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I am angry with Amazon and Starbucks. I feel both of these have a large presence in the UK. They employ thousands of people. Amazon has done a large amount of d

by bobsy 14y ago

I am angry with Amazon and Starbucks. I feel both of these have a large presence in the UK. They employ thousands of people. Amazon has done a large amount of damage to the UK high street. Starbucks has pushed out a number of independent coffee shops. The fact they are paying almost zero tax while being here I find abhorrent. I want Amazon and Starbucks here. However I feel both are taking the piss when it comes to taxes. Amazon say they run a distribution network or something and so only have to pay minimal taxes. I feel the fact that these companies failed to justify why they pay the tax they do prove that they are doing something wrong - even if its not illegal. As for Google I feel it is less of a problem. They mainly deal in digital goods. They don't have a big presence in the UK. They just offer their online service's here. As most of the tech work is done in the US or Ireland I don't think they have much to justify with their tax situation. I work for a website-as-a-service company and we have thousands of clients scattered around the world. Around 500 are based in the UK. I don't really see how we could accurately be charged tax based on geographical location of Sales.

jonknee 14y ago
> The fact they are paying almost zero tax while being here I find abhorrent. Almost zero for one tax, but they certainly pay lots of other taxes. Mom and pop coffee shops aren't known to be large tax payers either, they probably weren't paying much more than Starbucks is now.
- DanBC 14y ago
  But mom and pop coffee shops are not making gazillions in profit and syphoning that off in weird accounting schemes to other territories. It's not avoiding a reasonable amount of tax that is annoying to most people. It is the transparent exploitation of loopholes to evade tax that is annoying. Eg: Starbucks has to pay starbucks to use the brand starbucks, which means starbucks pays less corporation tax here, but more in the country where they've registered the company that owns the starbucks brand. (Which just happens to be an office in a building in a country with a low corporation tax rate.)
  - Cbasedlifeform 14y ago
    Hear, hear! But mom and pop coffee shops are not making gazillions in profit and syphoning that off in weird accounting schemes to other territories.
  - jonknee 14y ago
    > It's not avoiding a reasonable amount of tax that is annoying to most people. It is the transparent exploitation of loopholes to evade tax that is annoying. I guess I just don't understand that viewpoint. I would be shocked if a company wasn't using legal means to reduce its expenses. The problem isn't companies using loopholes, it's that there are loopholes in the first place. Big companies like loopholes like this because they have the advantage in using them (lots of accountants) and in the US many voters like them because closing them is "raising taxes". At the end of the day it's a gift to large corporations at the expense of small businesses and startups.
    - DanBC 14y ago
      > I guess I just don't understand that viewpoint. Bob should be paying 40% tax. Bob uses normal legal means and reduces his tax burden to 25%. Some people think he's a but cheeky; most people don't really care (or are jealous that he has an accountant); some people say "good on you!" Ann should be paying 40% tax. Ann uses a bunch of weird interpretations of tax law to squeeze through loopholes. Ann has to keep changing her finances because the loopholes keep changing. Ann pays about 0.5%. Ann then claims that she can hire a cleaner, and so we should be grateful that the cleaner pays PAYE and can buy goods which will have VAT. At the same time as Ann and Bob are avoiding tax everyone is going through tough times; their jobs are at risk, their services are being cut. Everyone knows that rich people and companies avoid some tax. Most people really don't care, so long as some kind of tax is being paid.
jmedwards 14y ago
> Amazon has done a large amount of damage to the UK high street Contentious - damage, or consumer choice and therefore progress? > However I feel both are taking the piss when it comes to taxes While I have zero doubt these companies and others will be taking 101% advantage of the situation, don't forget that the situation has been created by our own governments and an unwillingness to modernise in the face of a globalised world. For example, it surprises most people to learn that this 'brand value' Starbucks charges itself for (or the fact that these companies charge themselves between entities in the first place) is in many ways a requirement of the corporation to abide by transfer pricing rules.
- aes256 14y ago
  > Contentious - damage, or consumer choice and therefore progress? It's a matter of whether there is a level playing field. I was shocked to hear the representative from Amazon admit yesterday that they only pay 3% tax on ebook sales through an agreement with Luxembourg. That's absurd.
- epscylonb 14y ago
  > While I have zero doubt these companies and others will be taking 101% advantage of the situation, don't forget that the situation has been created by our own governments and an unwillingness to modernise in the face of a globalised world. Ultimately it is the fault of the voters, and as another poster pointed out, this is about a level playing field, not "punishing" big multi nationals. What we have seen since the 80's is a corporate oligarchy being created, if you can get into it you are set for life. These people are Nixonian in their attitude, "it's not morally wrong when I avoid taxes". This also stems from the amorality of Ayn Rand's writings, in Randian thinking it is acceptable to expect others to follow a moral code which you yourself break and it's acceptable to admonish others for breaking it. Big companies don't actually create a lot of jobs, most companies over their lifespan shed workers as they become more efficient. For a healthy free market to operate, it is vitally important that the percentage tax burden is the same for small companies and large companies, governments should not be giving tax advantages to anyone. This economic cherry picking causes "too big to fail" syndrome. As a UK voter, if a political party said they would simplify the tax code and make all companies who operate in the UK pay taxes on their business here I would probably vote for them.
tolmasky 14y ago
