Tory economy lies.

Maybe Starbuck’s turnover and profits are dropping!! :rolleyes:

Indeed!! I have as well, CD……but just a parting shot. Actually the ONLY source of income for ANY government is tax. Be it from individuals or companies or duties – bear in mind that rulers globally have always had to tax their populace to pay for their wars and is it ever thus?!!:rolleyes:

Oh well, back to the drawing-board then. 😀

It’s a paradox isn’t it; governments want to tax as much as possible because they don’t have any money (and are in fact heavily in debt) and they need to pay for the things that the voters want yet the one thing that the voters don’t want is a government that taxes them as much as they need to be taxed to pay for the things that they want!

It wasn’t until I worked my way through some of the basic economics of this thread that I came to an awful truth…

…(barring exports) the only real source of income for the UK government is the UK taxpayer! And we’re both broke!

I’m now going to go back and see why I joined this thread and to see how I got to here.

Anyway I’ve enjoyed having somebody to discuss it with…..thanks. 🙂

Your problem will be that most governments like to tax as much as possible and in the case of the last government in as complex a way as possible. VAT brings in 20% on most things we all buy or have to use and then they get another 20% give or take on size of company on their profits so as always it’s win, win for the government. In any case, as I have said, we cannot have a sales tax and VAT under EU rules so your plan will not work until we leave the EU.

I will continue to maintain by fervent desire for a transparent simple direct and indirect tax system which would save billions in HMRC costs and millions in accountancy costs.

So, since it doesn’t matter to the customer, the company or the government where the actual point of tax is, since it is all paid by the customer (through the company) to the government then maybe a tax based on sales rather than profit would avoid companies that contrive to (apparently) make no profit (when actually they do) avoiding paying the existing corporation tax that is paid only on profit.

That is my point.

Well yesss…..that’s actually what I have been saying all day.
And in even simpler terms if customers didn’t buy any of the products there would be no business, no profit, no tax and no emloyees so I am not sure what your point is.

Sales tax is paid by the customer.

VAT is paid by the customer.

Corporation Tax is paid by the company on profits it gets from the customer…

…so Corporation Tax is actually paid by the customer!

If a company breaks-even then the employee wages are paid by the customer so the employee’s Income Tax and National Insurance is paid by the customer.

So in every case tax is paid by the customer.

But (under my suggestion) they’d pay a sales tax on all their sales in the UK.
.

No, a sales tax is paid by the consumer, as I have pointed out previously. Your tax is a levy on specific products sold by particular companies on top of the VAT levied.

But (under my suggestion) they’d pay a sales tax on all their sales in the UK.

Because of the freedom to trade in the EU companies can move their ‘headquarters’ wherever the tax is lowest; but they can’t move their customers.

I don’t care if they are headquartered in the UK or not; I care if UK consumers spend their money in the UK with companies that don’t pay any corporation tax (or any sales tax) or any VAT to the UK government.

I care if I buy an e-book from Amazon I pay the Luxemburg government 3% VAT and the UK government none (even though the UK VAT rate on e-books is 20%).

“Companies such as Amazon collect the VAT levy from consumers before passing it on to governments. In the case of Amazon’s UK e-book sales, it only has to pass 3% to Luxembourg. If it was based in the UK it would have to hand over 20%.”

http://www.guardian.co.uk/technology/2012/oct/21/amazon-forces-publishers-pay-vat-ebook

I care if Starbucks only paid £8.6m in total UK tax over 13 years during which it recorded sales of £3.1bn.

I care if Starbucks UK has to pay Starbucks USA a ‘royalty’ of 6% (on all sales?) for selling coffee ‘the Starbucks way’.

“A 4.7% premium is paid to the Dutch division of Starbucks – the regional headquarters – for rights images and the coffee recipes. The premium, which used to be 6% before Her Majesty’s Revenue & Customs (HMRC) asked for it to be lowered, also includes the cost of the roasting process that takes place there.”

I care if Starbucks USA lends Starbucks UK money and then Starbucks UK pays it back with high interest so that Starbucks UK, apparently, makes a loss (and pays no corporation tax).

“Starbucks also paid other group companies for unspecified services, including an unknown Swiss-based associate. The Europe, Middle East and Asia division, which oversees the UK operation, also loans cash for investment, which it then charges interest on. This can be written off against tax.”

http://www.guardian.co.uk/business/shortcuts/2012/nov/13/starbucks-your-tax-questions-answered

I care that in all these cases the ‘lost’ tax still needs to be made-up and so is collected by the UK government in increased payments from other companies that do pay their tax or from UK taxpayers.

One wonders why, if they make no profit, they are so keen to expand into the UK at all? :confused:

You miss the point. Your suggestion would mean that head-quartered here, they would pay no tax at all because corporation tax would be abolished.

