CyclopsRock
Member
I'm not quite sure why you're saying that as if disabled people being a drain on the economy was the platform upon which Cameron was made PM.
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Starbucks has paid no tax in UK since 2009
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I'm not quite sure why you're saying that as if disabled people being a drain on the economy was the platform upon which Cameron was made PM.
They didn't make a profit of 1 billion. Revenue is not profit. Tax is on profit.
If I spend 100 to make and sell something for 110, I get revenue of 110, but only profit of 10.
If I spend 1 and make and sell something for 11, I get revenue of 11, but profit of 10.
although people get taxed on their revenues, with a few exceptions. We don't get to deduct all of our living expenses from our taxable income.
Businesses do.
although people get taxed on their revenues, with a few exceptions. We don't get to deduct all of our living expenses from our taxable income.
Businesses do.
You get to deduct all your business expenses, just like businesses.
Businesses cannot deduct non-business expenses.
Guerrillas in the Mist
Member
If only there had been a Labour govt in charge when Starbucks had set up in the UK in 1998.
No wait...
This isn't a labour or tory issue, it's just an issue that both are guilty of not stopping.
Oh, I'm not singling out the Conservatives on this one, I just find it amusing that they consider themselves more in favour of entrepreneurship and start-ups when they're just as pro-corporate as New Labour were.
Sqrt_minus_one
Member
You get to deduct all your business expenses, just like businesses.
Businesses cannot deduct non-business expenses.
Unless I am missing something I dont get to deduct my travelling expense as a salaried employee unless I become a contractor.
Why are businesses not just taxed on revenue as opposed to profit? Obviously at a lower rate.
Unless I am missing something I dont get to deduct my travelling expense as a salaried employee unless I become a contractor.
Why are businesses not just taxed on revenue as opposed to profit? Obviously at a lower rate.
Because that's a somewhat silly idea. Particularly for small businesses. Someone buys something in for £20, sells it for £30, they shouldn't really have to pay tax on £30.
Bony Manifesto
Member
Because that's a somewhat silly idea. Particularly for small businesses. Someone buys something in for £20, sells it for £30, they shouldn't really have to pay tax on £30.
Isn't that exactly how VAT works?
I don't know which tax jurisdiction you are in, but you can deduct business travel expenses in the US, even as a salaried employee:Unless I am missing something I dont get to deduct my travelling expense as a salaried employee unless I become a contractor.
Why are businesses not just taxed on revenue as opposed to profit? Obviously at a lower rate.
http://www.irs.gov/pub/irs-pdf/f2106.pdf
If it costs me $200 to make a widget, and I sell it for $500, and another person spends $450 to make a widget to sell for $500, is it fair to tax both of us on our $500 revenue?
VAT is a tax on consumption, which is different from a tax on revenue, which is different from a tax on income.Isn't that exactly how VAT works?
I don't know which tax jurisdiction you are in, but you can deduct business travel expenses in the US, even as a salaried employee:
http://www.irs.gov/pub/irs-pdf/f2106.pdf
If it costs me $200 to make a widget, and I sell it for $500, and another person spends $450 to make a widget to sell for $500, is it fair to tax both of us on our $500 revenue?
VAT is a tax on consumption, which is different from a tax on revenue, which is different from a tax on income.
I would say yes, but I recognise I am in a minority opinion on that one. If I am paid $50,000 and it costs me 20k to live, and another person spends 45k is it fair to tax both on revenue?
Taxing on profit is actually harder for well run businesses that make a profit, and encourages all sorts of accountancy shenanigans to reduce on paper profit.
Taxing on revenue would make it harder for new businesses or those in emerging or small markets though.
If it costs you $20k to make that $50k, and the other person spends $45k to make $50k, it's not fair to tax both you and the other person the same amount.I would say yes, but I recognise I am in a minority opinion on that one. If I am paid $50,000 and it costs me 20k to live, and another person spends 45k is it fair to tax both on revenue?
