[deleted]
Facebook paid £4,327 corporation tax in the UK in 2014
151–160 of 449 posts
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#152Earlier quoted context omitted.
> 362 Facebook staff on an average salary of say £65,000 will contribute at least £7,230,696.60 in taxes and NI to HMRC Let's not pretend all 362 Facebook staff are paying tax via PAYE.
maybe stupid question: do you expect a lot of fake contractors or there is another way? Because if they are contractors they wouldn't be part of those 362 in staff right?
I think the parent is referring to contractors, who avoid PAYE but still have to pay dividend and corporation tax. The dividend tax rate is about to go up so the PAYE issue is about to become void.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#153Global 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…
Great summary, I'd like to add
> while not dis-incentivising multi-nationals from doing business in each country
I'd argue that the incentive to do business in several countries is the profit they're making in those countries. No company is going to walk away from a company because they're being charge x% of tax on the money they earn. They might say they will, but they may as well be saying this...
"Because I don't want to pay you $1, I will reject the $5 this other person is going to give me."
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#154"It's about the spirit of the law versus the letter of the law. At the end of the day tax evasion is illegal, when you're deliberately setting out to not pay your tax by hiding your money,"
This is so wrong. Close these loopholes so a million dollar accountant and a regular accountant play by the same rules.
It's as if a soccer didn't have an offsides rule and then some complained about teams taking advantage of offsides. Change the law and move on. Don't complain about companies exploiting a huge hole you created.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#155The political point here is that big corps are unfairly draining a lot of money out of the local systems they operate in. This leads to reducing services locally, starving the unemployed and the poor and straining middle classes big time. Exhilarating amounts of money are funnelled and stockpiled under the name of unaccountable entities named Apples, Googles etc. against many millions poor that wil need basic income to survive sooner than later. Is this the world we need, really? The principle is simple: local branch entities pay taxes locally just as any local small business.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#156Earlier quoted context omitted.
A sale tax only system would be a nice gift for the wealthy.
Could you develop? I am genuinely curious.
If you have a low income and need all the money to buy food you get taxed on 100% of your income. If you have a lot of income and can save or invest 90% you only get taxed on 10% of your income.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#157Earlier 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.
Freeagent also deals quite nicely with VAT, and you can set up for automatic direct debit... In fact I sometimes wonder what I'm paying my accountant > £100/month for :-)
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#158Earlier 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…
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.
It's worse than that. The "HQ" is in Ireland, but pays "royalties" to an IP holding company in the Cayman Islands, which is where all the profits go, on which no tax is paid. This is the "double Irish" referred to in other comments.
Edit: note that you can just go and read the accounts for Facebook UK here: https://beta.companieshouse.gov.uk/company/06331310/filing-h...
A very important piece of information is left out of the article: what Facebook UK is paying in "license fees" to other parts of Facebook.
The accounts show £131m in "administrative expenses", of which I can account for £86m in staff costs from the same document. £35m of that is a "share based payments charge", which represents the accounting treatment of share options. Of course, the shares handed out are shares of the US parent and not the UK subsidiary.
131-86=£46m which isn't broken down further.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#159The UK press seems to have a field day when it comes to multi-national corporations not paying corporation tax. We will no doubt shortly have a number of MPs telling us how unacceptable this is and that Facebook need to start paying up. This all irks me a little. 362 Facebook staff on an average salary of say £65,000 will contribute at least £7,230,696.60 in taxes and NI to HMRC. Let's also not pretend that £65,000 i…
Do you think they'd pay more or less tax in Dublin compared to £5k? Irelands 12.5% seems very reasonable considering its so close to its effective rate. France, Britain and Germany all allow massive write offs and loop holes that mean their effective rate is multiples lower than their stated corporate tax rate and this story will be forgotten by the Brits, Germans and French who'll turn around and repeat their condem…
> Irelands 12.5% seems very reasonable considering its so close to its effective rate.
Very little of the actual profits of Facebook are actually subject to the 12.5% corporate tax of Ireland.
In a European corporate tax evasion scheme such as Facebook's, there's typically four to five legal entities in two or three countries. The branch making the actual profits (e.g. Facebook UK) pays their profits as "license fees" to an entity Netherlands or Luxembourg that has a flat-rate tax deal. This money is then transferred to the Irelands, where it stays for a few milliseconds before it is wired over to another corporate entity in NL/LUX ("license fees" again), subject to a flat rate fee, and then through ownership deals gets transferred back to Ireland. This trick is called the "double Irish with a Dutch sandwich", and there are dozens of similar, widely-employed schemes.
If this money is actually needed in the US, it gets funneled through one or two hops in Bahamas, Bermuda or Cayman Islands or so.
The net result is not 12.5%, more like (12.5%)^2 - (flat rates paid in NL/LUX). Effectively down to a few percent.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#160Earlier quoted context omitted.
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.
Or just tax dividends as normal income.
We are not far away from that with the new regime, but ultimately that's mostly disproportionately onerous on small, risk taking entrepreneurs and small businesses.