Brexit

[C8RKH]

An executive, out of control, as it is trying to implement the democratic will of the people whilst being undermined by those who want to stop the democratic will of the people and you think we should be proud?

I'm ashamed by the whole thing and of all the politicians from all sides 

[Barrykearley]

Old picture - but this pretty simply outlines the issue we have.

[PhilW]

Is the VAT on top of the “£350m” per week. Is this something else that is not publicised?

[Andyww]

Someone should calculate the figure of the entire amount of corporation tax on UK profits from the 300 multinationals which was lost to other EU countries such as Luxembourg, Jersey etc, including Apple, Ebay, Paypal which the UK has lost over the years as a result of EU membership. The figure would be huge.

[Bibs]

I'm not sure those companies ever paid much in Corp Tax, aren't they the ones with very clever accountants.

[ChrisJ]

3 hours ago, PhilW said:

Is the VAT on top of the “£350m” per week. Is this something else that is not publicised?

I think so.

There's also a percentage of tariffs (80%?) that we collect on the EUs behalf that is sent to the EU, which would go 100% to the treasury if we weren't in the EU.

[theelanman]

Im liking the cut of this chaps jib

https://www.bbc.co.uk/news/av/uk-politics-49827307/attorney-general-tells-mps-this-parliament-is-a-disgrace

[PAR]

0.3% of total VAT collected in Europe goes to the EU budget so for a country with a 20% VAT rate this is about 0.06%. 

The total contribution of the UK in 2017 was EUR16.4bn so EUR315m a week inclusive of GNI, VAT, agricultural tariffs and all contribution inclusive of rebate.

On the taxing of large companies in Europe (by large read American) the EU has been at the forefront of the fight regarding tax avoidance. For example Apple has been forced in paying back billions to Ireland.

The UK has been moderately supportive (which means not at all) of any effort to crack down on tax avoidance as the UK is a net beneficiary of corporate tax optimisation. Because of the financial sector in the city of London, the UK collects significant taxes on banks and other financial services performed by American and European banks in the EU and booked in London. This is something that is under scrutiny by most other European state looking to repatriate this tax bonanza.

 

[Andyww]

1 hour ago, Bibs said:

I'm not sure those companies ever paid much in Corp Tax, aren't they the ones with very clever accountants.

Thats exactly the problem. They should have been paying CT in the UK at the UK rate but end up paying 1% in Luxembourg thanks to the EU.

[Andyww]

19 minutes ago, PAR said:

 

On the taxing of large companies in Europe (by large read American) the EU has been at the forefront of the fight regarding tax avoidance. For example Apple has been forced in paying back billions to Ireland.

 

Utter nonsense. The EU has done naff all about it, especially Ebay, Paypal and others which were set up by Juncker. They have created the illusion they care about this but they dont. how can they be "at the forefront" of acting against a system they put in place themselves which permits profits to be declared in any EU country regardless of where they were earned?

The corporations did nothing illegal, they made use of the system, so they will never have to repay a penny. The courts have already ruled Starbucks did nothing illegal.

I often see on remain-supporters social media pages that the EU are "anti tax avoidance". It is a huge con. They give the illusion they are acting but they do nothing to change the system.

[PAR]

It think it would be very helpful if you could explain how the EU helped this practice and what the UK government tried to do about it and how they were blocked in doing so as I can’t find examples.

The latest development on this subject is the French tax on large companies selling goods online and challenged by the US potentially to the WTO. Do you think the UK government should try such mechanisms?

[Andyww]

10 minutes ago, PAR said:

It think it would be very helpful if you could explain how the EU helped this practice

Free movement of capital. Look at any Paypal or Ebay invoice and it will state it was invoiced by Ebay SARL or Paypal SARL (Luxembourg). 

VAT is also affected in addition to CT. When Apple were based for tax purposes in Ireland, all the VAT on intra-EU sales of downloadable products went to Ireland, which also meant customers had to pay the higher Irish rate of VAT. This might still be the case although corporation tax they now pay in Jersey.

16 minutes ago, PAR said:

 

The latest development on this subject is the French tax on large companies selling goods online and challenged by the US potentially to the WTO. Do you think the UK government should try such mechanisms?