> I am angry with Amazon and Starbucks. I feel both of these have a large presence in the UK. They employ thousands of people. > As for Google I feel it is less of a problem... They don't have a big presence in the UK. So let me get this straight, you are OK with Google not paying taxes because... they don't provide jobs to the UK? My apologies if I honestly misunderstood your post, but it seems really strange that you let Google "off the hook" since they ONLY remove money from your economy and don't even create jobs there. The way your post is worded its as if you are offended that Amazon and Starbucks provide thousands of jobs. If Amazon and Starbucks figured out a way to provide the exact same services they do today, minus all those pesky UK employees, would you feel less angry with them?
- toyg 14y ago
  I think it's mostly about resource usage. Google services don't really benefit much from UK infrastructure (except digital infrastructure, which is privately owned for the most part at this point in time). Amazon and Starbucks simply would not be in business without UK roads, UK police and other UK services; so Amazon and Starbucks are benefitting from taxpayer-funded services while not contributing their fair share to their maintenance. EDIT: sorry, I wasn't clear -- I'm not arguing that Google should be treated differently, I was just suggesting a justification for the difference in perception.
  - ekianjo 14y ago
    Come on, roads have been paid back hundred of times since they were built, just like phone poles and most of the infrastructure. Now the governments in Europe are going after taxes because they are deeply indebted as welfare providers. Most of your taxes have nothing, nothing to do with the infrastructure or the maintenance of it.
    - mdpye 14y ago
      Because roads don't need regular maintenance? But that's beside the point, if you want to take a different view on it, a healthy population is a resource on which these companies draw. In the US model, companies also pay for this, direct to their employees private health insurers. But pay it they (mostly) do.
aes256 14y ago
> As for Google I feel it is less of a problem. They mainly deal in digital goods. They don't have a big presence in the UK. They just offer their online service's here. I don't buy this. It's absurd that a UK business can pay to place ads on the Google UK website, presenting them solely to UK consumers, and yet the money involved in this transaction never touches the UK. It goes straight to Ireland, then the Netherlands, to Bermuda.
- lmm 14y ago
  That's a business-to-business transaction, there wouldn't be any tax on it even if both companies were in the UK. There would be taxes on the profits of a UK company, which IMO is the wrong way to go about it; just tax the income made by UK investors who own shares in a company (wherever that company happens to be based). The money can bounce around through as many shell companies as you like, but at some point it becomes an individual's income; tax it there.
  - aes256 14y ago
    We have corporation tax as well as income tax for a reason. I'm no accountant or tax lawyer, but it's obvious Google are playing games with the UK. According to their own filings, they made $4bn from UK sales in the last financial year. The representative yesterday shrugged it off and tried to make out all Google do in the UK is have a bunch of promotions/localization staff. They (Google UK Ltd) receive all their income from Google in Ireland, and end up reporting a loss, meaning they pay a nominal amount of tax to the UK tax authorities. $4bn in sales from the UK market and they pay UK tax authorities around $5mn in tax. That's why people are angry, and that's why their representative was getting laid into by MPs yesterday.
ekianjo 14y ago
I am angry with my Government and the Parliament. I feel both of these have a large presence in my country. They employ thousands of people, well actually millions of people. The Government has done of huge amount of damage to the High Street through increasing taxes and regulations. It has pushed a number of independent companies out of business. The fact that they are have no responsibility to tax payers, while being here, I find Abhorrent. Maybe you should consider what is really hurting the Economy. The fact that your government is borrowing 5 billions every two weeks on the markets to keep functioning because its damn broke and cannot handle a budget, or the fact that Google did not pay (while absolutely legal) a few hundred millions in last year. If you apply the 80/20 rule, I think your attention is well misguided.
- jwoah12 14y ago
  I really dislike this kind of logic. Just because a greater problem exists, does not mean nobody should be allowed to focus on anything else. Should I not be allowed to volunteer or donate money to Hurricate Sandy relief efforts in the NYC area because more people die of cancer?
  - ekianjo 14y ago
    No, this means that you should be worried about the Cancer that is killing you (sovereign debt raising by hundred of billions every year) instead of the rash on your skin (a few millions X company did not pay over a year). It's all a matter of priorities, and proportions. And the media (usually state-controlled, at least partly) certainly want you to see the "skin rash" rather than their own mistakes, because you should be way more angry by how lax they are with YOUR money in the first place.
    - Tyrannosaurs 14y ago
      If I had cancer I'd still get a skin rash sorted out (and I don't think that's just a problem with your metaphor). Sorting out the government debt needs to happen but the 600-odd MPs and hundreds of thousands of civil servants employed by the UK government may well be capable of dealing with as many as two things.
youngtaff 14y ago
>Amazon has done a large amount of damage to the UK high street To blame Amazon is to only look at one side of the argument... What about the high levels of rent on the high street, and the costs of parking etc.? Councils, landlords and others all have played their part in the damage to the high street too.
Shivetya 14y ago
Why should they pay ANY tax? No corporation pays taxes, they simply collect taxes for whichever government entity has its hands out. The reason why this works so well is that in general people are ignorant. It also helps that many are selfish, thinking that since they don't buy from X they aren't subject to the tax somehow. So yeah, its annoying some companies are not paying into the local coffers but that is only the real issue being buried by those who like the populace clueless in tax matters. In the states, I am not sure how the UK works, we have withholding tax where taxes are deducted from our pay before we see it. It helps hide the burden of government. So does taxing corporations. Think about it, if every purchase you made had a line entry for "THIS IS THE EMBEDDED TAX" what do you think people would do?

