HMRC taskforce checking property rentals E.Anglia,London,Yorks & NE

propertyman

phill99 wrote: »

What absolute bullsh1t. Boots aren't going to shut down their shops and move them abroad,neither will Vodafone.
You're evidently sucked in by the Cameron white washing brigade whose only objective while he is in office is to line the pockets of his Etonian cohort.
Get with the programme for Gods sake.

Can I suggest that your rudeness let alone your naivety is caused by your lack of meat intake.

This is not a Cameronite phenomenon, it is as old as Society. A businessman, a vendor or roaming Knight sold their vegetables or services to those that offered them the best package.

That extended to which town offered the best deal and now it is a question of countries. Airports today compete for the business of airline routes and airlines after all, the BAA having been broken up by New Labour. Tesco have their HR and payroll in India for many years now.

Boots and Vodaphone counter staff might not leave, but customer service tech support and most admin functions, including purchasing, even the distribution of on line purchased handsets, can be shipped off shore

If you haven't been buried in the Socialist Worker or the Grauniad you will have seen this happen since the 1950's,
- the many utility company mergers in the 2000's or
-the huge number of companies that have outsourced while New Labour were in power, or
- the rock stars bemoaning the payment of fair tax by all while seeking haven in Ireland and Holland.

Or if you weren't too weak from peace porage, seen that Walgreens acquired a controlling interest in Boots. No doubt the precursor of an immediate saving by combining back office functions carried out in Mexico and India.

Programme... BWL

propertyman

The answer is simple, simplify the freakin' tax code.

FTBFun

phill99 wrote: »

Amazon has had a revenue in the UK of over £2.5 billion in the last 3 years but has never paid a penny in tax to the British Government. I can't help thinking if all the large companies paid their fair share of tax (Boots, Vodafone), then HMRC wouldn't have to spend so much of their resources investigating the small fry which will end up yielding very little in the big scheme of things.

Revenue doesn't equal profit, which is ultimately what is taxed.

BTW HMRC themselves (and the Guardian, who have been banging the tax evasion/avoidance drum for a while) have both taken advantage of offshore schemes to avoid SDLT on the purchase of premises, so you can see why its not as open and shut as you appear to think it is.

I think the GS avoidance of an interest bill is disgraceful btw, and am glad its being looked in to.

grey_gym_sock

FTBFun wrote: »

Revenue doesn't equal profit, which is ultimately what is taxed.

the problem comes with how profits are apportioned between different countries.

when a company/group operates in many countries, the current rules treat their operations in each country as separate entities, and attempts how decide how to tax each in isolation. in practice, this gives many companies ample opportunity to declare very low profits everywhere except in tax havens.

the theory is that, when goods/services are shifted between companies in the same group, "transfer pricing" is applied by the tax authorities, i.e. regardless of what is paid for the goods/services, they are treated as being transferred for their open market value. the problem is that for many things, there is no relevant open market to compare with at all; or if there is one, pricing data is hard to come by.

transfer pricing doesn't work; it should be scrapped. an alternative is to calculate the total profits for a group of companies, and then apportion it among countries based on a formula.

one possible formula is to apportion 1/3 of profits based on where sales are made, 1/3 on where the group has employees, and 1/3 on where it has assets. e.g. if you apply that to amazon's UK sales, on which they declared a tiny profit in the UK and a huge 1 in luxembourg, you get a more sensible result (i.e. most of the profit in the UK): http://www.taxresearch.org.uk/Blog/2012/04/05/how-to-put-a-stop-to-amazons-tax-games/

that's just 1 idea for a formula, but some kind of formula for apportioning profits is going to work a lot better than the transfer pricing regulations.

the idea that we can't tax companies properly or they'll leave the country is nonsense. amazon operates in the UK because there are ppl who buy books here. i'm not particularly attacking amazon, btw. as long as we have a tax system with huge loopholes, companies are going to use them. we need to fix the tax system.

propertyman

To say that the tax revenue vs jobs is nonsense, is itself, a nonsense. It is too often considered in simplistic absolute terms. Even if you adopt what is suggested, the jobs and the additional revenue they generate from tax, employment and spending, is still lost.

It also ignores the fundamental principle of business, to make a profit. Unless the business wants to specialise in one area the owners will divert their investment funds to other businesses.

In order to maintain revenue, prices simply get increased.

It is daft to take business or tax revenue as for granted, it is a complex relationship.

vax2002

Tax always is and always was.
For surfs.

propertyman

FTBFun wrote: »

BTW HMRC themselves have taken advantage of offshore schemes to avoid SDLT on the purchase of premises, so you can see why its not as open and shut as you appear to think it is..

Does noone see the fundamental problem here!

Why on earth does a Government department be liable for tax that it collects itself and pays to itself. All money the government had in the first place!
But in the process moved it around to get back pennies on the pound back because of the admin costs. And the cost of taking it into shelter.

It serves no purpose other than to employ people.

N79

We've had two tax inspections in the last decade so this is not something new (I guess we are considered "high risk":cool: ). Hopefully, HMRC are now targeting the evaders (the people who are not registered, have no records etc) but thsis

The teams will visit traders to examine their records and carry out other investigations

from TBS's post suggests that they will take the easy route of re-inspecting those companies which operate in the open. I suspect, but it is only an opinion, that tax evasion in the rental sector is worst in the "hidden" cash in hand rental market where properties are advertised locally etc so following up the trail is hard work.

tbs624

N79 wrote: »

We've had two tax inspections in the last decade so this is not something new (I guess we are considered "high risk":cool: ).

What *is* apparently fairly new is the Task Force set-up: the first round of their investigations hit the restaurant trade last year. HMRC say the Task Forces

"bring together various compliance and enforcement teams for intensive bursts of activity targeted at specific sectors and locations where there is evidence of high risk of tax evasion."

Scrap metal dealers and construction industry are other targets

Hopefully, HMRC are now targeting the evaders (the people who are not registered, have no records etc) but thsis from TBS's post suggests that they will take the easy route of re-inspecting those companies which operate in the open. I suspect, but it is only an opinion, that tax evasion in the rental sector is worst in the "hidden" cash in hand rental market where properties are advertised locally etc so following up the trail is hard work.

I agree with N79 about the easy route but it does sound as though there is also to be a tracking of local property for rent adverts and so on.

N79

tbs624 wrote: »

I agree with N79 about the easy route but it does sound as though there is also to be a tracking of local property for rent adverts and so on.

If they do track local adverts then that's an improvement. I guess the next issue is how much tax is actually being evaded vs the cost of enforcement - it will be cost effective if a LL holds a number of properties but against single properties with costs the tax evaded may well be less than the costs of an investigation. Still, that's no reason for not moving against small time evaders and a few scalps may well encourager les autres.