Of course we should!

[PAR]

But the UK government hasn’t done anything about this. In fact they promise exactly the opposite that if they were to come out of the EU they will decrease tax rates for corporates and do a trade deal with the US that would most likely maintain/improve the ability of US corp to not pay taxes in the UK so shouldn’t you rather ask the UK government to act? (as there is nothing in EU law that would prevent them from implementing adequate taxes)

[Tomsk]

1 hour ago, Andyww said:

Free movement of capital. Look at any Paypal or Ebay invoice and it will state it was invoiced by Ebay SARL or Paypal SARL (Luxembourg). 

VAT is also affected in addition to CT. When Apple were based for tax purposes in Ireland, all the VAT on intra-EU sales of downloadable products went to Ireland, which also meant customers had to pay the higher Irish rate of VAT. This might still be the case although corporation tax they now pay in Jersey.

Of course we should!

It's complex and subtle than just setting up in Luxembourg or Ireland:

https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp

Basically, set up 2 Irish companies that sell via a Dutch (or Luxembourg) subsidiary to exploit the local variations in tax law and the Irish loophole that allows the money to be moved offshore untaxed.

A Tory government is unlikely to do anything about this though, either pre or post brexit since their desire is to turn the UK into a low tax, lightly regulated economy

[Andyww]

1 hour ago, PAR said:

In fact they promise exactly the opposite that if they were to come out of the EU they will decrease tax rates for corporates 

Which is what they should do if it results in a larger overall tax take. Corporations paying 1% in Luxembourg is indefensible no matter what the UK would do.

Although they have not confirmed they will reduce CT again other than bluster to scare the EU which is a correct approach. I think its very unlikely they would reduce CT by much, if at all.

Why would the UK do a deal with the US which facilitates not paying UK tax? The UK government might be somewhat incompetent but not that much!

George Osborne had an attenpt atdealing with the multinationals with "diverted profits tax" but it never really worked.

Corporations are well represented in Brussels:

https://corporateeurope.org/en/lobbyplanet

 

[PAR]

As mentioned by Tomsk it is a lot more complicated than this and most importantly membership to the EU has no impact either way on those particular questions.

For companies based in Ireland the tax treaty behind is the UK/Ireland convention of 1976 not the EU directives. The same apply with Jersey. 

Tax rate in Luxembourg is 17% so effective much lower taxes are due to other complex structuring and that won’t be an issue for company to have such rate going forward in the UK which ever way things go as long as the government maintains its last 40 year policy.

Regarding the choice of freedom of circulation of capital, this was unilaterally agreed by the UK (Netherlands and Germany did the same choice) in the 70’s (Labour government and reinforced by Thatcher) so far before Maastricht made it a pillar of Europe. In other terms the UK is one of the key sponsor of that pillar with Germany of that choice so that sounds difficult to see it changing unless Corbyn comes to power.

 

[Andyww]

But none of the above allows an order to be directly invoiced to the customer in the UK from Luxembourg. This is being done despite any pre-existing tax treaties not because of them.

To be fair, once Juncker is out of the way, things may slowly change in the area of EU tax avoidance. But its still inexcusable that this has been going on for years:

https://www.icij.org/investigations/luxembourg-leaks/why-has-the-european-commission-not-investigated-lux-leaks-tax-deals/

 

[C8RKH]

12 hours ago, Bibs said:

I'm not sure those companies ever paid much in Corp Tax, aren't they the ones with very clever accountants.

Thoms Cook had some smart arse accountants I'm sure and as usual they couldn't see the collapse in front of them.

[C8RKH]

10 hours ago, PAR said:

The latest development on this subject is the French tax on large companies selling goods online and challenged by the US potentially to the WTO

You need to decide if you are talking about the EU or member states. Not flip flop between the two.

[Barrykearley]

6 hours ago, C8RKH said:

You need to decide if you are talking about the EU or member states. Not flip flop between the two.