At the end of the day the tax would be paid by the same people…..the customer.

exactly.

So, assuming I have understood, the company no longer pays any tax at all on its profits. We would be overwhelmed with companies moving here to benefit from zero tax on profits.

Well, we already seem to be overrun with companies like Starbucks that make no profit…..and therefore pay no corporation tax! :rolleyes:

One wonders why, if they make no profit, they are so keen to expand into the UK at all? :confused:

My thinking was that if these companies claim they make no profit we should transfer the tax onto their sales; they can hardly claim they make no sales!

At the end of the day the tax would be paid by the same people…..the customer.

I cannot comment on this really because I have read no figures for Costa Coffee.

But if it were Starbucks then according to the Guardian:

“Starbucks paid no corporation or income tax in the UK in the past three years, it emerged last month. The world’s biggest coffee chain paid £8.6m in total UK tax over 13 years during which it recorded sales of £3.1bn.”

http://www.guardian.co.uk/business/2012/nov/12/amazon-google-starbucks-diverting-uk-profits

Presumably the local coffee shops in Bingham pay corporation tax at a higher rate than this?

😮 I’ve now decided my best new business opportunity is ‘flogging dead horses!’

So, assuming I have understood, the company no longer pays any tax at all on its profits. We would be overwhelmed with companies moving here to benefit from zero tax on profits.

But of course neither you nor I can calculate the net result of your scheme on the total tax take. The other problem could be that purchase tax is not allowed under EU regulations. It was that tax which was ended when we had to introduce VAT, which effectively replaced as a tax on the purchase of a good or service.

If a company buys an item for £1 and sells it for £1.50 the 50p is not net profit but gross profit out of which all the costs are deducted, so the net profit might be 10p, for the sake of argument. But those costs will vary from product to product. On what do you levy your tax?

Well, let us say, for the sake of argument, that the rate of a purchase tax is set at 1.66% (awkward numbers) for all products and is independent of VAT.

So the customer would pay £1.50 plus 30p VAT and 2.5p purchase tax which is obviously more…

…but the seller wouldn’t have to pay any corporation tax and so the seller has the option to lower the sale price to reflect that fact. The seller still has control over the greater part of the gross-profit (less the purchase-tax) to account for the variations in profit over various products.

Honestly, I really don’t know if this is a better system but if the purchase tax went straight to the treasury then it may stop big multinationals that expand into the UK claiming that they didn’t make any profit so didn’t have to pay any corporation tax…

…if they don’t make any profit from the UK…..why are they ‘investing’ millions to be here? :rolleyes:

How would Google (for example) feel if the UK sent them a corporation tax bill for profit on sales that they had made in the USA…

Since they already pay their taxes in full in the US, probably a tad annoyed…..;)

But I still hope to be convinced by your scheme in response to my last comments on it.

Since you cannot tax a tax…

Unless it is VAT on petrol or diesel!

Matt Brittin said it very succinctly in the quote I posted.

Except the UK politicians cannot set the tax rates in Ireland where Google pays their tax on profits that they have made (mostly) from consumers who are not Irish.

The businessmen are very quick to blame the UK tax system when they have done something that deliberately circumvents it.

How would Google (for example) feel if the UK sent them a corporation tax bill for profit on sales that they had made in the USA…

…I guess they’d claim that that was ‘immoral’? 😀

Because “purchase tax” is paid by the consumer and “corporation tax” by the supplier of the goods.

If a company buys an item for £1 and sells it for £1.50 the 50p is not net profit but gross profit out of which all the costs are deducted, so the net profit might be 10p, for the sake of argument. But those costs will vary from product to product. On what do you levy your tax? Since you cannot tax a tax, the VAT will have to be calculated on the net amount before your tax is factored in. It sounds like a complex minefield to me and our tax laws are already about 5 times as complex as they were in 2000.

What we need is a far, far simpler transparent system which encourages businesses to come here, and to pay their taxes without the recourse to loopholes becauae there is little or no incentive to do so. Matt Brittin said it very succinctly in the quote I posted.

…how by taxing anything at the point of sale in this new theoretical business are you making Costa pay any more tax?

I cannot comment on this really because I have read no figures for Costa Coffee.

But if it were Starbucks then according to the Guardian:

“Starbucks paid no corporation or income tax in the UK in the past three years, it emerged last month. The world’s biggest coffee chain paid £8.6m in total UK tax over 13 years during which it recorded sales of £3.1bn.”

http://www.guardian.co.uk/business/2012/nov/12/amazon-google-starbucks-diverting-uk-profits

Presumably the local coffee shops in Bingham pay corporation tax at a higher rate than this?