A few more tax dodgers to add to the list

[LadyDeliah]

I didn't know Boots, Johnny Walker and e-bay were at it too!

https://secure.38degrees.org.uk/pages/tax_dodgers_guide

[Coman]

Possible Elements of HMRC (regarding alleged 'sweetheart' deals with the multinationals)

[LadyDeliah]

Anyone fancy making a Freedom of Information request to see who signed what to allow these greedy tax dodgers to get away with this?

[antantant]

Is there a list anywhere of "good" tax payers so that I know where who to spend my money with?

[ruffers]

Maybe businesses or individuals who volunteer to pay more tax than they are required to?

[LadyDeliah]

Would being registered in the UK be an indication that the business pays UK corporation tax? It seems that this lot register abroad and that is how they avoid it.

[woodrot]

LadyDeliah Wrote:

-------------------------------------------------------

> Anyone fancy making a Freedom of Information

> request to see who signed what to allow these

> greedy tax dodgers to get away with this?

You dont need a FOI for most of the info required - many of these are listed companies & their numbers are in the public domain, if somtimes a little difficult to delve into, as teh Swiss still dont allow access to their domestic tax submission account IIRC..

look at this ( a little dated ) FTSE MC summarisation

The following table lists the ten largest FTSE 100 companies measured by market capitalisation as of 9 March 2011.[4]

Rank Company Sector Market capitalisation (? billion)

1 BHP Billiton Mining 148

2 Royal Dutch Shell Oil and gas 135

3 HSBC Financial services 118

4 Vodafone Group Telecommunications 93

5 BP Oil and gas 91

6 Rio Tinto Group Mining 86

7 GlaxoSmithKline Pharmaceuticals 61

8 Unilever Consumer goods 56

9 British American Tobacco Tobacco 49

10 BG Group Oil and gas 49

Pretty much All of these companies have a Swiss presence that aid tax efficient trading, though the degree of utilisation varies enourmously

This issue isnt about who is hiding assets, but what how does their structure work and the actual CT benefits gained. The Swiss are repatriating detials of blates tax avioders in their gnome banks, but this is a diversion & is effectively is the tip of the iceberg, as the vast majority of corps who use the Swiss setup are doing it entirely legitimately & publicly.Stashing cash in Swiss banks is a pretty Amateur practice nowadays, more the haunt of dictators than big business - theres no reason to hide your cash and run the risk of exposure, when you can incorporate a Baar/ Zug setup and do it legitimately.

Libertarians would argue that tax minimisation benefits the consumer through lower prices at the till, though Im sure there is a doctorate level thesis in the offing that evaluates the consumer benefit vs corporation tax minimisation for corps that use these structures.

We have to be careful of going on a Bankers to blame for everything type of sentiment, when it could be argued that the UK consumer is an accomplice in the game, albeit unknowingly or unwittingly.innit.

[woodrot]

teh EU have raised the issue

http://europa.eu/rapid/press-release_IP-12-1325_en.htm

Estimates of a trillion Euros being bandied about

[LondonMix]

The point is all governments intentionally allow the effective tax rate to be dramatically lowered via various mechanisms because of the benefits (growth and lower prices). That doesn't mean that under all circumstances we would be better off with low rates of corp income tax -- it depends on how the taxes would be spent and if there are other ways to pay for what's needed. It does mean its a bit rediculous to buy into the current circus and demonise the companies who have been behaving exactly as the government would like them to.

woodrot Wrote:

-------------------------------------------------------

> LadyDeliah Wrote:

> --------------------------------------------------

> -----

> > Anyone fancy making a Freedom of Information

> > request to see who signed what to allow these

> > greedy tax dodgers to get away with this?

>

> You dont need a FOI for most of the info required

> - many of these are listed companies & their

> numbers are in the public domain, if somtimes a

> little difficult to delve into, as teh Swiss still

> dont allow access to their domestic tax submission

> account IIRC..

>

> look at this ( a little dated ) FTSE MC

> summarisation

>

> The following table lists the ten largest FTSE 100

> companies measured by market capitalisation as of

> 9 March 2011.[4]

> Rank Company Sector Market capitalisation (?

