Why is it apparently so difficult to get the big corporations to pay more tax?

drc

In the news this week - Starbucks, Ebay, Ikea etc all paying very little tax by offshoring their companies subsidiaries in places like Luxembourg. The UK is missing out on hundreds of millions in tax that these companies would be paying if they weren't using elaborate accounting practices to get around paying it.

Why is this loophole so hard to close? Surely the government could close it if they wanted? What are these companies going to do if they were told they had to pay corporation tax on all profits made in the UK - close all their stores in spite and lose all the money they make from the UK? The government should call their bluff.

The_White_Horse

probably a good part of it is that the big companies employee the best of the best to handle their tax and HMRC have all the lefty morons in their employee that the Big 4 would laugh at before showing them the door. Any accountant worth their salt works for an accountancy firm or industry. Those that can't hack it go to HMRC. Same with the GLS.

drc

The_White_Horse wrote: »

probably a good part of it is that the big companies employee the best of the best to handle their tax and HMRC have all the lefty morons in their employee that the Big 4 would laugh at before showing them the door. Any accountant worth their salt works for an accountancy firm or industry. Those that can't hack it go to HMRC. Same with the GLS.

Are you an accountant by any chance ?

ILW

They tend to be international businesses.

A._Badger

Well, it might help if there wasn't quite such a cosy relationship between the poachers and the gamekeepers!

http://www.bbc.co.uk/news/business-16253205

Thrugelmir

drc wrote: »

if they weren't using elaborate accounting practices to get around paying it.

The Companies aren't. Everything they do is above board.

No different to an individual trying to minimise their tax bill.

Just because they don't pay UK corporation doesn't mean that they pay no tax.

Vote with your feet and boycott their products.

chewmylegoff

drc wrote: »

In the news this week - Starbucks, Ebay, Ikea etc all paying very little tax by offshoring their companies subsidiaries in places like Luxembourg. The UK is missing out on hundreds of millions in tax that these companies would be paying if they weren't using elaborate accounting practices to get around paying it.

Why is this loophole so hard to close? Surely the government could close it if they wanted? What are these companies going to do if they were told they had to pay corporation tax on all profits made in the UK - close all their stores in spite and lose all the money they make from the UK? The government should call their bluff.

It's not difficult to get companies to pay tax, and they are doing nothing elaborate to avoid payig taxes, they simply take advantage of the way the system works. Change the law and they'll have to pay more tax. E.g. Starbucks don't pay CT because their US parent company levies a massive charge on the UK subsidiary for use of its brand name, which effectively transfers the UK profit to the US. All the govt needs to do is make that charge not a tax deductible expense, job done.

techspec

How ironic that the tax man was recently roaming MSE looking advising Ebay sellers on their tax obligations - when the biggest tax dodger was right under their noses.

http://www.bbc.co.uk/news/business-20022365

Disabled people have commited suicide because of cuts - and the rich just party on like theres no tomorrow - with tax payers money. Makes you sick.

HAMISH_MCTAVISH

Why would anyone want to pay more tax?

Because of course, no business pays tax..... They only collect tax from consumers on behalf of governments.

Corporation tax is just the government taking a second slice of the pie, and in doing so they're taking it from your ISA, pension fund, etc.

So why would anyone want businesses to pay more tax? As it only means you end up paying more for goods and services, and your pension scheme or shares ISA gets less as well.

ILW

HAMISH_MCTAVISH wrote: »

Why would anyone want to pay more tax?

Because of course, no business pays tax..... They only collect tax from consumers on behalf of governments.

Corporation tax is just the government taking a second slice of the pie, and in doing so they're taking it from your ISA, pension fund, etc.

So why would anyone want businesses to pay more tax? As it only means you end up paying more for goods and services, and your pension scheme or shares ISA gets less as well.

These companies do pay tax though, just not here.

ILW

chewmylegoff wrote: »

It's not difficult to get companies to pay tax, and they are doing nothing elaborate to avoid payig taxes, they simply take advantage of the way the system works. Change the law and they'll have to pay more tax. E.g. Starbucks don't pay CT because their US parent company levies a massive charge on the UK subsidiary for use of its brand name, which effectively transfers the UK profit to the US. All the govt needs to do is make that charge not a tax deductible expense, job done.

How could that be legislated for?