To be fair - if the EU looked at this then they would find I’m sure that what the French are trying to do isn’t legal in respect to EU laws

[Gm77]

I’m the last to defend the EU but much of the above isn’t really the EU’s fault and would be tricky for them to address in isolation. We have an international (read global) tax system that largely allocates rights for countries to tax global profits based on having employees on the ground in that country, and what they actually do. Its a principle that goes back to a time well before the internet was even thought of that basically meant if you want to sell something in a country you’d likely need people in that country doing the selling, and elements of a supply chain supporting that sale, also in country. This local substance would give that country a right to tax.
 

With the internet, and improvements in logistics and global trade, there are strong arguments to say that the old system doesn’t work effectively anymore. However, any new system has to be agreed globally, otherwise you end up with governments seeking to tax the same profits which isn’t great for a whole host of reasons. Reaching agreement on such a complicated change is not easy as there will be winners and losers. There is working ongoing on this though (at international not EU level) so watch this space.

And just on UK Corporate Tax, I met with a representative of the Treasury years ago who said they would rather abolish it and recover the lost tax from a small increase in the VAT rate - the tax take on CT isn’t worth the cost in administering it.

[Andyww]

But the EU make it easy in two ways, firstly single market rules, and second the way in which VAT works in the EU, which the UK has always been lobbying the EU to change since we joined but to no avail. Single market without a single taxation scheme is bound to cause problems.

The point about abolishing CT is a very interesting one. Same could be done with business rates. The biggest problem is if the Tories did this, the left and many mis-informed people in general would go ballistic and social media would explode. Many uninformed people believe that reducing CT is giving "the rich" a tax break. Its actually the opposite because CT is not levied on "the rich" as a company is not a person. If they paid less CT and more income tax for their employees they would be paying more tax as income tax is at a far higher rate. (assuming tax avoidance is not going on of course!).

Contrary to what's usually said on social media, Tory chancellor Osborne did far more than any other previous chancellor to clamp down on tax avoidance. Gordon brown did absolutely nothing. As well as diverted profits tax he ended many of the dodgy Isle of Man and other schemes which the likes of Jimmy Carr were involved in. and he also kept making extra tax raids on the banks.

[C8RKH]

As ever, informed reading. Thank you @Andyww

[theelanman]

I see the politicians are back to their own sweet ways again......

rather than getting on with it they're arguing the toss about nothing and getting offended by the improper use of language

to quote the most namby pamby one I heard........"moderate your language so we can all feel safe going about our jobs"

another one......"brought 'this honourable member' to tears..........the words surrender , capitulation, traitor and treason"

oh get a fikkin grip would you........

hows BREXIT going or are you just trying to delay it a bit longer by wasting time in venting your own personal frustrations about nothing

[Neal H]

I don't think it's about Brexit anymore (has it ever been?). Yes, the vast majority in parliament don't want to leave under any circumstances, but this is really about personal agenda's and power.

Labour - Don't give a damn about Brexit, they just want to topple the Tories and will adopt any approach that they think will help achieve that - anti EU - Pro EU - anti 2nd Ref - Pro 2nd Ref - Pro election - anti election. They swap around depending on which way they think the wind is blowing.

Lib-Dems - Their approach was dictated by their devastating result in the 2015 GE. Adopting a clear policy that they knew would make them appeal to the 48% who voted remain gave the potential for them to recover a lot of lost support. They knew they would never appeal to the other 52% but when you're recovering from rock bottom that doesn't matter, it's still a huge step back to potential political credibility. It was a clever strategy which has worked, but like Labour it wasn't driven by a desire to to do what's best for the country, it was to do what's best for the party.

SNP - A one trick pony - Scottish independence. Their sole agenda in parliament is to disrupt the the running of the UK that they don't want to be a part of.

DUP - They want to ensure that nothing interferes with or undermines NI's place in the UK (understandably). Nonetheless, it's still driven by their personal agenda, not the UK's.

Conservatives - Couldn't contain the internal splits on Europe any longer, compounded by May's government trying to be too clever by wasting years pretending to deliver Brexit whilst not really trying and hoping the problem would go away, while Johnson, Gove and their ilk sniffed an opportunity for the top job (who knows what their actual view on Brexit is).

And now they're scared to go back to the electorate. They're not fit for purpose.