MSE News: Martin's reaction to Brexit

edited 24 June 2016 at 9:33AM in Budgeting & Bank Accounts
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  • MarchitielloMarchitiello Forumite
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    gadgetmind wrote: »
    Pay tax on what? All UK turnover? All UK profit? All global profit?

    International transfer pricing is a complex issue and I can't see being out of the EU making it any more transparent, far from it.

    And global companies that don't do much business here could simple choose to leave, and I expect that many will do exactly that. HSBC could well be one of the first to make the announcement.
    If you look at Non EU companies currently trading in the UK/Europe, they basically register a separate company owned by the mother company outside the EU. The new UK/EU company is liable corporate tax in the country it operates this separate business for the trading made in that country (or within EU if applicable) and pass the net profit to the mother company. Take as an example McDonald and Coca Cola to keep it simple. The problem is that the Financial Sector international companies have long preferred London as European Base, paying corporate taxes here for all their trade within the EU. This will soon change, and the Financial Market is the biggest contributor to the UK economy....
  • gadgetmindgadgetmind Forumite
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    and pass the net profit to the mother company. Take as an example McDonald and Coca Cola to keep it simple.

    Those two are very deeply not simple, and you can't "pass the net profit" on because that's not how international taxation works. The only way to move profits is by charging for goods and services, which is why I mentioned international transfer pricing.

    https://en.wikipedia.org/wiki/Transfer_pricing

    https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifting

    https://en.wikipedia.org/wiki/Transfer_mispricing
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • bigadajbigadaj Forumite
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    gadgetmind wrote: »
    Those two are very deeply not simple, and you can't "pass the net profit" on because that's not how international taxation works. The only way to move profits is by charging for goods and services, which is why I mentioned international transfer pricing.

    https://en.wikipedia.org/wiki/Transfer_pricing

    https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifting

    https://en.wikipedia.org/wiki/Transfer_mispricing

    Yes, and the issues behind intellectual property and royalty payments makes this even more complicated.

    I'm not aware of any multi national that is moving profits into the uk in order to pay tax, it's normally the usual circuit of payments through Ireland, the Netherlands and the Isle of Man that manages to avoid payment of almost any uk tax.
  • MarchitielloMarchitiello Forumite
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    gadgetmind wrote: »
    Those two are very deeply not simple, and you can't "pass the net profit" on because that's not how international taxation works. The only way to move profits is by charging for goods and services, which is why I mentioned international transfer pricing.

    https://en.wikipedia.org/wiki/Transfer_pricing

    https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifting

    https://en.wikipedia.org/wiki/Transfer_mispricing

    I was not talking about tax avoidance scheme but of agreement in many international countries not to double tax if profit tax was paid in a subsidiary country. Many USA companies operate in EU under such a scheme.
  • bigadajbigadaj Forumite
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    I was not talking about tax avoidance scheme but of agreement in many international countries not to double tax if profit tax was paid in a subsidiary country. Many USA companies operate in EU under such a scheme.

    Yes, and they generally don't pay much tax in the uk.

    Their preference is not to pay much tax in the Netherlands, Eire, Isle of Man or Channel Islands.
  • zolablue25zolablue25 Forumite
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    I think those people who voted "Leave" so that we can stop "Johnny Foreigner" coming in are going to end up being disappointed. Farage has been sidelined by the Leave team and is not wanted in the negotiating team. Leading Leavers (e.g. Hannan and Johnson) have implied that freedom of movement for labour is likely to continue as part of any trade agreement (as per Norway) and they seem to be OK with this idea.

    As has been said elsewhere, all the vote was for was whether we stayed as a member of the EU or not, there was no mention of immigration on the form.
  • GaleSF63GaleSF63 Forumite
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    eDicky wrote: »
    This is the incredible truth, my own brother voted on that basis. (the right to buy a more powerful vacuum cleaner.)

    His vote will be balanced out by one of those who voted remain because they thought they wouldn't be allowed to go on holiday in Ibiza if we leave.
  • brodevbrodev Forumite
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    As I have an Irish grandfather I know that I have the right to get an Irish passport and therefore continued European citizenship. Does anyone know if I decide to go down this line whether or not this would confer the right to get an Irish/EU passport on to my children?
    Another question. If I did this would I still be able to keep my British passport?
    TIA
    Something Really Interesting
  • GingerBob_3GingerBob_3 Forumite
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    brodev wrote: »
    As I have an Irish grandfather I know that I have the right to get an Irish passport and therefore continued European citizenship. Does anyone know if I decide to go down this line whether or not this would confer the right to get an Irish/EU passport on to my children?
    Another question. If I did this would I still be able to keep my British passport?
    TIA


    No and Yes. For your children to qualify for Irish citizenship you would have needed to be an Irish citizen at the time of their birth. Yes, dual nationality is allowed, and is now obviously a very good idea.
  • ss53ss53 Forumite
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    badger09 wrote: »
    I've just watched it.

    He looks kn*ckered and rambles a bit after an all-nighter;)

    Basic message is:
    we don't know what will happen next
    interest rates unlikely to rise in short term
    effect on house prices unknown
    savings probably still safe under £75k FSCS limit
    pound buys less currency so holidays will cost more
    imports will cost more so BOE will probably print more money to avoid stagnating economy
    lots of financial pain, but we don't know how severe
    above all, we must all work together - KEEP CALM & CARRY ON:cool:

    Oh, and that the people leading us will still be leading us. Which has already been overtaken by events!


    I haven't watched the video just the summary above. Did he really say he didn't expect interest rates to rise? I was thinking the opposite would happen and that we should expect interest rates to fall perhaps to zero. This seems to be partly priced into the currency falls and I would have though a response to deflation would be more likely to be required than a response to inflation.
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