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Facebook paid £4,327 corporation tax in the UK in 2014

bbc.co.uk

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Re: Facebook paid £4,327 corporation tax in the UK in 2014

#131

Post by phillc73 »

SmellyGeekBoy wrote: post #92
TomGullen wrote: post #82

Earlier quoted context omitted.

Just FYI, when you do need to register for VAT make sure you check out the benefits of Flat VAT, for us it was significantly more economical then regular VAT registration. I'm constantly surprised how many accountants don't seem to even make their clients aware of this option.

Thanks for the advice. I was pretty close to the threshold last year and it's looking likely I'll have to register this year so I'll certainly look into it. I'm actually between accountants at the moment, although HMRC's own PAYE RTI app at least makes that side of things ridiculously easy for me. I certainly wasn't looking forward to dealing with VAT on my own.

When I started my UK Limited company I immediately registered for VAT, so I could claim VAT paid on purchased startup equipment, which was mostly computing goods. I could then obviously offset that against VAT collected in the first months of business.

I quickly discovered that quarterly VAT returns were a pain, and accountants aren't cheap (for some definition of cheap).

I am also just a one man band at the moment, and de-registered for VAT about a year ago. Unless there are significant savings to be made, or you're over the £82k per annum revenue threshold, factor in the cost of the effort to submit these returns. They really are just a distraction from the main focus of your startup business.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#132

Post by guard-of-terra »

mattmanser wrote: post #117
raverbashing wrote: post #93

Earlier quoted context omitted.

Well, how much Apple money stays outside of the US because it was paid there? Also, how much VAT and other taxes are charged in an iPhone sold in Europe Same for Facebook, their ads generate VAT. Their employees there pay income tax.

If I didn't buy an iPhone, I'd buy a different phone. The VAT would still be there. If I didn't use Facebook I'd be using a different image sharing service, or chat service, or whatever. The VAT would still be there. Because I have a budget to spend on entertainment, and various companies compete for that budget. We pay those taxes, Facebook/Apple doesn't 'generate' anything, that money would be spent on a different…

Before Apple did iPhone, modern mass-market smartphones didn't exist and VAT from old-school smartphones was probably 10% of what it is today.

Before Apple did iPad, VAT from tablet sales was virtually zero.

I think you should tax what is easy and straightforward to tax; not aim for a "perfectly fair taxes".

Anyway, it shoud be good to you that you are paying taxes and not Apple. Next time Apple wants to ban phones with square screens, you tell them to back off because they don't pay taxes. You should get a voice here and you should to get your message straight. If you can't - blame your government and work towards digital democracy.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#133

Post by adaml_623 »

guard-of-terra wrote: post #125
exDM69 wrote: post #77

Earlier quoted context omitted.

Apple is a particularly difficult case, because they control every link in the chain of supply from manufacturing to retail and pay less than 1% effective corporate tax from their profits. From every step of the supply chain. It is very difficult, if not impossible, to compete with Apple without having a similar end-to-end control of manufacturing to retail. If a company has to purchase their products from a manufact…

Apple sells a huge number of physical devices - phones and tablets. They created a new market, and now governments are able to collect VAT and sometimes customs tariffs on all those smartphones. Why not let Apple have what's left?

Because we have quadriplegics who need 24 hour care so they don't die. Just to choose one random example of why we choose to have a government that levies taxes and provides services.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#134

Post by petercooper »

TomGullen wrote: post #105
stegosaurus wrote: post #68

Re-posting my comment from the Guardian thread that came up earlier ( https://news.ycombinator.com/item?id=10371728 ) Corporation tax in the UK is payable on 'profits subject to corporation tax'. In laymen's terms this is roughly equivalent to to accounting profit. Employee salaries, bonuses, etc are generally deductible; if you pay me 50K, that's 50K out of your bottom line. The employees in question likely pay a va…

What about scrapping corp tax, and replacing with a higher VAT rate?

The public would go mental. VAT is seen as being most onerous on low earners.

