Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bbc.co.uk

Post reply on HN
Print view View original

221–230 of 449 posts

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

#221

Post by petercooper »

tonyedgecombe wrote: post #197
petercooper wrote: post #160

Earlier quoted context omitted.

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.

For those people they would clearly stop drawing dividends as there would be no tax advantage to doing so. I'm not sure how you could say it is onerous (other than the fact they may have to pay more tax than they would have).

For right or wrong, the British tax code has long recognized that those putting their own capital at risk do not necessarily have the same safety nets of typical employees and taxes their rewards at a lower rate. This is why both dividend taxes and capital gains taxes are lower than income taxes, and also why Entrepreneur Relief exists.

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

#222

Post by im3w1l »

refurb wrote: post #166
tomelders wrote: post #153

Earlier quoted context omitted.

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…

Return on investment weighs heavily on most business decisions. If I invest $X, by the end of the year I'll get $X*(1+return%). Since companies can't invest everywhere at the same time, they prioritize investments. A higher tax rate might mean investing in that country later, as there are other investments than have a higher immediate return. I could see a situation where an investment was profitable, but so marginal…

But interest rates are low so if you see an opportunity to earn money, you can borrow to seize that opportunity.

This assumes that when you scale up your organization, your costs scale up linearly. If it caused marginal wage to shoot through the roof, that could be a reason not to do it I guess.

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

#223

Post by pjc50 »

kuyfiuyg wrote: post #19

I'm asking someone who is more knowledgeable than me on this topic. What would happen if you replace all (most) tax with VAT? That would mean everywhere there is a real transaction, that generates greater value, that is where the tax is. It would also make it impossible for big companies to do tax evasion - since you limit the effects to the 'leaves' of the tree that is the economic system, you can catch the money be…

I'd prefer taxation on land value, property, and especially a property tax on valuable IP.

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

#224

Post by caskance »

exDM69 wrote: post #159
s_dev wrote: post #43

Earlier quoted context omitted.

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…

Tax evasion is a crime. You're describing tax optimization.

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

#225

Post by ptaipale »

inthewoods wrote: post #145

FB is playing the game that corporations play all over the world - global tax arbitrage. They shift operations, losses and profits to different countries based on tax policy. The similar thing happens here in the US at the State level. It isn't uncommon for large companies to pack up and move their operations to lower tax States, or to actually bargain with individual States over who will give them the best deal. Her…

Tax policy, but not just tax policy. Companies also place their operations based on cost (total operating cost, including logistics costs and whatever). For instance, it is not a surprise that so many computers and smartphones are made in China.

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

#226

Post by RealGeek »

arethuza wrote: post #99
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…

Shareholders are generally pretty keen on the "existence" of a corporation when it comes to limited liability.

and when it comes to lobbying, politics and religious rights... Corporations suddenly become people.

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

#227

Post by pjc50 »

afsina wrote: post #194
pjc50 wrote: post #165

Earlier quoted context omitted.

This arrangement collapses into monopoly very quickly. Facebook would bypass or buyout the local ISPs. (A world of purely voluntary contracts and no compulsory purchase would never have got past the development of the railway or telegraph, so the whole prospect is ludicrous)

Not really. Monopolies are mostly created by the state. Either with crony capitalism, intellectual property laws or directly state controlled production. Besides, Laissez-faire capitalism can create large scale infrastructure, why do you claim otherwise?

Standard Oil? If you're going to call that "crony capitalism", we're well into the same delusional territory as "true communism has never been tried".

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

#228

Post by byroot »

guard-of-terra wrote: post #139
adaml_623 wrote: post #133

Earlier quoted context omitted.

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?

> Why not finance helping quadriplegics from increased VAT?

Because VAT, beside being a very effective tax (it's the biggest source of income of most countries), is the most unfair one.

Say a country have a 20% VAT

Low income household need to use the entirety of their income to survive (food, housing, etc). So effectively 20% of their income is collected as VAT.

Now a upper class household, let's say they save 25% of their income each month as retirement plans etc, and spend the rest.

They've been effectively taxed at 20% of 75% of they income, so their effective VAT rate was 15%.

While you often see very high income people advocate for flat rate tax instead of progressive tax, none of them have the nerve to propose a reversed progressive tax like VAT is, where poor people pay proportionally more than rich people.

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

#229

Post by scanr »

bnastic wrote: post #59

My one-man-show consultancy pays far more than that in UK corporation tax. Of course that pisses me off, regardless of how you paint this whole tax avoidance scheme. Someone said that "paying tax is for poor", and this goes a long way to support it.

An alternative point of view: if your one-man-show consultancy was not IR35 compliant, paying corporation tax instead of NI and PAYE (i.e. salary) would be a sign that you're avoiding tax.

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

#230

Post by ptaipale »

devit wrote: post #16
3dfan wrote: post #9

What is the news here? FB was making a loss last year, so why should they pay corporation tax?

The UK subsidiary was apparently making a loss, but the company as a whole wasn't. This might mean they shuffled money around to avoid paying UK taxes, i.e. they engaged in https://en.wikipedia.org/wiki/Transfer_mispricing potentially breaking the law.

Then the taxman can get them. They just need proof. If the case is clear, why don't they go and get Facebook for breaking the law?

Most likely because the case is not so clear: it is far from clear that they engaged in any transfer mispricing.

Post reply on HN