Nils Pratley in the Guardian this morning:
The bigger [tax avoiding] fish are the likes of Amazon and Google, where the argument concerns where the "economic activity" happens. In the case of the former, there ought to be a commonsense answer: when the customers, most employees and the distribution centres are in the UK, the Luxembourg operation is not at the heart of the business. It cannot be beyond the tax system to recognise that fact.
Quite so. Of course it must be possible. It's very convenient for some to argue otherwise. Our job is to ignore them.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
The current UK and EU laws – both legislation and case law regarding transfer pricing and controlled foreign recognise and require economic reality. The problem is that rather than enforce the law HMRC prefers to do deals with multinationals. What Starbucks have just done openly is what multinationals do in secret routinely; hence HMRC’s and other multinationals’ anger with Starbucks for exposing what they have long conspired to cover under the guise of taxpayer confidentiality. Dave Hartnett even did a deal with Vodafone collecting £6billion less than their provision for the case AFTER the company lost its main controlled foreign company case in the Court of Appeal and were refused an appeal to the Supreme Court.
Quite so, Richard (I assume you mean beyond the ‘wit’, not with :-)). It shouldn’t be and it isn’t. Indeed I wonder how many HMRC staff used Amazon’s services and noted the despatch addresses for their packages and parcels. Indeed, their warehouse near Milton Keynes is so large it’s hard to miss, and they have other’s scattered the around the UK too.
So let’s be clear, what this ‘blind spot’ demonstrates is the extent to which the operation and culture of HMRC has been corrupted by senior management who were pursuing ideologically driven policies – supported and promoted, I have no doubt, by the Treasury and, in turn, by a succession of their political masters. That last point is important because too often in the debate that is now so public politicians are very good at painting their officials as at fault (SPADS may well be, of course, but they are a different kettle of fish entirely), when in actual fact what they are doing is simply following the explicit (through policy) or implicit (through other ‘informal’ means) direction given to them by ministers.
The most recent examples followed the autumn statement. Osborne: invest in HMRC and what a marvellous deal the tax agreement with the Swiss is. Complete bollocks and smoke and mirrors. But it sets the agenda for the Treasury and HMRC management and officials, as does the race to the bottom in corporation tax. On the latter, make no mistake what the aim is. To take it so low that they’ll be little point in any corporate trying to avoid it. Result: massively reduced avoidance, and loud claims from the Tories before the election about how effective they’ve been at tackling this. Other result, the burden of paying for the fabric of this country pushed onto ordinary tax payers.
Agreed
Typo corrected!
Perhaps you could now correct Ivan’s grammar (“they have other’s”):o)