Question on buying from Amazon

[markjay]

Low paid workers and those on zero hour contracts will often also have to receive benefits on top of their salaries in order to survive.

Presumably whatever these people will be paid in income support will be far less than what they would have been paid in benefits if they were unemployed - so net saving to the government?

I'm not suggesting anything - I'm reading the article. I quote:

"The £2.4m tax bill was just below the £2.5m aid it received from the Scottish government last year to expand its warehouse operations in Dunfermline and Gourock."

And since much of this work will pay minimum wage (and quite possibly on a zero hours contract as pointed out earlier) then the income tax and NI raised will be rather low I'm afraid.

Perhaps so, but you are conveniently ignoring the VAT revenue.

 

[PXW]

There is still employers NI (typically at 13.8%), regardless of how much tax/NI is levied on the employee.

The article, in common with most of its type, seeks the dramatic headline and misses the underlying realities. It confuses turnover with profit, as has been said. The grant Amazon received would have been drop in the ocean of the capital costs to establish and expand the facility - a facility which will be there for many years to come, unlike the subsidy. The profits taxes may well be low precisely because they have invested heavily in plant and equipment in the UK - generating ongoing tax allowances that are typical of pretty much every tax jurisdiction.

I could go on - but I've had this debate on this forum before. This stuff is my job, and I've done it both for companies and for HMRC at a senior level. All I would say is read the OECD papers on BEPS for what governments (with the support of industry) are trying to do about this OECD BEPS. And don't read anything put out by Margaret Hodge, unless it happens to explain the very low effective tax rate enjoyed by her family's company (which she says is nothing to do with her).

 

[Scott_F]

Presumably whatever these people will be paid in income support will be far less than what they would have been paid in benefits if they were unemployed - so net saving to the government?





Perhaps so, but you are conveniently ignoring the VAT revenue.

I'm not ignoring anything - of course Amazon will pay some tax of various types.

My issue is the amount of time and money they spend in order to ensure that they pay as little as possible to HMRC whilst reaping the considerable benefits of doing business here.

 

[Stratman]

..................................

My issue is the amount of time and money they spend in order to ensure that they pay as little as possible to HMRC whilst reaping the considerable benefits of doing business here.

Well who would want to pay more tax than they need to

Anyone who has an ISA, Premium Bonds or a contributory pension scheme to name but a few is avoiding tax. The amounts may be different but the principle is the same.

 

[markjay]

Amazon are getting bad press because they are alegedly exploiting variations in tax policy between countries to maximise their financial gain over their international operations.

But the fact remains that Amazon generates massive amounts of revenue for HMRC, which far exceeds whatever grant it received from the government. £2.5m is probably the amount Amazon raises in taxes in just one day - every day.

So yes, perhaps they should have paid more, but at the same time we should be honest and give people the whole picture to make up their own minds.

 

[Scott_F]

Well who would want to pay more tax than they need to

Anyone who has an ISA, Premium Bonds or a contributory pension scheme to name but a few is avoiding tax. The amounts may be different but the principle is the same.

An ISA, a contributory pension scheme and premium bonds are structured financial products which are universally available.

Corporations like Amazon spend vast sums to create ever more complex loopholes in tax regimes globally and thus save themselves even greater sums.

The difference is obvious.

 

[Stratman]

It's not obvious at all. It's taxpayers using whatever means are available to them to reduce the tax they pay.

As I've repeatedly said, don't blame those using the tools available, blame the legislators for allowing it to happen.

 

[Scott_F]

It's not obvious at all. It's taxpayers using whatever means are available to them to reduce the tax they pay.

As I've repeatedly said, don't blame those using the tools available, blame the legislators for allowing it to happen.

But that's the whole point - big corporations aren't "using the tools available".

Instead, they use their vast financial muscle to create their own tools that are only available to them and their ilk.

 

[Stratman]

We're clearly not going to agree. I'll leave with saying if governments wanted to stop what they're doing, really wanted to, they could.

 

[IanA2]

We're clearly not going to agree. I'll leave with saying if governments wanted to stop what they're doing, really wanted to, they could.

Quite.

 

[markjay]

And what about the loophole allowing Britons to retire in Spain and avoid paying tax on their UK Pensions...?

 

[IanA2]

And what about the loophole allowing Britons to retire in Spain and avoid paying tax on their UK Pensions...?

Sounds good..I'm off to Spain.

If the rules allow it, why not. If folks want to live by what they see as a higher standard then fine, they can get on with it.

 

[Meldrew2]

Remember, if you are using a tradesman, cash is tax free. Between you and me, you can forget the vat too.......

 

[Scott_F]

Remember, if you are using a tradesman, cash is tax free. Between you and me, you can forget the vat too.......

Most small tradesmen aren't VAT registered.

 

[IanA2]

Remember, if you are using a tradesman, cash is tax free. Between you and me, you can forget the vat too.......

That's fine in theory for small jobs, but cash generally means no receipt which equates to no comeback. You still pay the VAT on materials.

 

[RBYCC]

Corporations like Amazon spend vast sums to create ever more complex loopholes in tax regimes globally and thus save themselves even greater sums.

The difference is obvious.

A corporation cannot "create" a loophole unless it exists in the tax code....
Blame it on the government who created the tax rules and regulations.

Tax codes vary from country to country but they are all very complex.
It's this complexity that allows for "loopholes" in defining what the intent of the code means.
Oft times the legislators or creators of laws and regulations "out think" themselves and fall victim to the law of unintended consequences !!!

Using a loophole for a corporation or individual is no more than being fiscally responsible to yourself or your shareholders.

Ed A.

 

[markjay]

I think we may have touched here on a wider agenda, and this is the anti-globalisation sentiment shared by some members here.

Without going into the globalisation issue, I think we should all be honest and think again whether the objection is to tax avoidance schemes in general (even when practiced by individuals), or to Amazon in general (and the tax issue is just another opportunity to have a poke at a large multinational company).

 

[Scott_F]

A corporation cannot "create" a loophole unless it exists in the tax code.....

Of course they can - that's why they spend fortunes on armies of very clever accountants who dream up new schemes that no one has ever thought of before.

Blame it on the government who created the tax rules and regulations.

Errr.....no - blame it on those unethical institutions who choose to use their huge wealth to buck the system.

Using a loophole for a corporation or individual is no more than being fiscally responsible to yourself or your shareholders.

If you advance that argument then you forfeit any right to criticise those MPs who abused the expenses system. Both they and these tax-avoiding institutions work within the rules and both have displayed a sad lack of any moral compass whilst doing so.

 

[IanA2]

One of the reasons the tax structures are set up in this country the way they are, is to encourage inward investment. So, it works, what happens, folks complain. Well go and live in another Eurozone country where the unemployment rates are eye-watering with all the pain and misery that goes with les chômeurs, i disoccupati, los desempleados

 

[markjay]

Firstly... you can create a tax avoidance scheme based on an existing loophole, but you can't create the loophole - only governments can do that.

Then, MPs simply lied about their expenses, no loophole there.

As unpalatable as this may be to some, the fact remains that none of these arguments - that companies can 'create' loopholes, or that MPs cheating by fiddling expenses can be called 'tax avoidance scheme' - pass the common sense test...