> billion)

>

> 1 BHP Billiton Mining 148

> 2 Royal Dutch Shell Oil and gas 135

> 3 HSBC Financial services 118

> 4 Vodafone Group Telecommunications 93

> 5 BP Oil and gas 91

> 6 Rio Tinto Group Mining 86

> 7 GlaxoSmithKline Pharmaceuticals 61

> 8 Unilever Consumer goods 56

> 9 British American Tobacco Tobacco 49

> 10 BG Group Oil and gas 49

>

>

> Pretty much All of these companies have a Swiss

> presence that aid tax efficient trading, though

> the degree of utilisation varies enourmously

>

> This issue isnt about who is hiding assets, but

> what how does their structure work and the actual

> CT benefits gained. The Swiss are repatriating

> detials of blates tax avioders in their gnome

> banks, but this is a diversion & is effectively is

> the tip of the iceberg, as the vast majority of

> corps who use the Swiss setup are doing it

> entirely legitimately & publicly.Stashing cash in

> Swiss banks is a pretty Amateur practice nowadays,

> more the haunt of dictators than big business -

> theres no reason to hide your cash and run the

> risk of exposure, when you can incorporate a Baar/

> Zug setup and do it legitimately.

>

> Libertarians would argue that tax minimisation

> benefits the consumer through lower prices at the

> till, though Im sure there is a doctorate level

> thesis in the offing that evaluates the consumer

> benefit vs corporation tax minimisation for corps

> that use these structures.

>

> We have to be careful of going on a Bankers to

> blame for everything type of sentiment, when it

> could be argued that the UK consumer is an

> accomplice in the game, albeit unknowingly or

> unwittingly.innit.

[LadyDeliah]

It's not about demonising them, it's about exercising the only power we have to pursuade very powerful corporations to do the morally right thing in the face of massive cuts to our public services and the burden of taxation falling on fewer and fewer people.

[LondonMix]

I agree if you are happy to accept the conequences that go along with that as well as truly ensure that the companies you are switching to (large or small) are paying what you deem is a morally acceptable amount of tax- most large comapnies don't and many small companies manipulate the system as well in various ways (pretending to employ family members to suck out profit of their companies using the tax free allowance etc etc etc).

Increasing effective payment of corp income tax to reduce gov't borrowing will at least in the short-term increase unemployment and prices but will also put the country on a long-term more sustainable course more quickly in the best case scenario.

[DaveR]

"The point is all governments intentionally allow the effective tax rate to be dramatically lowered via various mechanisms because of the benefits (growth and lower prices). That doesn't mean that under all circumstances we would be better off with low rates of corp income tax -- it depends on how the taxes would be spent and if there are other ways to pay for what's needed. It does mean its a bit rediculous to buy into the current circus and demonise the companies who have been behaving exactly as the government would like them to."

I think this view is fundamentally mistaken. The UK government sets tax rates and then offers exceptions or reductions based on incentivising particular behaviour that is perceived to provide a public benefit, whether it be pension saving, film investment, starting up new businesses, or whatever other ideas seem attractive to the Chancellor of the day. When taxpayers seek to take advantage of the exception without providing the corresponding benefit they are, of course, not doing what the government would like them to do at all. Film finance schemes that don't lead to any films being produced, or any staff being employed, or any support companies engaged, are clearly abusive and unethical, whether they manage to be legally effective or not.

In any event, this analysis doesn't consider at all the use of artificial arrangments with low tax jurisdictions, which is a far bigger issue as far as corporate avoidance is concerned. The UK has double taxation treaties with other countries because at root it accepts that it is fair for income/assets/transactions not to be taxed twice, and, more importantly, because there is implicit pressure on all major economies to be 'tax friendly' jurisdictions for multinational corporates. Whilst I agree that keeping tax rates as low as they can be is generally a good thing, the sooner there is some collective action to effectively eliminate tax havens the better - they provide no benefit to anybody and present huge incentives to companies to act unethivally.

