Pushing business expenses...or how to pay no tax?!

Boris Johnson : (Independent 26.1.16) - “It is absurd to blame the company for ‘not paying their taxes’. You might as well blame a shark for eating seals. It is the nature of the beast; and not only is it the nature of the beast – it is the law it is the fiduciary duty of their finance directors to minimise tax exposure.” As Boris states its like blaming the sharks for eating the seals, however, in many cases with multi-million pound companies, the very people employed to 'legally' avoid paying taxes,happen to be the very people who wrote the rule book for HMRC in the first place, it seems to me that in some cases the sharks are being fed the seals.
 
KitsuneAndy said:
But it is and the government don't want to change the laws, so it will remain so.

If it wasn't legal, we wouldn't settle for such a paltry amount.

"Guys, the public are annoyed we let you pay zero tax, we need you to make a voluntary payment to stop the complaining for a while so that we don't have to change the tax rules"
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Not according to the European Commission. http://europa.eu/rapid/press-release_IP-15-5880_en.htm

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This is illegal under EU state aid rules: Tax rulings cannot use methodologies, no matter how complex, to establish transfer prices with no economic justification and which unduly shift profits to reduce the taxes paid by the company. It would give that company an unfair competitive advantage over other companies (typically SMEs) that are taxed on their actual profits because they pay market prices for the goods and services they use.

Therefore, the Commission has ordered Luxembourg and the Netherlands to recover the unpaid tax from Fiat and Starbucks, respectively, in order to remove the unfair competitive advantage they have enjoyed and to restore equal treatment with other companies in similar situations. The amounts to recover are €20 - €30 million for each company. It also means that the companies can no longer continue to benefit from the advantageous tax treatment granted by these tax rulings.
 
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rjbell said:
Not according to the European Commission. http://europa.eu/rapid/press-release_IP-15-5880_en.htm

Quote

This is illegal under EU state aid rules: Tax rulings cannot use methodologies, no matter how complex, to establish transfer prices with no economic justification and which unduly shift profits to reduce the taxes paid by the company. It would give that company an unfair competitive advantage over other companies (typically SMEs) that are taxed on their actual profits because they pay market prices for the goods and services they use.

Therefore, the Commission has ordered Luxembourg and the Netherlands to recover the unpaid tax from Fiat and Starbucks, respectively, in order to remove the unfair competitive advantage they have enjoyed and to restore equal treatment with other companies in similar situations. The amounts to recover are €20 - €30 million for each company. It also means that the companies can no longer continue to benefit from the advantageous tax treatment granted by these tax rulings.
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I don't see any mention of Google in that quote..
 
KitsuneAndy said:
I don't see any mention of Google in that quote..
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My discussion with Ruth earlier was regarding Starbucks. The article does not mention Google but with similar arrangements in Ireland perhaps they were preempting the the knock on the door.
 
rjbell said:
My discussion with Ruth earlier was regarding Starbucks. The article does not mention Google but with similar arrangements in Ireland perhaps they were preempting the the knock on the door.
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They're totally different things. Starbucks and Fiat made a deal with the regulator that amounted to "State Aid".

Google have a complex company structure that means that their profits get registered in Ireland rather than UK, totally different. The deal they've come to, is that they've agreed to register a portion of profits in the UK, voluntarily. So the question is, why? What do they get out of it? I wouldn't be surprised if some deal had been made.
 
KitsuneAndy said:
They're totally different things. Starbucks and Fiat made a deal with the regulator that amounted to "State Aid".

Google have a complex company structure that means that their profits get registered in Ireland rather than UK, totally different. The deal they've come to, is that they've agreed to register a portion of profits in the UK, voluntarily. So the question is, why? What do they get out of it? I wouldn't be surprised if some deal had been made.
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permission to fly his drones maybe!
 
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KitsuneAndy said:
They're totally different things. Starbucks and Fiat made a deal with the regulator that amounted to "State Aid".

