Should Tax avoiding firms be named and shamed

vivatifosi

antrobus wrote: »

The UK govt knows why. Because CT rates are lower there.

We have rules on transfer pricing. I believe HMRC have already had some success in negotiationg down the level of the Starbucks management fee.

Isn't that what Georgie Porgie is trying to do?

In which case Georgie and the HMRC should do a better job of exercising it. If they should be able to do it with what they've got but can't, then they've either got to change the laws, or make changes to the people enforcing them.

vivatifosi

Sorry, also should have said in answer to the OP, accounts of large companies in particular are a matter of public record. They can't file abbreviated accounts if their turnover is too high. So it ought to be possible to take one of the financial databases such as FAME, run, say, the top 1000 companies in the UK and then sort by pre-tax profits/PBIT. If they aren't making a profit, then they will be at one end of the list and will hint as to who's not paying. Then you can look at the ultimate holding company to see where they are based. This is not a difficult exercise and doesn't rely on the government to release the data. Of course it then requires further analysis as the company may be experiencing genuine hardship, not just making transfer payments.

Anyone working in London could walk into the City Business Library and run this search. They could do it at the British Library too, but they'd need a reader's card there.

nicko33

somethingcorporate wrote: »

The only thing that differs is the scale.

And where the money ends up.
They don't avoid paying tax, they avoid paying it in this country by paying a smaller amount somewhere else.
So UK consumer's money ends up supporting Luxembourg or Switzerland or Eire's community

BertieUK

grizzly1911 wrote: »

Tax-avoiding firms should not be named and shamed, says minister Danny Alexander refuses to endorse MPs' suggestion that companies failing to pay fair share of tax be publicly identified



A senior minister has ruled out the naming and shaming of companies that are paying little or no corporation tax.


Danny Alexander, chief secretary to the Treasury, said such a move was not a good idea because it would breach taxpayer confidentiality.

Two days afterbeing appointed to his new position, the Daily Telegraphnewspaper published front-page allegations that Alexander had exploited a legalloophole to avoid the payment of capital gains tax on a property he had soldin 2007 alleging that he had profited from a "morally dubious"loophole to avoid paying capital gains tax.

Alexander hadbought the property, a London flat, in 1999 and, after being elected toparliament for a Scottish constituency in 2005, designated the property as his"second home" while claiming that his first home was now in hisconstituency.

The property wasthen sold in 2007 for a profit on which he paid no capital gains tax. As theproperty was the only one he owned, up until 2006, HM Revenue andCustoms rules meant that capital gains tax was not payable as shouldsomeone find a buyer for their home within three years the property qualifiesfor relief from [capital gains tax] as long as the property has been the onlyor main home at some point.

I did read that Alexander excelled at Maths at school as well.

CLAPTON

BertieUK wrote: »

Two days afterbeing appointed to his new position, the Daily Telegraphnewspaper published front-page allegations that Alexander had exploited a legalloophole to avoid the payment of capital gains tax on a property he had soldin 2007 alleging that he had profited from a "morally dubious"loophole to avoid paying capital gains tax.

Alexander hadbought the property, a London flat, in 1999 and, after being elected toparliament for a Scottish constituency in 2005, designated the property as his"second home" while claiming that his first home was now in hisconstituency.

The property wasthen sold in 2007 for a profit on which he paid no capital gains tax. As theproperty was the only one he owned, up until 2006, HM Revenue andCustoms rules meant that capital gains tax was not payable as shouldsomeone find a buyer for their home within three years the property qualifiesfor relief from [capital gains tax] as long as the property has been the onlyor main home at some point.

I did read that Alexander excelled at Maths at school as well.

Although I rather dislike Alexander, I can't immediately see what was wrong with this or why it is a loop hole.
If he had kept it designated as his main home then it would also have been cgt free upon sale.
The benefit he may gain is when he sells his constituency home.



In my view there is a considerable difference between tax reduction where it is clearly parliament's intention (ISAs, second home cgt issues, pension tax relief, salary sacrifice etc ) and tax reduction where it was clearly never parliaments intention (Startbucks , Amazon etc).

System

nicko33 wrote: »

So UK consumer's money ends up supporting Luxembourg or Switzerland or Eire's community

That's the UK's choice. We set an uncompetitive tax regime which has the predictable consequence that companies take their tax custom elsewhere.

If you want people to come and pay our taxes you have to lower them to a level that can compete internationally.

Mallotum_X

somethingcorporate wrote: »

It is the same thing.

Both are within the rules, both are tax avoidance and none of it is against the law.

The only thing that differs is the scale.

Agreed both currently within in the law...

However its the scale and influence of the larger firms that is the concern, they are able to influence government policy far easier than the isa savers.

The intention of the government is also different, with Isa's the intention is to get people to save, the intention is not (or should not) be to allow Google etc not to pay tax.

With Isa's its a level playing field, anyone can take advantage, with large corporate tax avoidance only the large firms can take advantage.

Individuals are not able to create artificial structures to take further advantage, and this artificial nature of trading should be where the attention is drawn. Starbucks shuffling coffee through Switzerland for example.

The very fact that the scale is so large and those taking part can directly influence decisions of HMRC and ministers makes it a different issue.

CLAPTON

Clifford_Pope wrote: »

That's the UK's choice. We set an uncompetitive tax regime which has the predictable consequence that companies take their tax custom elsewhere.

If you want people to come and pay our taxes you have to lower them to a level that can compete internationally.

the maths say that a small country with little internal competition can always benefit from a lower corporation tax than large countries (until of course corporation tax is zero)

what would your favourite tax increase be to compensation for a zero rate corporation tax?

Mallotum_X

Clifford_Pope wrote: »

That's the UK's choice. We set an uncompetitive tax regime which has the predictable consequence that companies take their tax custom elsewhere.

If you want people to come and pay our taxes you have to lower them to a level that can compete internationally.

There will always be a small number of countries that will play into the hands of these firms. It is not a good idea to always go for the race to the bottom, but to set up a regime that ensures a fair proportion of the profits are taxed in the country they are earned.

N1AK

Mallotum_X wrote: »

All that's happening now is the taxpayer is lobbying for a fairer system and it would appear the politicians are listening. Having a system where a big coffee shop is able to pay a significantly lower rate of tax than a mom-and-pop outfit is clearly unfair, and again gives extra advantages to the larger.

No. What is happening is the political parties are making lots of noise about a couple of tax avoiders while proposing to do nothing about the legality of those actions. If they want to resolve this they should stop banging on about the 'morality' of not paying tax you are legally allowed not to pay and do something about it.