Taxing on profit is actually harder for well run businesses that make a profit, and encourages all sorts of accountancy shenanigans to reduce on paper profit.
Taxing on revenue would make it harder for new businesses or those in emerging or small markets though.
Personal income tax is still a tax on income and not a tax on revenue. And even then, there usually are deductible expenses or tax credits for things like health, education, childcare, etc.
CyclopsRock
Member
I'm advocating removing these loopholes. Obviously the less loopholes the better, though I'd say now because of the loopholes these larger companies have enjoyed, it puts smaller businesses at a massive disadvantage and I do believe this should be considered.
But I believe that's the kind of thinking that leads to these 4-book tomes of legislation. The idea that you can tinker with this to help that industry or alter that to help this demographic. That's the problem, not the solution. There might always be loop holes, but the more there are, the easier they are to find and the harder they are to sew up again.
travisbickle
Member
But I believe that's the kind of thinking that leads to these 4-book tomes of legislation. The idea that you can tinker with this to help that industry or alter that to help this demographic. That's the problem, not the solution. There might always be loop holes, but the more there are, the easier they are to find and the harder they are to sew up again.
The word loophole is used because of its old meaning as a small hole on a building that's difficult to discern its function, the holes usually being used to fire arms through or let people spy.
Sqrt_minus_one
Member
I don't know which tax jurisdiction you are in, but you can deduct business travel expenses in the US, even as a salaried employee:
http://www.irs.gov/pub/irs-pdf/f2106.pdf
If it costs me $200 to make a widget, and I sell it for $500, and another person spends $450 to make a widget to sell for $500, is it fair to tax both of us on our $500 revenue?
VAT is a tax on consumption, which is different from a tax on revenue, which is different from a tax on income.
It is an unfair tax penalising those in highly competitive industries with low profit margins more than those monopolisitic entities with much larger profit margins. But as Dead Man points out taxation on profits leads to significant tax avoidance measures, as seen with Starbucks, hiding revenue is a bit more difficult.
how does paying a 6% charge for licensing 'intellectual property' let you take it off your tax bill? Surely thats just a cost you have to cover like many other businesses?
You only pay tax on any set of money in one country. That 6% goes to a Starbucks unit in another country. So instead of paying 30% UK tax on it, it pays the rate in the other country which for example in Switzerland may be only 2%.
Are we sure about that? What's the tax rate? 20%? And Starbucks have around 700 stores in the UK, each with an average of 4 employees. That's 2,800 people. Assuming they all get paid 20K, that's £56m potentially input into our economy. But they made a profit of around £1b. If the tax rate is 20%, that's a potential £200m that they owed the nation.
Am I doing this right
Starbucks stats are the following:
Sales: £398m
Staff: £124m
Admin: £107.2m
Rent: undisclosed
You're probably looking at around £30M in employee taxes and another £80m in VAT. Even if Starbucks didn't try to avoid tax, they'd only be paying around £10M or so in corporation tax.
Whether tax minimisation is a bad thing depends on what the companies do with the money. If they use that money to create jobs so people are off the dole and paying tax and National Insurance well that could work out to be a good thing overall.
Sounds like UK tax law is messed up.
If they aren't breaking any tax laws, and it doesn't look like they are, then you guys should close that loophole.
The only way to fix it is to ignore the invoices companies charge themselves from overseas subsidiaries as a tax deductable item.
Good luck sorting that out.....
travisbickle
Member
but think of all the jobs they've given to council bin men cleaning up their rubbish, police officers protecting their property, and the public network system allowing good access for customers and workers to their premises...
http://www.bbc.co.uk/news/business-20022365
EBay 'pays £1.2m in UK tax' on sales of £800m
EBay 'pays £1.2m in UK tax' on sales of £800m
US auction site eBay has paid only £1.2m in tax in the UK, according to an investigation by the Sunday Times.
The newspaper said that its tax bill in 2010 comes despite eBay's UK subsidiaries generating sales of £800m.
The auction site - which also owns PayPal - responded that it "complies fully with all applicable tax laws".
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