Ritz Hotel Cooking the books...

HAMISH_MCTAVISH

BertieUK wrote: »

there seems to be many angry comments being made recently about this topic.

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Maybe someone could explain the pros and cons please.

Sure.

Some not particularly bright people apparently want to pay more in taxes. They don't know that's what they are trying to do, because they are too stupid to understand the fact that businesses don't ever pay taxes. They only collect taxes from consumers on behalf of government.

It doesn't matter whether or not it's called VAT, import duty, or corporation tax, the only person that pays for it is YOU, the consumer.

And you pay for it via an increase in the price of goods and services you buy.

When governments raise taxes on businesses, it is paid for by you.

Not by the business.

Not by the business owners.

By you.

The consumer. The person that has to ultimately pay for any increase in the costs of businesses through increased prices.

So when some dim activists prance around calling for businesses to pay more in tax, and to eliminate the entirely legal methods through which responsible businesses can reduce their tax obligation, what they are really asking for is an increase in the price of the things we all buy.

Which they clearly don't understand, because if they did they'd presumably just volunteer to pay more tax themselves.

Hope that clears it up.;)

Thrugelmir

BertieUK wrote: »

Yes I understand what you are saying, but is this really a fair way of conducting business, or is this the only way they can remain in business?

In what sense fair? Maybe it's a reflection of society at all levels. Where many people take advantage to bend the rules. Maximise something to their own end.

Gerald Ratner is living evidence of how business can get it wrong. His great quote......

"We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, "How can you sell this for such a low price?", I say, "because it's total crap."

BertieUK

HAMISH_MCTAVISH wrote: »

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So when some dim activists prance around calling for businesses to pay more in tax, and to eliminate the entirely legal methods through which responsible businesses can reduce their tax obligation, what they are really asking for is an increase in the price of the things we all buy.

Which they clearly don't understand, because if they did they'd presumably just volunteer to pay more tax themselves.

Hope that clears it up.;)

Thank you Hamish you have certainly gone to great lengths in putting it into great perspective. I am not the sharpest knife in the drawer but when so many people go OTT about this issue it is for me WAS very confusing.

Here's tae us, wha's like us? Damned few an' they're a' deid
My wife is a Scot

HAMISH_MCTAVISH

BertieUK wrote: »

Thank you Hamish you have certainly gone to great lengths in putting it into great perspective. I am not the sharpest knife in the drawer but when so many people go OTT about this issue it is for me WAS very confusing.

Yes, it's really quite simple when you look at it like that.

Amazon, for example, has been extremely innovative in bringing reduced prices to consumers. One of the ways it does so is to aggressively minimise it's tax liabilities through entirely legal means.

Good for them, good for consumers, good for all of us.

I do have some sympathy with old style businesses that don't have the ingenuity to come up with such innovative models.... Just as I have sympathy with the thousands of cart wheel makers and horse saddle manufacturers that went out of business 100 years ago when Henry Ford brought the Model T to the masses.

But it doesn't change the fact that we're all better off today because of it.

And there is nothing to stop any business setting up a legal structure to maximise tax savings via limited companies based elsewhere in Europe such as Amazon does, Starbucks does, and indeed many others do.

We are all European, we can all use the same methods as the big boys with just a little research, and if more of us did so it would force the UK government to become more competitive with other countries tax structures and therefore reduce prices for everyone.

Here's tae us, wha's like us? Damned few an' they're a' deid
My wife is a Scot

Och Aye.

MacMickster

HAMISH_MCTAVISH wrote: »

... you pay for it via an increase in the price of goods and services you buy.

When governments raise taxes on businesses, it is paid for by you.

Not by the business.

Not by the business owners.

By you.

The consumer. The person that has to ultimately pay for any increase in the costs of businesses through increased prices.

An unusually well reasoned argument. Unfortunately not entirely true.

In this case it seems that the beneficiaries are the Barclay brothers themselves. If they want to make just as much money for their own pockets then they have to decide whether to increase the prices for customers at The Ritz. It certainly won't cost me any more.

