Monday, 3 December 2012

An interesting conversation

So... HMRC are to aggressively pursue multinational companies that pay a legal, but low level of tax in the UK.  That should make for some fun exchanges, depending on the attitude of the company concerned.

Taxman: "We think you should pay more tax"

Company: "We're paying what the law says we should pay.  How do you plan to force us to pay more?"

Taxman: "Errrrr...."

Or, if the company is scared of villification by our newly-regulated State approved media the PR consequences:

Taxman: "We think you should pay more tax"

Company: "Yes, we agree.  How much more should we be paying?"

Taxman: "Great, let's look at the rules... now... says here you should be paying, err, the amount you are already paying... oh."

Thinking around the issue, though, the problem is that these foreign-owned companies are able legally to export their profits to low-tax regimes.  So, there are two aspects to the issue:
  1. that these companies which serve great* coffee, provide such attractive Internet services, and are such efficient retailers are all foreign
  2. that there are other jurisdictions with much lower corporation tax rates
Let's rephrase this, shall we:
  1. No-one in the UK managed to set up a Starbucks, a Google, or an Amazon
  2. The UK has an attitude which is distinctly unfriendly towards entrepreneurs, reflected in high corporation tax rates and an angry mob who descend on anyone who isn't paying a "fair"** share
Could these two possibly be connected?


**defined as "an unspecified amount, more than you are paying now, and certainly more than I have to pay"

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