Google have a complex company structure that means that their profits get registered in Ireland rather than UK, totally different. The deal they've come to, is that they've agreed to register a portion of profits in the UK, voluntarily. So the question is, why? What do they get out of it? I wouldn't be surprised if some deal had been made.
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Of course a deal has been made, but if everything they've done is within the rules (questionable in Googles case), and they plan to continue in the same vein, what brings them to the table to strike a deal?

Google's position is questionable because the EU rules AFAIK frown upon companies running a notional 'headquarters', and Google house a huge business in London that exists solely to serve the local market, suggesting that it's somehow part of the Irish company is dubious at best and at worst fraudulent.
 
Phil V said:
Of course a deal has been made, but if everything they've done is within the rules (questionable in Googles case), and they plan to continue in the same vein, what brings them to the table to strike a deal?

Google's position is questionable because the EU rules AFAIK frown upon companies running a notional 'headquarters', and Google house a huge business in London that exists solely to serve the local market, suggesting that it's somehow part of the Irish company is dubious at best and at worst fraudulent.
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That's what I meant, what have our government given Google (well, Alphabet now) in order for them to offer to pay any tax? It might not be "moral", but no one is suggesting that Google's done anything to break any tax laws.

Of course, since our chancellor's business doesn't pay corporation tax either, he's unlikely to clamp down too much.
 
KitsuneAndy said:
Google have a complex company structure that means that their profits get registered in Ireland rather than UK, totally different. The deal they've come to, is that they've agreed to register a portion of profits in the UK, voluntarily. So the question is, why? What do they get out of it? I wouldn't be surprised if some deal had been made.
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There's an article about this on the BBC News today.
http://www.bbc.co.uk/news/business-35399604

The suggestion there is that Google's decision to negotiate the deal is essentially a PR stunt - "they are certainly not immune to the bad publicity that tends to result when the media discover just how little they are paying in tax". Not sure I buy that, but on the other hand I'd expect the BBC's business correspondent to understand these things better than I do, so perhaps that is the rationale.

More interesting to my mind is the assessment by Chas Roy-Chowdhury, who is head of taxation at the Association of Chartered Certified Accountants, of HMRC's tactics He says that if HMRC thought they could have "won a quick victory they would have done it" and that they will have done a "cost-benefit thing. They will have done the sums they might get in a court case... they probably think this is a good deal." Perhaps it really is better to settle for £130m then to risk the time and expense of taking it to an international court.

Also, in today's Times there is a report that the French tax authorities are pursuing Google for over €500 million despite Google's operations in France being only a quarter of the size of their UK operations. Maybe the French authorities have a different cost-benefit model....
http://www.thetimes.co.uk/tto/money/tax/article4674521.ece
 
Maybe we are getting even more open source intelligence back in return ;) could actually be really good value for money.
 
StewartR said:
Also, in today's Times there is a report that the French tax authorities are pursuing Google for over €500 million despite Google's operations in France being only a quarter of the size of their UK operations. Maybe the French authorities have a different cost-benefit model....
http://www.thetimes.co.uk/tto/money/tax/article4674521.ece
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I think HMRC's point would be that while France are trying to get Google to pay €500M, us jolly old Brits have managed to get them to agree to £130M. Bird in the hand and all that.

It really does stink. But basically the tax rules aren't equipped to deal with modern multinationals. Their shenanigans are practically the equivalent of my investing in an ISA to avoid tax.
 
FYI I've not paid corporation tax for 3 years. It's not only the big boys that get out of it. There are many ways the government allow you to not pay corporation tax [emoji1]
 
Dale_tem said:
FYI I've not paid corporation tax for 3 years. It's not only the big boys that get out of it. There are many ways the government allow you to not pay corporation tax [emoji1]
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yes you can pay all your profits as wages.
coorporation tax is only on unspent profits
 
We have lots of profit and I get dividends, it's not all lost through wages.

