover taxes do not encourage growth and I guarantee that as soon as you introduce some form of threshold or banding, tax avoidance/evasion would be de rigeur.

    Leave a comment:


  • dammit chloe
    replied
    Question now though should our tax system be based more on a low revenue tax that can't be subverted or all those other taxes we currently have that clearly are? I think it should. No point in having 20% tax on profits if everyone can engineer it to little or none.

    As for this scheme it appears to be clear evasion as the loans were falsified to appear as they had been made in the past.

    Logisitics are clearly a large part of Amazon's strength but it is also a product creator, streaming service, retailer etc and their datacentre stuff AWS is a huge part of their business and is actually where a lot of the income derives from to grow the rest of their business. I would say it does a lot more than simply deliver stuff. It's only in recent years that they have started their own home delivery network.
    Last edited by dammit chloe; 3 June 2019, 15:32.

    Leave a comment:


  • webberg
    replied
    Many journalists are not shy of putting out 100% of lurid conclusions based on 50% of the facts.

    I have some sympathy (tax is not a "sexy" subject for click bait) but not much.

    We see it all the time though - "Amazon pays 0.0002% of its turnover in UK tax" - is an example of the sort of nonsense published.

    You pay tax on profit, not turnover.

    Amazon is essentially a logistics operation in the UK. It delivers stuff.

    If they compared the result with other logistics companies, fine, but that does not make a good story.

    Unfortunately the political establish is only too happy to quote newspapers inaccuracies when they are favourable and swift to reject them when not.

    Leave a comment:


  • Delendog
    replied
    Originally posted by simes View Post
    Thing is, if the chap Did utilise the existing law to his own ends, the problem is not with the chap, but with the law.

    Nothing new here, of course.

    HMRC's only remit is to now a) whine about paying a moral level of tax, or b) closing the door after the horse has bolted, change the law retrospectively and then chase.
    They will just apply the loan charge

    Leave a comment:


  • simes
    replied
    Thing is, if the chap Did utilise the existing law to his own ends, the problem is not with the chap, but with the law.

    Nothing new here, of course.

    HMRC's only remit is to now a) whine about paying a moral level of tax, or b) closing the door after the horse has bolted, change the law retrospectively and then chase.

    Leave a comment:


  • BrilloPad
    started a topic BBC sets Daily Mail reporting standards on loans

    BBC sets Daily Mail reporting standards on loans

    The wealthy businessman who paid just GBP35.20 in tax - BBC News

    Documents leaked to BBC Panorama and Africa Eye also reveal how Mr Timis managed to do this.

    They show that in 2017, Mr Timis received payments totalling £670,000 from his offshore trust.

    These were mainly payments called distributions, which should have been taxable. But shortly before he submitted his tax return, Mr Timis allegedly asked the trust to turn the distributions into untaxable loans.

    A backdated loan agreement was created making the loans look legitimate.

    -----
    The BBC investigation has also spoken to the man who ran the trust that helped Mr Timis with the apparent tax dodge.
    -------------------------------------------

    I would hope HMRC would investigate with the same vigour they investigated the 100,000 with loans. If there is a loophole, then close prospectively.

    Sadly I think HMRC will investigate with the same vigour they investigate GAFAMS.

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