If they, or any business, find that they do have to increase the prices to their customers in order to pay their fair share of taxes then it is an indication that they were enjoying an unfair trading advantage over competitors who observe the spirit of UK tax law.

Also, think about your assertion that these extra taxes will be borne by the long-suffering tax-paying majority, which I presume that you think that they wouldn't have to pay if nasty activists didn't bang on about companies paying their fair dues. Do you really think that H M Government will just make do without their tax revenues, or might they just increase taxes in other areas where they know that it will be paid by the same long-suffering tax-paying majority in order to recoup the shortfall?

Generali

According to the article on the BBC website, the Ritz ploughs all its profits back into the hotel. Profits that are invested into the underlying business do not attract Corporation Tax so it's hard to see what the crime is here.

We do all understand that companies don't exist as cash cows to be milked by the Exchequer, right? Companies exist to make a profit for their owners, no other reason just like we all go out to work despite rather than because of our income tax bills.

HAMISH_MCTAVISH

MacMickster wrote: »

Do you really think that H M Government will just make do without their tax revenues, or might they just increase taxes in other areas

That's the thing about being on the wrong side of the Laffer curve, as we now are.

It makes no difference how high they try to raise tax rates, the tax take will decline if you squeeze any further.

The only way to meaningfully increase the tax take from here, is to reduce the tax rate, and stimulate growth.

kabayiri

Generali wrote: »

According to the article on the BBC website, the Ritz ploughs all its profits back into the hotel. Profits that are invested into the underlying business do not attract Corporation Tax so it's hard to see what the crime is here.

We do all understand that companies don't exist as cash cows to be milked by the Exchequer, right? Companies exist to make a profit for their owners, no other reason just like we all go out to work despite rather than because of our income tax bills.

And yet the government seem to be getting vexxed about a trifing £40m being lost to contractor types (amongst others) through the use of umbrella companies using innovative schemes to save their clients money. £40m is chicken feed compared to the money saved by Accenture;HP;IBM;Cap Gemini;Fujitsu;Amazon;Google;Apple; etc etc.

Surely, in a free market, these types of innovative but legal income schemes should be available to everyone?

It leaves you with the suspicion that tax avoidance is fine for the big guy, but woe betide the small guy in the street trying it.

BobQ

grizzly1911 wrote: »

I wonder how many customers of the hotel pay full UK taxation either?:think:

This is true but I was referring to the bigger picture allegedly exposed by the programme of which companies like the Ritz are but one example. There also appears to be residents of Sark allegedly involved in threats of litigation and a delightful local newspaper on this idyllic island.

http://www.bbc.co.uk/iplayer/episode/b01px74c/Panorama_The_Tax_Haven_Twins/

Kennyboy66

HAMISH_MCTAVISH wrote: »

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It doesn't matter whether or not it's called VAT, import duty, or corporation tax, the only person that pays for it is YOU, the consumer.

And you pay for it via an increase in the price of goods and services you buy.

When governments raise taxes on businesses, it is paid for by you.

Not by the business.

Not by the business owners.

By you.

Laughable simplistic as ever.


Most economists would say that the burden of corporation tax falls on a mixture of the consumer, the owner and the employee.
I'm afraid you simply don't understand economic pricing if you think the burden falls entirely on the end user.


Corporation tax isn't a great tax but then what tax is ?

But here are some reasoned arguments to have corporation tax.

1) its generally progressive, the burden falls more on the relatively wealthy than the poor

2) its a back stop to personal income tax. If we didn't have it the wealthy would keep all their income in a company offshore and avoid tax completely.

3) if corporation taxes don't fall on the owners - why do they lobby so hard for the taxes to be reduced.

4) Corp tax is a price for limited liability. A corporation is a separate legal entity at law, and its owners can discharge all liabilities in liquidation. Should there not be a price for this ?

5) Many corporation earn hugely from 'rents' - often as an accident of history or geography not from hard work or innovation. Read Adam Smith on why rents should be taxed.

6) The Laffer curve exists - but no-one really knows where we are on it for corporation tax. Anyone who suggests they do is a fool.

I'd stick to house prices if I were you.