Odd Things – Tax Paid by Giant Corporations

Starbucks, Google, Facebook, Vodaphone, Barclays and other multinationals pay no or very little corporation tax on the profits of their enterprises in the United Kingdom. This is because they do not make profits in the United Kingdom, for corporation tax is paid on the profits of corporations. Nevertheless they turnover billions of pounds in the United Kingdom but make technical losses here and therefore have no corporation tax liabilities.

Of course multinationals do contribute to the UK exchequer by the VAT and the employees payroll taxes that are generated as a result of their activities. VAT is not paid by traders – they merely collect the VAT that they are obliged to charge. Employees pay their own tax out of their own wages and their employers pay national insurance on the employees’ wages. Small businesses also make those contributions but have to pay corporation tax on profits or in the case of unincorporated businesses income tax on their profits.

Clearly multinationals find it profitable to trade in the United Kingdom but by virtue of their being multinationals can make money in the United Kingdom but not profits. It is a distinction without difference. It enables multinationals to undercut small businesses because they do not have to pay tax on income and they can use the money (and do use the money) to drive small businesses out of business.

I would love the opportunity to run my businesses without paying corporation tax or income tax on profits. It is odd that multinationals do have this opportunity and odder still that the government is not doing anything about it, save for trying to fill up the loopholes but in that they are creating more loopholes with the material they use for filler. Perhaps the next time you feel like popping into Starbucks or using Google you should think about that.

We have to accept that inn this world multinationals can and do shop around for beneficial tax loopholes to avoid paying tax on the profits they undoubtedly make here. The solution must be to tax these corporations on their turnover as well as on the profits. A 2% turnover tax (which can be credited against corporation tax) should end the exploitation of the tax system rather nicely.

4 Responses

  1. Well said.

    I think part of the problem is that successive recent governments have had no idea about wealth creation.

    A billion Starbucks coffee shops, even with a 2% turnover tax, will not make this country richer. We import the coffee and probably half the work force. Even after that, spending in coffee shops is like giving pocket money to your children. The family unit actually ends up poorer because it is spending £2.50 on something that costs £0.20. From an entreprenurial viewpoint you would have been better off investing in a coffee machine so that throughout your lifetime you could have had thousands of homemade coffees for the price of hundreds of Starbucks.

    Take Jaguar Land Rover. Now owned by an Indian family.

    Yes we have a significant export business which supports technology, local manufacturers and suppliers and employs thousands. But the profit ends up in the Cayman Islands or India. Worse, what would we do if Tata decided to move production to India or China?

    Just look at any old television programme or film depicting the 50’s – 80’s. Streets full of ‘Coventry made’ cars. Austin, Rover, MG. Sweet shops full of Cadbury’s sweets, Rowntrees fruit gums. Food shops with HP sauce (Houses of Partlaiment) Smiths crisps. etc etc.

    All English owned !!!!! and manufactured.

    Virtually everyting we now buy is from by multi nationals even if some of the product is assembled here.

    We are being ripped off. Any profit made is not re-invested or even spent in this country. We are being farmed and milked and it will continue until we are destitute or the government wakes up. Unlikely.

    Mr G Osborne, our chancellor, does not have the life experience necessary to understand that the just having a job is not good enough. Bearing in mind his only job was as a parcel packer for Harrods one summer whilst at University it is easy to see why. HE was born into wealth and privilege.

    Also bearing in mind one of his best friends is Nat Rothschild we can easily understand that Osborne’s attitudes are aligned with those multi nationals and banks.

    Whilst I agree that a turnover tax would be helpful I bet it would just be passed on in higher prices or lower staff wages.

    What we really need is not a turnover tax on multinationals but home grown and owned industry which has a stake in the future of this country. The Government could encourage this but success is far from guaranteed and woudl show over 20 years.

    Bearing in mind Cameron/Osborne may be out in 2 years he is unlikely to do anything, even if he had a clue, which he hasn’t.

    • The ruling classes have also been dumbed down from entering the chosen mind schools they frequent, they also own much of the land to fall back upon, sovreinty is secondary in their eyes, this is why they sell off everything we built bar the land, they are taught to feed off of us, not themselves.

      This is where the term. They think we owe them a living. Comes from.

      If people did more for themselves, they would value it much more.

      We really are on our own, time to reskill and regain our freedom once again.

  2. The route out of the corporate claws has been mentioned here, make your own, learn how to make your own, show others how to make their own. The paradigm has by design been dumbed down and their skills from schools been decimated.

    It is what we do as a nation of self pelf workers that really matters, as individuals not a cooperative, disguised as a fair corporate, we must reskill and reward the innocents, not defend the guilty creating the instability.

    Without a skill we loose the will, and die every day our hands lay idle.

  3. This might intetest some, a long listen but historically correct, and what is now happening once again, pardon his colonial whit, but he means well.

    http://fdrurl.com/HHO

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 328 other followers

%d bloggers like this: