Ethical shopping/ tax avoidance

[Jeremy]

Just to echo DaveR... I simply don't understand how anyone could make a comment such as there is no such thing as "tax avoidance within the law". It's defined by the HMRC, which I believe have greater authority on UK tax than "Gray off the EDF".

The issue is that you seem to think such practices are fine, since they are within the law. And I'm sure some other people would agree with you... I just don't happen to be one of them!

[Mick Mac]

El Pibe Wrote:

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> I may be wrong but the problem isn't that these

> companies are paying 0 tax, just not paying it in

> the countries they earns it from. Swelling dublins

> coffers whilst denying Londons.

> Some may call this karma.

Its both EP, means of moving elements of profitability to jurisdictions with lower taxes has always been subject to transfer pricing rules but there is a fresh focus on this area by the various governments who are well aware of the issues of where tax should correctly be paid and are deep in a process intended to achieve unilateral agreement on the basic principles and ideally could result in a unilateral tax agreement which sits above the various Bi country agreements that have existed for some time.

The process is called Base Erosion Profit Shifting, its conclusion is still 18 months off but no one should think that governments are not taking action on this.

Avoiding tax will become more difficult, there is no doubt about that.

[StraferJack]

good article I read last week about countries like Ireland playing the cute tax game (and how it will bite them if they aren't careful)

http://www.davidmcwilliams.ie/2014/06/24/ireland-needs-a-new-tax-reality

[Earl Aelfheah]

This is nonsense. Plenty of people could avoid paying more tax than they do, but choose not to go down that path because they believe in complying with the spirit of the law and in contributing fairly to the system. Many also vote for left wing parties, who traditionally believe in higher taxes and better funded public services, because they believe it to be (not necessarily in the personal financial interest, but) the good of society.

Gray Wrote:

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> Sorry, no.

>

> Tax Evasion is what it says on the tin, and is

> breaking the law as written today.

>

> There is no such thing as "tax avoidance within

> the law". Thats a non sequitur.

>

> The law as written today allows free movement of

> capital as mentioned. If it wrong in most peoples

> eyes as you state, then the criticm should be

> directed toward the people who make the laws, not

> the people who act upon those laws.

>

> I assume you pay as much tax as you lawfully must

> do, and no more? Or do you pay whatever spare cash

> you have left each year to the taxman as a free

> bonus? After all, thats ethical. Think of the

> teachersandnurses...

[El Pibe]

I was just making a point that people were talking about ethics because it's often reported here that these corporations are paying no tax at all, when in reality the picture is more complicated, especially for large transanational corporations where your robot hoover bought on a .co.uk website may in fact be coming to you from a french warehouse, or even a romanian reseller.

Amazon bad is a bit simplistic, but certainly it would be sensible to tighten up the rules.

I may be very wrong, as I'm as far from being an accountanat as is humanly possible, but aren't 'loopholes' usually rules put there for good reasons that get exploited by clever bastards, probably with a degree of disingenuity?

[El Pibe]

intersting article SJ, so less loopholes than dodgy preferential back room deals?

[*Bob*]

I wonder how many people do/would change their opinions on tax when/if they found themselves moving up into the higher bands? Humans are inherently selfish, after all. Look at children: they're born selfish - parents have to try and knock it out of them.

I pay what I owe of course, but unfortunately I confess I can't manage it with a happy clappy huggy pink fuzzy feeling. It's like a red-hot poker up the rectum.. every time.

There, I've said it. I'm a bad person.

[david_carnell]

V true *bob* - but then at this year I came to really need the NHS.

A bad injury to my 2yo son meant repeated trips to A&E, a paeds burns unit, consultants etc.

Aside from a bus fare to Chelsea it cost nothing. Even his pescriptions for some special dressing would have cost close to ?100 bought over-the-counter and again cost nothing. I've never before been so grateful for such a service.

Now, when I feel glum every pay day as I lose a third of my income I only curse the damned student loan company and not the tax man.

Amazon UK use British roads to transport their goods. They use British educated workers to man their warehouses. They use British councils to collect their rubbish. British power stations to power their machines. The British postal service to deliver their trinkets.

They can pay tax in Luxembourg without qualm once those issues are resovled. Until then they should pay up like (nearly) everyone else.

If you want books - buy from one of the number of bookshops locally. None have business addresses in Grevenmacher.

[El Pibe]

I dunno, you just calculate your income from your take home. I never really look at the tax paid column and ever think of it as my money as such. When negotiating a wage in a new job you do a bit of mental arithmetic and work out what your real wage is andd go for that.

But then I've always been paye, rather than self-employed where you have to write the damn cheque (on some pittance of a tax rate you ingrate!!)

[*Bob*]

Obviously I understand the reasons & benefits.. I'm not that mad. I just can't lay claim to the 'with a glad and willing heart' stuff.

Psychologically, it's probably a little easier on PAYE.

[david_carnell]

Ah - yes. If you're self employed I reckon it must be much more of a kicker.

[El Pibe]

But their british lorries will pay british taxes, the bins and education will come from the local taxes and rates they pay, the workers will be paid and pay income tax on those wages, the book you buy may well (lmost certainly in my case) come from a local (just not local to me) bookshop acting as a reseller, an important income stream.

And you may well live in the middle of bloody nowhere and face either using amazon or having a 2 hour drive to bloody dublin ;-P

[Jeremy]

I'm on PAYE but still have to fill in a tax return... and almost always it turns out that HMRC think I owe more than I've paid throughout the year so I have to pay a lump sum. Now THAT really sucks, because it's money that you thought you had in the bank.

I guess the point is that no normal person likes paying tax... it doesn't make you feel good about yourself, the same way that it does when you put a tenner in the charity collection box. That's fine, nothing to feel guilty about, almost all of us could do with a few extra quid. But it's a bloody big leap from there to actively squirming your way out of paying your fair share by transferring money out of the country or paying it into a dummy company.

[*Bob*]

When you're on a low (/no!) income - which I was for a fairly long spell - it's easy to not be annoyed about tax, because - let's face it - you don't really pay much of it. It's easy imagine you'll be all groovy about paying more when you've got it, no worries, fair's fair.

Red hot poker. Rectum.

[david_carnell]

El Pibe Wrote:

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> But their british lorries will pay british taxes,

> the bins and education will come from the local

> taxes and rates they pay, the workers will be paid

> and pay income tax on those wages, the book you

> buy may well (lmost certainly in my case) come

> from a local (just not local to me) bookshop

> acting as a reseller, an important income stream.

>

> And you may well live in the middle of bloody

> nowhere and face either using amazon or having a 2

> hour drive to bloody dublin ;-P

You're just playing devils advocate, right?

And there are other bookstores that deliver you know....the LRB for instance. I'm sure Ireland has something similar without you driving to Dublin.

[El Pibe]

Genrally I've had tax back (usually because i've taken sabaticals with the kids), but if its ever the other way they usually give me a nastier tax code, so it's absorbed via paye again.

writing that cheque must definitely be red hot poker bum time!!!

[El Pibe]

You're just playing devils advocate, right?

yeah, and no, just saying its not that simple. Government has been lenient on big corporations for the reason that they generate wealth even if they don't pay enough tax on the profit.

There are nice bookshops in waterford and wexford (20 aqnd 40 miles respectively), I'll buy stuff that looks good, but they'll never have anything that I'm looking for.

Electronics...in Ireland....double the price, sod that just to be parochial!!!

[Mick Mac]

El Pibe Wrote:

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> I was just making a point that people were talking

> about ethics because it's often reported here that

> these corporations are paying no tax at all,

The intended measures will make it less about ethics with less need for judgement calls. There will be a significant increase in the amount of information provision with the intention that there will be an increase in the knowledge base of the tax authorities and an increased fear of consequences of avoidance.

There will be more visibility to tax authorities generally, more cooperation between jurisdictions to deal with multi national companies and funds etc. and more information on ultimate beneficial owners, higher levels of substance will be needed to achieve the benefits of tax treaties etc.

To the extent that there is still scope remaining on any tax decisions for any ethical considerations to be relevant, the people making those decisions will now be in no doubt about the intentions of the tax authorities and the consequences of making the wrong call.

[El Pibe]

errmmmm, does that mean 'fess up or big trouble'?

[Mick Mac]

No, its forward thinking, make the right decisions going forward. No opportunities to fess up.

In the event of an enquiry, where you are found to have made the wrong call/adopted an incorrect practice you pay all of the taxes you owe, the only mitigation for any cooperation with the authorities relates to the level of additional penalty applied.

edited to say: Tax authorities across Europe are attacking companies for huge amounts of avoided tax as it stands.

[Otta]

As an aside, sorry to hear about your boy DC, sounds like a horrible experience. For different reasons my daughter has also made me very grateful for the NHS.

[david_carnell]

Cheers fella. He's fine now - wouldn't know anything had happended to him.

But more than once during the process, having received exemplary care at a world class level and not even thinking about the cost, did MrsDC and I look at each other and give thanks.

[StraferJack]

"When you're on a low (/no!) income - which I was for a fairly long spell - it's easy to not be annoyed about tax, because - let's face it - you don't really pay much of it. It's easy imagine you'll be all groovy about paying more when you've got it, no worries, fair's fair.

Red hot poker. Rectum."

maybe it is the PAYE vs writing the cheque yourself but after many years on no money, many more years on some money, and a few years on higher rate tax I can honestly say I am less annoyed about tax than I ever was on less money. But it feels as if saying that is to invite "holier than thou comments". But to not say it is to leave the floor to people who only ever say "I really mind paying tax"

i don't understand why I am supposed to mind paying tax more when I have money (well, to take home anyway - spare money is another thing)

is it because Im supposed to look at the amount I pay in tax in 2014 and go "wow, that's a lot more than I ever used to earn back in the day - that's crazy!"?

But we are noticing the effects of cutbacks now right? We aren't missing the extra bodies sleeping rough for example?

[????]

..yup, but the cutbacks are cutting back on money we didn't have to spend and were borrowing to pay for not cos atx has gone south. Tax for most of us in London is still higher than in 2007 for example, especially if you throw in indirect tax (vat for eg). The only people who have had any tax cut since 2007 (note I said 2007 not 2011...but people will still jump) are the lowest paid in employment through increase in allowance (rightly). I too am (admiitedly just about) ok with the tax I pay, but do expect value from it.......

[*Bob*]

I wish I felt better about it. I've got nothing to complain about. I should feel satisfied with my (relatively) comfortable lot and be at peace with the taxation system.

Unfortunately it's a knife in my very heart, twice a year.

I should try yoga or something.