by bobsy 14y ago

jonknee 14y ago

> The fact they are paying almost zero tax while being here I find abhorrent. Almost zero for one tax, but they certainly pay lots of other taxes. Mom and pop coffee shops aren't known to be large tax payers either, they probably weren't paying much more than Starbucks is now.

DanBC 14y ago
But mom and pop coffee shops are not making gazillions in profit and syphoning that off in weird accounting schemes to other territories. It's not avoiding a reasonable amount of tax that is annoying to most people. It is the transparent exploitation of loopholes to evade tax that is annoying. Eg: Starbucks has to pay starbucks to use the brand starbucks, which means starbucks pays less corporation tax here, but more in the country where they've registered the company that owns the starbucks brand. (Which just happens to be an office in a building in a country with a low corporation tax rate.)
- Cbasedlifeform 14y ago
  Hear, hear! But mom and pop coffee shops are not making gazillions in profit and syphoning that off in weird accounting schemes to other territories.
- jonknee 14y ago
  > It's not avoiding a reasonable amount of tax that is annoying to most people. It is the transparent exploitation of loopholes to evade tax that is annoying. I guess I just don't understand that viewpoint. I would be shocked if a company wasn't using legal means to reduce its expenses. The problem isn't companies using loopholes, it's that there are loopholes in the first place. Big companies like loopholes like this because they have the advantage in using them (lots of accountants) and in the US many voters like them because closing them is "raising taxes". At the end of the day it's a gift to large corporations at the expense of small businesses and startups.
  - DanBC 14y ago
    > I guess I just don't understand that viewpoint. Bob should be paying 40% tax. Bob uses normal legal means and reduces his tax burden to 25%. Some people think he's a but cheeky; most people don't really care (or are jealous that he has an accountant); some people say "good on you!" Ann should be paying 40% tax. Ann uses a bunch of weird interpretations of tax law to squeeze through loopholes. Ann has to keep changing her finances because the loopholes keep changing. Ann pays about 0.5%. Ann then claims that she can hire a cleaner, and so we should be grateful that the cleaner pays PAYE and can buy goods which will have VAT. At the same time as Ann and Bob are avoiding tax everyone is going through tough times; their jobs are at risk, their services are being cut. Everyone knows that rich people and companies avoid some tax. Most people really don't care, so long as some kind of tax is being paid.