Most of the ways you can have your corporation tax reduced is to do with increasing employment/pushing tech forward to benefit the country/improve.... etc.

It is basically the government investing in companies so they can grow etc.

We were looking at a project last year that would of got us a million or two euros from the EU. It wouldn't of cost us that much to do, so we would of been in profit before we even started selling the product. The reason? The project was something the EU is pushing so the money was a big incentive to get the project done and make the EU look good.
 
The system is broken and unfairly weighted to big multinationals.

Taxation is a form of public control and enslavement. Most of our taxes go to paying for interest rates, government bond funding - a thin air that elitist bankers blow out of proportion.

The google deal was the final straw undermining my trust in the HMRC and the treasury. They are openly laughing at ordinary taxpayers and small businesses.
 
KitsuneAndy said:
They're totally different things. Starbucks and Fiat made a deal with the regulator that amounted to "State Aid".

Google have a complex company structure that means that their profits get registered in Ireland rather than UK, totally different. The deal they've come to, is that they've agreed to register a portion of profits in the UK, voluntarily. So the question is, why? What do they get out of it? I wouldn't be surprised if some deal had been made.
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Well well well! here is your answer.

http://www.mirror.co.uk/news/uk-news/tax-row-giant-google-paid-7279043#ICID=sharebar_twitter
 
So Google will control all of HMRC's access to their documents and will be able to hold them to ransom anytime they like. Whoever decided to do this is an utter moron.
 
dejongj said:
I'm surprised you sound surprised. And there will be a lot more to it than some apps, remember where you heard it first (y)
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srichards said:
So Google will control all of HMRC's access to their documents and will be able to hold them to ransom anytime they like. Whoever decided to do this is an utter moron.
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Would you guys like some more tinfoil?
 
neil_g said:
Would you guys like some more tinfoil?
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LOL It's only tinfoil required if you don't know what is actually happening....But if it pleases and make you feel better then why not....
 
It's nothing to do with tin foil. It's utterly stupid to allow a single provider to control an entire area of your business. If internet access is critical to your business then you have a second connection in case your main one fails. It's common sense. You don't put all your entire business in the hands of one provider. You don't have just one preferred supplier for everything. You split things. Basic common sense!
 
srichards said:
It's nothing to do with tin foil. It's utterly stupid to allow a single provider to control an entire area of your business. If internet access is critical to your business then you have a second connection in case your main one fails. It's common sense. You don't put all your entire business in the hands of one provider. You don't have just one preferred supplier for everything. You split things. Basic common sense!
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Its that drive to reduce the operating expenses...I don't get why google apps/docs though but hey someone will have tried it....Arguably why an organisation like that still needs freeform office document creation tools for all is beyond me...I think that is where real savings are to be made....
 
Ooo, another juicy government IT contract. What could possibly go wrong?

*cough* Inlandrevenue...

:D
 
srichards said:
After watching programmes about corporations basically cheating their way out of paying a decent amount of tax it set me wondering what ways you could set up a business to basically pay for hobbies or your normal housing costs?

I was wondering if you sold advertising space for example which was permanently displayed on your house could you technically claim all manner of household running costs as legitimate business expenses? Buying things to sell space on would seem taking it a bit far but selling space on property or items you already own might be a possibility.

It really annoys me the likes of google etc pay a paltry percentage of profits as they use al manner of what appears to be underhand ways of doing things. Charging other businesses you own something so magically your profits disappear along with taxes!

This is just a vague notion obviously :)
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You could expense technology devices such as phones tvs etc?
 
srichards said:
So Google will control all of HMRC's access to their documents and will be able to hold them to ransom anytime they like.
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Abd the first time they do, they prompt a massive exodus away from Google Drive and Google Docs and into the welcoming arms of their competitors.
 
srichards said:
It's nothing to do with tin foil. It's utterly stupid to allow a single provider to control an entire area of your business. If internet access is critical to your business then you have a second connection in case your main one fails. It's common sense. You don't put all your entire business in the hands of one provider. You don't have just one preferred supplier for everything. You split things. Basic common sense!
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No One would tolerate a government department contracting twice for the same service. That's just nonsense, it's difficult enough for a large department to find one supplier that's big and robust enough to deal with.

