Reply to: UK companies moving their tax base to Ireland

[Peoplesoft bloke]

See, the rules they apply for Ltd Cos is that you should be based where you mainly earn your income. Fair enough, but what happens if RSA (Royal & Sun Alliance), a large plc whose policyholders are mainly UK-based, decides to relocate in Ireland or another part of Europe? Albeit part of EU, hence legal? Or maybe borderline 'tax avoidance'?

This would be no different from people buying insurance from an Irish Company (which presumably happens). If policyholders don't like it, they can buy from someone UK-based. Most insurers seem to be foreign owned and/or multinational anyway.

[Dow Jones]

Inconsistency

See, the rules they apply for Ltd Cos is that you should be based where you mainly earn your income. Fair enough, but what happens if RSA (Royal & Sun Alliance), a large plc whose policyholders are mainly UK-based, decides to relocate in Ireland or another part of Europe? Albeit part of EU, hence legal? Or maybe borderline 'tax avoidance'?

[lilelvis2000]

Would you not just invoice from Ireland? isn't that enough.

[BrilloPad]

You don't. Just create a new DimPrawn(Ireland) Ltd and off you go.

And how will HMRC view this? Presumably they will be quite happy for DP to pay tax offshore for income earned onshore....

(see the bn66 thread).

[bobhope]

Exactly.

How do you change the domicile of a ltd?

You don't. Just create a new DimPrawn(Ireland) Ltd and off you go.

[tim123]

Last post for now - because I pay taxes where I live and work,

And so do companies.

The point is that these are multinational companies with worldwide income.

It is the traetment of this income from other countries that HMG is seeking to tax in a way that the companies don't like

tim

[DimPrawn]

Probably. How do I do that with my Ltd?

Exactly.

How do you change the domicile of a ltd?

[ratewhore]

Are we missing a trick here?

Probably. How do I do that with my Ltd?

[AtW]

Why is it OK for you to pick and choose where you work and who you pay taxes, but not OK for a company to do the same?

Last post for now - because I pay taxes where I live and work, companies want to sell in the UK and other markets but pay taxes as if they were located in Cayman Islands and such.

You would have had a point if I dodged taxation by using my other citizenship and channeling money through Russia - I don't do that. Similiarly if I moved back to Russia I'd expect to pay taxes there rather than in the UK - that's pretty fair attitude.

[DodgyAgent]

It's unfair because it is not level playing field - we are not talking about 3-5% difference here (which is a lot as many businesses operate on very slim profit marging), but 15-20% or more.



It's my personal decision. I am a British Citizen and live where I deem necessary, I will pay taxes where I live. What would have been unfair if I paid Russian taxes while living in the UK. How would you have liked if I channeled my company earnings through Ltd in Russia, then applied 12% local Russian flat rate income tax and paid that money back to me while living here, would that be fair? I think not.

Why is it OK for you to pick and choose where you work and who you pay taxes, but not OK for a company to do the same?

[AtW]

Could we then sever all internet links with Russia?

I think it's a sensible option given the amount of dodgy crap that comes out of Russia and Govt is turning a blind eye on that - this treatment should apply to Nigeria and some other countries.

[AtW]

Why is it unfair?

It's unfair because it is not level playing field - we are not talking about 3-5% difference here (which is a lot as many businesses operate on very slim profit marging), but 15-20% or more.

why is it fair for you to live and work here when you should be back in Russia earning and paying tax there.

It's my personal decision. I am a British Citizen and live where I deem necessary, I will pay taxes where I live. What would have been unfair if I paid Russian taxes while living in the UK. How would you have liked if I channeled my company earnings through Ltd in Russia, then applied 12% local Russian flat rate income tax and paid that money back to me while living here, would that be fair? I think not.

[BrilloPad]

Why is it unfair? why is it fair for you to live and work here when you should be back in Russia earning and paying tax there.

Could we then sever all internet links with Russia?

[AtW]

What ever happening to free market competition?

I am all for free market competition. This requires level playing field. When some company is registered in offshore and operates through local subsidiary which takes on losses (so pays no taxes) where as profits are channeled back to the main offshore based company, then this is unfair competition towards local businesses. Isn't that obvious?

You know guys, you crack me up - "free market" for you is like excuse for anything. Can't you get it that this is the same case as with "free speech" and other "free thingies" - there are some rational limits without which the whole idea will be compromised.

And if it is a blanket across Europe they will relocate outside the EU.

If they want to do business in EU they'd better not.

[DodgyAgent]

What happens right now is that big companies shift their HQs around to find the lowest tax location - Ireland in this case. That's unfair competition and it will never work well for countries anyway as those HQs will jump from one place to another. As the result Govts have to increase indirect taxation (fuel, beer, smokes etc) on population, that's why people don't have much disposable income and that's why they almost had to get in debt.

Why is it unfair? why is it fair for you to live and work here when you should be back in Russia earning and paying tax there.