[LondonMix]

What you are describing DaveR is more akin to tax evasion and is usually covered in most countries by general anti-evasion rules. What most companies do is nothing of the sort. They take advantage specifically of tax treaties the UK has entered into with various tax havens.

I can tell you that when the rules governing the use of off-shore vehicles to eliminate stamp duty on residential purchases came in, tax lawyers I work with spoke to the UK tax authorities to understand if continuing to do this for commercial real estate transactions would now be looked on as an aggressive evasion tactic. HMRC said no because they wanted to encourage business (their words). The lawyers asked because their clients asked them to clarify. Their corporate clients and investment fund clients wanted to make sure they were not breaking the law and wanted clarity from the tax authorities on how this would be viewed and this is almost always how the relationship works. The reason they do this is because their investors (directly and indirectly) are pension funds who also don't ever want to be caught up in an intentional wrong-doing scandal.

[LadyDeliah]

Well if there is a legally imposed level of corporation tax of 20% (too low in my opinion, but that's another argument) why can't the UK government arrange that the total they pay for their UK activities is 20% no matter where they are registered? So if they are registered in a jurisdiction that only charges 1% tax, they owe the remaining 19% to the UK Government.

Or just do what France (and the US) do and tax them on all earnings here and abroad, no matter where else they pay tax.

[LadyDeliah]

They would still need to do something about the dodgy selling stuff to different parts of themselves though.

[LondonMix]

Most investment funds go as far as getting a tax ruling from the authorities in most jurisdictions specifically approving their tax strategies and structures. This is necessary due to general anti-evasion rules in Europe which no one wants to be ensnarled in. Also, it?s part of the fiduciary responsibility.

Please forgive me if I now find all this posturing hypocritical. I?m sure some MPs that don?t work specifically on such issues were totally unaware but let?s get real. The S&P 500 in the US pay an effective rate of tax of 12%. No one with half a brain can credibly say that they were unaware that virtually all companies use the various schemes that have been made available to them to reduce or virtually eliminate tax.

The current proposition to cut small business tax rates (in general, not for any specific industry or goal) to stimulate growth is another example but of course this is acceptable to most people and not a scandal.

I am not against corporate income taxes by the way! I think depending on how the revenue is used it could make sense but I also recognize it comes at a cost.

[LondonMix]

LadyD- the gov't very well could. They don't want to. They have reasons for not wanting to of course which you may or may not feel are valid but there is nothing stopping them.

[Jeremy]

I think people are absolutely right to be angry about companies not paying their tax.

But I hope these people also never pay a trademan cash-in-hand.

[????]

Though you have a point Jeremy - that's not corporate plus it 'normally' -polish builders aside, maybe - goes into the UK economy in one way or the other.....rather than enriching US shareholders who in some cases who are geeky billioniarres from San Francisco

[LondonMix]

Okay so VAT and income tax evasion are okay (cause it all stays in the UK) but for foregin companies it wrong because the benefits aren't accrued in the UK?

Sorry but that isn't the case. If the industries foreign companies operate in are competitive (many actors and low barriers to entry) and ?savings? from not paying tax will be competed away until profits return to the minimum required for no new actors to enter the sector. The entry of additional businesses is what competes down the price. Therefore, the idea that no benefits accrue in the UK when foreign businesses don?t pay tax is not correct. Again, that?s not to say they should not pay tax, but the consequences aren?t what you are describing.

[DaveR]

"What you are describing DaveR is more akin to tax evasion and is usually covered in most countries by general anti-evasion rules."

No, you are mixing up evasion and avoidance. In the UK a tax planning scheme would only be considered evasion if it didn't genuinely attempt to comply i.e. the transactions or arrangements were a sham, as opposed to being artificial but still involving genuine parties and having real legal effect. Anti-avoidance rules on the other hand, in the UK at least, are based primarily around a duty to disclose, but they do not prevent even very aggressive avoidance schemes from succeeding in their object, provided they are structured carefully enough. This may change if the proposed GAAR comes into effect in 2013 (http://www.hm-treasury.gov.uk/tax_avoidance_gaar.htm)

It's not posturing or hypocritical to say that paying tax in your country of residence (if you are an individual) or country of operation (if you are a corporate) is part of the basic social contract and to seek to avoid doing so by taking advantage of artificial arrangments that have no other purpose is unethical. HMRC however work in the real world and do what they have to do to get as much cash in as possible. Don't confuse what they do and say with government policy, however.