Which of course is half the reason government IT contracts are prone to disaster, the other reason being that everything has to be done by the lowest bidder, because it's your taxes and mine they're spending.

Let's just ask a question: how many successful businesses are run on that basis?
 
You also would struggle to justify living in your business premises without alternative accommodation
I claim some home as office expenses but nothing that's worth writing home about
 
Phil V said:
Which of course is half the reason government IT contracts are prone to disaster, the other reason being that everything has to be done by the lowest bidder, because it's your taxes and mine they're spending.

Let's just ask a question: how many successful businesses are run on that basis?
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That's just about every business ever. Cheapest wins most of the time!
 
Phil V said:
No One would tolerate a government department contracting twice for the same service. That's just nonsense, it's difficult enough for a large department to find one supplier that's big and robust enough to deal with.

Which of course is half the reason government IT contracts are prone to disaster, the other reason being that everything has to be done by the lowest bidder, because it's your taxes and mine they're spending.

Let's just ask a question: how many successful businesses are run on that basis?
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Actually that is no longer the case. It can be done on a MEAT basis as well. But I agree too often a very risk adverse approach is taken and the tender doesn't even reach very capable smaller organisations.
 
srichards said:
That's just about every business ever. Cheapest wins most of the time!
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Your experience of business is different to mine.

Companies that behave in that way tend to fare the same as govt departments, lunging from near disaster to near disaster till they eventually implode.

I run a small business, woyld you suggest I could improve it by selling my 6d and L lenses, and replacing them with a 100d and kit lens, that my customers will be happy to receive bob book instead of the fine albums I supply?

Will @StewartR improve his lens hire business by only hiring out the cheapest kit?

Do all those reps flying up and down the motorway in Mercs and Audi's realise they could be doing better in Suzuki's?

Or as I suggested, do smart businesses know that sometimes spending a bit extra makes perfect business sense ;)
 
That is why I like a MEAT evaluation criteria based tender. It provides that bit of freedom to make the right decision. Combined with gain share it can go a long way to successful investments.
 
I live in Stoke. Cheap is everything ! Most of the small businesses I have ever worked in or come into contact with its all about price and how cheap you can get something. The buy it cheap buy it twice concept seems to have passed many by. Many are struggling to make ends meet so it's minimum wage, zero hours attitude all the way.
 
srichards said:
I live in Stoke. Cheap is everything ! Most of the small businesses I have ever worked in or come into contact with its all about price and how cheap you can get something. The buy it cheap buy it twice concept seems to have passed many by. Many are struggling to make ends meet so it's minimum wage, zero hours attitude all the way.
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Exactly!

Not what we'd describe as well run then.
 
srichards said:
Its cost per use that matters. If the cheap stuff lasts long enough then buying fancy is just wasting money.
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But it rarely is VFM, as in my previous examples, there's more to running a business tgan the 'lowest cost', I'd literally go out of business if I downgraded all my kit.
 
Phil V said:
But it rarely is VFM, as in my previous examples, there's more to running a business tgan the 'lowest cost', I'd literally go out of business if I downgraded all my kit.
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I don't think that is so true these days. The capability level of basic cameras is far in excess of what they were. I'd think there is more to your business than the kit you use :)
 
Buy Panasonic :)

Would be interested in more recent data.
 
I doubt much has changed.
 
srichards said:
Its cost per use that matters. If the cheap stuff lasts long enough then buying fancy is just wasting money.
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Comes down to usage and what it's actually needed for, same as everything
Expensive isn't always necessary or in real terms any better - but is dependent on what you want it for
 
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