It's been reported that McDonalds is moving its corporate HQ for all activity outside the USA to the UK. It was previously in Luxembourg, where its operations are currently subject to an EU enquiry.
We know remarkably little about this deal. Everything that follows is, then, speculation. Journalists are however calling me about it but as I am shortly going to be on a train across the Pennines on a long journey home from Manchester I will offer sme thoughts here.
First, this deal makes it looks as though Luxembourg is in tax haven decline. This is hardly surprising. After Luxleaks what has become clear is that its forward tax agreements may not be worth the paper they are written on and no corporate will want that. This is bad news for the Duchy, but no one should be crying for them: tax havens do not deserve our sympathy.
Second, I strongly suspect this deal is about Brexit. Remember that having the corporate HQ in the UK is in this case pretty much a paper exercise: the number of people involved may be quite small and no cash need flow through the UK or via sterling to reach the US head office. Intermediate HQs are by and large locations of accounting and tax convenience and not commercial significance. So being outside the EU soon will not be a commercial deterrent and may be a tax advantage. The U.K. is saying it will guarantee low tax rates. And the EU Competeion Commissioner will not be able to interfere any more. From Mcdonald's point of view both might appeal.
Third, the U.K. can and does offer forward tax deals and whilst they must be within EU and OECD guidelines I suspect that right now when the UK has remarkably little else to offer on the international stage these might be being marketed for all they're worth. McDonald's may not have any such deal; I stress I am talking generically, but when we can't do trade deals tax is on the agenda, I am sure.
So welcome to tax haven UK.
What a terrible definition of taking back control that is.
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I’ve always thought we were headed that way. Tax haven/holiday and shopping resort. These people are crazy.
They’ll probably pay less tax in UK than they were in Luxembourg
Interesting move and yes probably for tax advantage. The rest of the sector are worried about post Brexit and possible problems with low cost labour but McDonald’s are getting ahead with their labour reduction through the use of technology.
Increased productivity, use no tools to load the burgers/wraps..use hands instead.
Food hygiene taking second place to productivity.
I only go there for their coffee now, my health is too precarious at my age to risk food poisoning.
The biggest risk at McDonalds is from the reconstituted meat in the burger in my view and the fecal matter which regularly gets into the food chain.
The Tory plan for Britain has not changed since 2010.
It is that we compete globally by having a cheap workforce and lower than average taxation for the rich/corporations. They are obsessed with bringing other people’s money in to the country rather than producing home grown pounds.
Too many people haven’t realised yet that their labour and that of their children is to be sold down the river cheaply.
The long turn effects of the product may be harmful, but given the widespread use of processed foodstuffs, no worse than most other fast food/s.
The short-tern effects of poor food hygiene are almost immediate, frequently crippling, and occasionally fatal.
My training in food hygiene/preparation does not prepare me for people stuffing burgers/wraps with lettuce/onion/cucumber BY HAND.
Implements AREvavailable, but are frequently not used.
Unfortunately, poor hygiene is a common problem in food prep.
Assuming the UK won’t be a zero % tax haven, at some point we will come into conflict with multinationals using the UK as a tax haven eg over domestic revenue as in the case of Starbucks Vodafone etc. Can’t see us standing up to them in such scenarios.
We could lower VAT as soon as we depart…at least by the amount the EU extracts.
And there would be no further control of VAT rate/levy from EU.
And how is that going to work from a revenue perspective?