jmedwards 14y ago

> Amazon has done a large amount of damage to the UK high street Contentious - damage, or consumer choice and therefore progress? > However I feel both are taking the piss when it comes to taxes While I have zero doubt these companies and others will be taking 101% advantage of the situation, don't forget that the situation has been created by our own governments and an unwillingness to modernise in the face of a globalised world. For example, it surprises most people to learn that this 'brand value' Starbucks charges itself for (or the fact that these companies charge themselves between entities in the first place) is in many ways a requirement of the corporation to abide by transfer pricing rules.

aes256 14y ago
> Contentious - damage, or consumer choice and therefore progress? It's a matter of whether there is a level playing field. I was shocked to hear the representative from Amazon admit yesterday that they only pay 3% tax on ebook sales through an agreement with Luxembourg. That's absurd.
epscylonb 14y ago
> While I have zero doubt these companies and others will be taking 101% advantage of the situation, don't forget that the situation has been created by our own governments and an unwillingness to modernise in the face of a globalised world. Ultimately it is the fault of the voters, and as another poster pointed out, this is about a level playing field, not "punishing" big multi nationals. What we have seen since the 80's is a corporate oligarchy being created, if you can get into it you are set for life. These people are Nixonian in their attitude, "it's not morally wrong when I avoid taxes". This also stems from the amorality of Ayn Rand's writings, in Randian thinking it is acceptable to expect others to follow a moral code which you yourself break and it's acceptable to admonish others for breaking it. Big companies don't actually create a lot of jobs, most companies over their lifespan shed workers as they become more efficient. For a healthy free market to operate, it is vitally important that the percentage tax burden is the same for small companies and large companies, governments should not be giving tax advantages to anyone. This economic cherry picking causes "too big to fail" syndrome. As a UK voter, if a political party said they would simplify the tax code and make all companies who operate in the UK pay taxes on their business here I would probably vote for them.

tolmasky 14y ago

> I am angry with Amazon and Starbucks. I feel both of these have a large presence in the UK. They employ thousands of people. > As for Google I feel it is less of a problem... They don't have a big presence in the UK. So let me get this straight, you are OK with Google not paying taxes because... they don't provide jobs to the UK? My apologies if I honestly misunderstood your post, but it seems really strange that you let Google "off the hook" since they ONLY remove money from your economy and don't even create jobs there. The way your post is worded its as if you are offended that Amazon and Starbucks provide thousands of jobs. If Amazon and Starbucks figured out a way to provide the exact same services they do today, minus all those pesky UK employees, would you feel less angry with them?

toyg 14y ago
I think it's mostly about resource usage. Google services don't really benefit much from UK infrastructure (except digital infrastructure, which is privately owned for the most part at this point in time). Amazon and Starbucks simply would not be in business without UK roads, UK police and other UK services; so Amazon and Starbucks are benefitting from taxpayer-funded services while not contributing their fair share to their maintenance. EDIT: sorry, I wasn't clear -- I'm not arguing that Google should be treated differently, I was just suggesting a justification for the difference in perception.
- ekianjo 14y ago
  Come on, roads have been paid back hundred of times since they were built, just like phone poles and most of the infrastructure. Now the governments in Europe are going after taxes because they are deeply indebted as welfare providers. Most of your taxes have nothing, nothing to do with the infrastructure or the maintenance of it.
  - mdpye 14y ago
    Because roads don't need regular maintenance? But that's beside the point, if you want to take a different view on it, a healthy population is a resource on which these companies draw. In the US model, companies also pay for this, direct to their employees private health insurers. But pay it they (mostly) do.

