Amazon tax petition heading to Downing Street
A petition is due to be delivered to Downing Street by independent bookshop owners Frances and Keith Smith, who run Kenilworth and Warwick bookshops.
The petition calls on Amazon to “pay their fair share of tax in the UK” saying “The unfair advantage that your tax dodge gives you is endangering many UK high street businesses” and imploring them to “Please do the right thing”.
The petition reached 100,000 signatures but in the last few days has soared to almost 160,000 signatures. The Smiths say that Amazon paying little or no Corporation Tax in the UK is “not a level playing field and leaves independent retailers like us struggling to compete just because we do the right thing. Experts say if Amazon’s total UK sales profits were not funnelled to Luxembourg, it could be paying as much as £100m a year in British corporation tax“.
Amazon are of course not the only business under fire for their tax arrangements. Eric Schmidt, Google’ chairman claims that paying little UK Corporation Tax is just “the way taxes are done globally“. Google diverts most of the £3.1 billion generated from the UK into Ireland and paid just £7.3 million in Corporation Tax last year.
In a Radio 4 interview Schmidt said that the £6m Google paid in UK corporation tax back in 2011 complied with all applicable tax laws and brushed the issue aside saying that the the Google tax arrangements are similar to many of other companies. He also pointed out that British multinationals with operations in the US were using similar tax arrangements.
Starbucks famously diverted most of their profits overseas and then made a donation to the UK Exchequer to try and quell complaints, but tax should not be a voluntary donation – each company and individual should pay their dues.
The one surprise is that eBay have so far escaped the public flogging and whilst they’re probably very happy to see Amazon, Google and Starbucks taking the flack it’s not just those three companies who are avoiding UK taxation.
The blame can’t be laid at the door of the companies avoiding tax either – it’s the UK and EU legislators who write the tax code that enables them to operate internationally and it’s the legislators who should close the loop holes being exploited. If the UK public want to see more companies paying their share of tax in the UK based on profits generated within the UK then the tax laws need to be amended so that the tax can be collected.
Eric Schmidt of Google agrees saying on Radio 4 “I think the most important thing to say about our taxes is that we fully comply with the law and we’ll obviously, should the law change, we’ll comply with that as well“
“should the law change, we’ll comply with that as well“
I think that’s the important bit. No-one can blame anyone for paying as little tax as possible. I daresay that many online sellers form Limited Companies as they can pay less to the revenue in doing so. Its perfectly legal.
What the government needs to do is lower the corporation tax rates, to compete. Then more companies will pay taxes in the UK – so even though the rate is lower, more people will pay it and the amount of tax received should be higher.
What the government needs to do is to consider the tax revenue it collects from UK companies on their overseas earnings and the potential impact on this revenue stream of any noose tightening measures on overseas companies that export UK generated profits overseas.
We should not forget that the UK has UK based multi national companies.
One other thing. Corporation tax rates across the EU should be identical.
As an example Ireland has been given massive EU bailout packages. Why should their corporation tax rates be lower than elsewhere in Europe? Same with Cyprus. And the UK has given Ireland £11B that the UK has had to borrow adding to its debt pile! It does not make any sense. And then we have Luxembourg and so on and so forth.
There is really no point in bashing companies for simply following the laws. You can not tell me that everyone one do what they could to avoid paying tax as long as it is legal. I can bet even this book shop claim as much as they are legally allowed to through their books so they don’t pay so much tax.
I don’t think the laws should be changed as it would damage business and these big businesses would just find another way around it. What the time should be spent on is searching out companies and people that are not working within the law, I bet there are millions of these in the UK, doing ‘cash’ deals etc.
Of all the tax paid by companies I personally think that corporation tax is the only reasonable tax. If you make a profit then a percentage should go to the tax man.
The tax that hurts the most is VAT which has to be paid even if a company is just about breaking even or making a loss.
I am far happy paying a tax on profits, even if that percentage was increased, but paying VAT just slows business down. Reducing VAT and increasing corporation tax would help smaller companies get established especially during the early years.
Perhaps someone would ask Frances and Keith Smith whether they would pay less tax if they could. The answer, as with everybody if they were asked, would be yes.
Utter tosh this. Nothing but PR seeking nonsense.
But amazon is a corporation not an individual – your question is a straw man.
Do large/global business have an unfair advantage when dealing with tax?
If there is an unfair advantage is that to the detriment or the benefit of the UK economy as a whole and small business in particular?
Of course Large Multi National Corporations have a major advantage over us mere mortals in regard to Tax. To start with they operate in numerous Countries and can and do switch their cash, profits, turnover, etc from country to country to take advantage of the different tax regimes. None of us, who all essentially operate in one Country, have this ability.
In addition Tax Accountants are expensive. A Multi National can afford to employ the best who can juggle the company between the various Tax Regimes to take advantage of the different regimes.
In addition the very switching of cash, profits, turnover, etc between tax regimes means that there is no Tax Authority who can keep a check on the amounts declared in the various tax regimes. So it is possible that you could(in theory) take the declarations in the Companies Accounts as declared on Wall Street(where the declaration is probably going to be as high as possible to impress the Bankers) and then collect up the declarations made in all the various Countries that the Multi National Operates in(where in each Country the Multi National is probably more interested in declaring the minimum possible) and find that there is a very serious difference.
Why? Well if the Company declares a World Wide Turnover of say $4 Billion but an analysis of their Tax Declarations across the Globe comes to say $2 Billion its the company that benefits. Then with all the items that they can claim against tax taken into account it will mean that the Multi National may very well pay little or no tax and that that it does pay will be declared and paid in Countries with a Low Tax Rate.
So taking the UK economy if the Cash, Turnover, Profits etc are all transfered to other countries where Tax Rates are lower it means that the UK economy is not benefiting. The millions in tax that should be paid in the UK is being paid(or some that should be due is being paid elsewhere). So the New Hospitals, Schools, Railway Lines, Roads etc that the Government wants to build have to be financed elsewhere and that is out of the pockets of those of us who do pay our tax in the UK.
So perhaps the EU as a whole should sit very hard on Multi Nationals who are playing games. Or if the EU fails in this as it has failed in so many ways we should get out of the EU and bring in our own Tax Regime that is very hard on Multi Nationals who are playing games. Obviously those Multi Nationals who play it straight would not be in the firing line. But surely this is how the HMRC operates with ordinary Tax Payers. If you make your declarations and pay the correct tax then the HMRC does not give you any grief. But if you try to be clever and dodge your tax then the HMRC can and does give you grief.
I’m sure if the government wanted it could make sure these companies pay something.
I think it’s more likely that half the politicians have some vested interest in these corporations and therefore brush it aside.
If someone gave me 2 options and said pay corporation tax or don’t. Both were legally allowed. I know which I would opt for.
We get SO much taken off of us for working DAMN hard.
Dartford crossing will be free when it’s paid for TOSH !!!!
Time for a cuppa !!!!