Something like a very low "turnover tax" for businesses could potentially work though.

We take about £40bn in corporation tax each year. Total business revenue in the UK is around £3.2tn, so a 1.25% turnover tax would cover it.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#135

Post by JupiterMoon »

ghiculescu wrote: post #118
JupiterMoon wrote: post #107

Earlier quoted context omitted.

This argument is not valid. Yes they are paying VAT and income tax. So what? They should also be paying corporation tax. A start up competitor would have to pay VAT, income tax and corporation tax.

Not if that competitor made a loss the way facebook has here.

These losses are paper losses. These type of paper losses are far easier for big multinationals to make than smaller domestic businesses.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#136

Post by speleding »

exDM69 wrote: post #77
jkahn wrote: post #12

Global companies offshoring profits and not paying enough tax (in the eyes of many countries) was a hot topic at the last G20 summit in Brisbane. This isn't limited to Facebook, as the article explains. The issue and background here is that when large companies operate globally, each country has its own local subsidiary, owned by the global entity. Money is made in each country by selling goods or services. How are t…

Apple is a particularly difficult case, because they control every link in the chain of supply from manufacturing to retail and pay less than 1% effective corporate tax from their profits. From every step of the supply chain. It is very difficult, if not impossible, to compete with Apple without having a similar end-to-end control of manufacturing to retail. If a company has to purchase their products from a manufact…

The corporate tax rate in the US is actually higher than in many EU countries. The reverse is actually true, US companies choosing to base their "head quarters" in Ireland and the Netherlands.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#137

Post by plouc »

tobltobs wrote: post #116
lsaferite wrote: post #106

Earlier quoted context omitted.

As much as the minuscule corp tax bills infuriate me, my logical half laughs and says income tax is silly, just use sales tax. I know we'll never pass something along the lines of FairTax, but I daydream about it all the time. And yes, I've heard all the arguments against it and I still think it's a much better solution than taxing income.

A sale tax only system would be a nice gift for the wealthy.

Could you develop? I am genuinely curious.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#138

Post by shrikant »

JupiterMoon wrote: post #109

The thing that large corporations should remember is the the UK is one of the few countries in the world that can pass retrospective legislation and then enforce it (this has happened on tax issues as recently as the 2000s). At some stage a UK government is going to claw back this money and I think it won't be pretty for anyone. (NB I fundamentally don't agree with the concept of retrospective legislation I'm merely…

I found this ex post facto-ing, so I dug up a relevant link: http://news.bbc.co.uk/2/hi/business/8496921.stm

The law in question is the Finance Act of 2008.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#139

Post by guard-of-terra »

adaml_623 wrote: post #133
guard-of-terra wrote: post #125

Earlier quoted context omitted.

Apple sells a huge number of physical devices - phones and tablets. They created a new market, and now governments are able to collect VAT and sometimes customs tariffs on all those smartphones. Why not let Apple have what's left?

Because we have quadriplegics who need 24 hour care so they don't die. Just to choose one random example of why we choose to have a government that levies taxes and provides services.

Why not finance helping quadriplegics from increased VAT?

If it comes to that, why not finance helping quadriplegics from charity?

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#140

Post by BenoitEssiambre »

stegosaurus wrote: post #68

Re-posting my comment from the Guardian thread that came up earlier ( https://news.ycombinator.com/item?id=10371728 ) Corporation tax in the UK is payable on 'profits subject to corporation tax'. In laymen's terms this is roughly equivalent to to accounting profit. Employee salaries, bonuses, etc are generally deductible; if you pay me 50K, that's 50K out of your bottom line. The employees in question likely pay a va…

Exactly, it makes little economic sense to tax corporations. It makes much more sense to tax the people who own corporations when they take the money out of them.

Though there might be some practical reasons to tax corporations a bit. It might be easier to prevent tax evasion when you take the money at the source and it might lessen the amount of personal purchases being passed as business expenses to avoid taxes.

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