SouthWest Trains Tax Avoidance?

martindow

I've notice on my credit card statement for a journey booked with SW Trains that the country of origin for the payment is listed as Luxembourg. In SWT's terms and conditions I see that they are using Trainline for payments at a Luxembourg address

https://www.buytickets.southwesttrains.co.uk/terms.aspx

Tickets are zero rated for VAT, but presumably this arrangement is some sort of tax avoidance by Trainline and SWT.

Are other train companies involved in similar dodgy schemes? I think I would prefer to book tickets with a company who is not involved in tax avoidance.

Quentin

All companies/businesses do what they can to avoid paying tax! You will be hard pressed to find any organisation that doesn't do so, and it is in the interests of their shareholders to do so.

martindow

Quentin wrote: »

All companies/businesses do what they can to avoid paying tax! You will be hard pressed to find any organisation that doesn't do so, and it is in the interests of their shareholders to do so.

What is the avoidance here though? Companies like paypal have negotiated very low VAT rates in Luxembourg, but this can't be the motive for Trainline as there is no VAT in any case for tickets.

Quentin

Companies don't actually "pay" VAT anyway (it's the end user that pays)


Any VAT a company pays to suppliers is deducted from the VAT it collects of customers before passing it on to the Govt.

Tax avoidance isn't usually anything to do with avoiding paying VAT (except when you pay cash to a VAT registered builder/garage etc and the VAT is evaded)

wealdroam

martindow wrote: »

What is the avoidance here though? Companies like paypal have negotiated very low VAT rates in Luxembourg, but this can't be the motive for Trainline as there is no VAT in any case for tickets.

Corporation Tax is the biggy.

Nothing to do with VAT.

Just by being based in Luxembourg the company taxes are lower than being in the UK.

The_Groat_Counter

martindow wrote: »

I've notice on my credit card statement for a journey booked with SW Trains that the country of origin for the payment is listed as Luxembourg. In SWT's terms and conditions I see that they are using Trainline for payments at a Luxembourg address

https://www.buytickets.southwesttrains.co.uk/terms.aspx

Tickets are zero rated for VAT, but presumably this arrangement is some sort of tax avoidance by Trainline and SWT.

Are other train companies involved in similar dodgy schemes? I think I would prefer to book tickets with a company who is not involved in tax avoidance.

I'd guess (though I haven't checked) that this will the same for all the train company websites that use the Trainline system, however many now use the WebTIS system from Atos (it's the 'mixing deck' one) where the contract is directly with the train company rather than through an intermediary.

So for example you could try the Great Western Railway site (new name - they were First Great Western until very recently).

Direct link to their booking site:
https://tickets.gwr.com/