aes256 14y ago

> As for Google I feel it is less of a problem. They mainly deal in digital goods. They don't have a big presence in the UK. They just offer their online service's here. I don't buy this. It's absurd that a UK business can pay to place ads on the Google UK website, presenting them solely to UK consumers, and yet the money involved in this transaction never touches the UK. It goes straight to Ireland, then the Netherlands, to Bermuda.

lmm 14y ago
That's a business-to-business transaction, there wouldn't be any tax on it even if both companies were in the UK. There would be taxes on the profits of a UK company, which IMO is the wrong way to go about it; just tax the income made by UK investors who own shares in a company (wherever that company happens to be based). The money can bounce around through as many shell companies as you like, but at some point it becomes an individual's income; tax it there.
- aes256 14y ago
  We have corporation tax as well as income tax for a reason. I'm no accountant or tax lawyer, but it's obvious Google are playing games with the UK. According to their own filings, they made $4bn from UK sales in the last financial year. The representative yesterday shrugged it off and tried to make out all Google do in the UK is have a bunch of promotions/localization staff. They (Google UK Ltd) receive all their income from Google in Ireland, and end up reporting a loss, meaning they pay a nominal amount of tax to the UK tax authorities. $4bn in sales from the UK market and they pay UK tax authorities around $5mn in tax. That's why people are angry, and that's why their representative was getting laid into by MPs yesterday.

ekianjo 14y ago

I am angry with my Government and the Parliament. I feel both of these have a large presence in my country. They employ thousands of people, well actually millions of people. The Government has done of huge amount of damage to the High Street through increasing taxes and regulations. It has pushed a number of independent companies out of business. The fact that they are have no responsibility to tax payers, while being here, I find Abhorrent. Maybe you should consider what is really hurting the Economy. The fact that your government is borrowing 5 billions every two weeks on the markets to keep functioning because its damn broke and cannot handle a budget, or the fact that Google did not pay (while absolutely legal) a few hundred millions in last year. If you apply the 80/20 rule, I think your attention is well misguided.

jwoah12 14y ago
I really dislike this kind of logic. Just because a greater problem exists, does not mean nobody should be allowed to focus on anything else. Should I not be allowed to volunteer or donate money to Hurricate Sandy relief efforts in the NYC area because more people die of cancer?
- ekianjo 14y ago
  No, this means that you should be worried about the Cancer that is killing you (sovereign debt raising by hundred of billions every year) instead of the rash on your skin (a few millions X company did not pay over a year). It's all a matter of priorities, and proportions. And the media (usually state-controlled, at least partly) certainly want you to see the "skin rash" rather than their own mistakes, because you should be way more angry by how lax they are with YOUR money in the first place.
  - Tyrannosaurs 14y ago
    If I had cancer I'd still get a skin rash sorted out (and I don't think that's just a problem with your metaphor). Sorting out the government debt needs to happen but the 600-odd MPs and hundreds of thousands of civil servants employed by the UK government may well be capable of dealing with as many as two things.

youngtaff 14y ago

>Amazon has done a large amount of damage to the UK high street To blame Amazon is to only look at one side of the argument... What about the high levels of rent on the high street, and the costs of parking etc.? Councils, landlords and others all have played their part in the damage to the high street too.

Shivetya 14y ago

Why should they pay ANY tax? No corporation pays taxes, they simply collect taxes for whichever government entity has its hands out. The reason why this works so well is that in general people are ignorant. It also helps that many are selfish, thinking that since they don't buy from X they aren't subject to the tax somehow. So yeah, its annoying some companies are not paying into the local coffers but that is only the real issue being buried by those who like the populace clueless in tax matters. In the states, I am not sure how the UK works, we have withholding tax where taxes are deducted from our pay before we see it. It helps hide the burden of government. So does taxing corporations. Think about it, if every purchase you made had a line entry for "THIS IS THE EMBEDDED TAX" what do you think people would do?