[LondonMix]

By more akin to evasion I meant illegal as its captured by general anti-evasion / anti-avoidance legislation in most countries as I said. The tax arrangements that most firms go into are nothing like that. In fact, if in doubt they will get a ruling from the tax authorities certifying that they are using the law as intended and are not exploiting / misusing it (Spain, Germany, France etc this is very common practice). That is the only distinction I was trying to make. If a tax structure appears to the authorities in most countries to exist solely for the purpose of avoiding taxes the authorities want to collect, it won't be valid.

I am not arguing about whether corporations should pay more corporate income tax- I've already made my position on that clear.

I think policy makers feigning shock are hypocrites, you don't, fine. HMRC do not sanction what they view to be illegal arrangements ever for the sake of operating in the real world. There is tax law. It can and is changed all the time in many places to increase the effective rate of corporate income tax (Germany in the last few years is a good example with new thin cap rules and limitations on tax losses that can be used to offset profit). You can create minimum taxation rules, increase substance test etc. When a country wants corporations to pay CIT, they can do it. Not all countries have tax treaties with tax havens and many countries have them with only certain preferred ones!

I?m not accusing the politicians of wrong-doing or corruption. There are reasons why governments want to reduce the effective rate of tax that you as a voter / consumer may or may not find valid.

[DaveR]

"If a tax structure appears to the authorities in most countries to exist solely for the purpose of avoiding taxes the authorities want to collect, it won't be valid." - not in the UK, hence the proposal to introduce a GAAR.

"HMRC do not sanction what they view to be illegal arrangements ever for the sake of operating in the real world" - no, but they do make careful judgments as to when to fight, when to settle, and when to walk away, based not on their view but on the view they expect a tribunal to take.

"Not all countries have tax treaties with tax havens and many countries have them with only certain preferred ones!"

Enough countries do for it to be a significant global issue: http://economia.icaew.com/business/december-2012/buried-treasure-tax-havens

I agree with you regarding the hypocrisy of politicians, however, and you are also right to say that at the moment little effort is going into distinguishing between companies who are engaged in aggressive avoidance and those who don't pay a lot of tax for other reasons.

[LondonMix]

The introduction of general anti-avoidance rules in the UK is a good thing. On that we certainly agree.

HMRC is guided by tax law and hence the tribunal. General anti-avoidance which exists in many other countries will give them even more bite to make challenges but the real issue lies in the intentional breaks provided in tax law more than those pushing things to the point of near evasion.

Tax havens are a global issue. My point is, the UK doesn't need to have a tax treaty with the Channel Islands and Isle of Man for any practical reason. Most countries don't need one with these islands. The UK actively chooses to have a tax treaty there. It's not part of some con-game by corporations but part of government policy.

I think we more or less agree. I just think the government is much more of an active participant in the low effective tax rate corporations pay than you do. And I also can see that it?s a judgment call (rather than purely a moral one) given that there are benefits and downsides for the UK public to imposing higher taxes on businesses.

[Salsaboy]

Jeremy, are you implying that paying 'cash in hand' will go straight into the pocket without being declared as income? If you employ a tradesman 'cash in hand' it's no business of yours what that tradesman does with the money. You are not liable in their financial affairs and the transaction is between you and the tradesman, not you, the tradesman and HMRC.

I'm a self-employed tradesman and to be honest, cash is a pain in the arse. I still have to take it to the bank to get it into my account (ALL of it goes through my books) and I much prefer an electronic transfer straight into my bank account.

Jeremy Wrote:

> But I hope these people also never pay a trademan

> cash-in-hand.