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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

#431

Post by tsotha »

caskance wrote: post #216
kmkemp wrote: post #202

Earlier quoted context omitted.

Except that the reason the loopholes exist is because of the lobbying of companies that take advantage of them.

The fact that companies are able to create loopholes via lobbying is the problem. When you accept corrupt government as an unchangeable fact of nature, you've already conceded defeat.

100% agree, and this has been very frustrating for me over the last decade or so. Elected reps (in the US, at least) are barely going through the motions of obscuring the quid pro quo any more, and it seems like nobody really cares.

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

#432

Post by tsotha »

forrestthewoods wrote: post #289
byroot wrote: post #228

Earlier quoted context omitted.

> 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% o…

The best possible tax scheme for poor people would be a simple flat tax that is impossible for rich people to avoid. I've always felt your definition of "most unfair" to be a great fallacy. Yes poor people pay a higher percentage of their income. They also receive more in benefits than they give and the flat tax ensures the rich pay their share. The more complicated you make the system the more it will benefit the ri…

>The best possible tax scheme for poor people would be a simple flat tax that is impossible for rich people to avoid.

You're looking at the wrong end of the telescope. It's really not that difficult to look at a tax table and cross-reference your income, so a flat tax is a very minor improvement.

Where every tax system gets tripped up is in determining what qualifies as income. People who manage to avoid taxes aren't somehow lowering their rates; they're getting inflows of money excluded from the "income" accounting box.

It's not an easy problem to deal with, either - states have been trying for centuries. Most of the write-offs individuals and corporations take are perfectly reasonable for some situations and very much abused in others. As you try to prevent abuse you end up with a tax code that's so complicated there are more ambiguous "gray areas" for people to take advantage.

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

#433

Post by bagacrap »

tomelders wrote: post #173
mrkmcknz wrote: post #18

The 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…

I utterly reject this argument > 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 is the average salary at Facebook UK, it's likely much higher. First of all, that's Facebook employees paying tax. Not Facebook. That's their money that they are taxed on and they pay it. Secondly, no one is asking for Facebook to p…

> That's their money that they are taxed on and they pay it.

The only reason Facebook doesn't have to pay taxes on that money is because they gave it to their employees (so it counts against profit). The money comes from FB profits, briefly goes to the employees, then to the government. Hence, the government is getting a cut of the money FB is making. What's the problem?

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

#434

Post by inthewoods »

ptaipale wrote: post #225
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.

Completely agree - but if you look at these global companies, many just locate their headquarters in tax-free zones while not having a substantial amount of employees, or engage in tax avoidance strategies like the Double Irish. But you're right - it's not typically only for tax reasons.

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

#435

Post by ptaipale »

inthewoods wrote: post #434
ptaipale wrote: post #225

Earlier quoted context omitted.

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.

Completely agree - but if you look at these global companies, many just locate their headquarters in tax-free zones while not having a substantial amount of employees, or engage in tax avoidance strategies like the Double Irish. But you're right - it's not typically only for tax reasons.

Another reason is that tax havens (such as Cayman Islands, or within EU also Luxembourg or London) often have substantial amounts of financial services - lawyers and other experts are available. So, for the logistics of running headquarter functions, it's not necessarily that taxes are low, it's also that there's available expertise for operation.

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

#436

Post by h909415 »

raverbashing wrote: post #129
tobltobs wrote: post #115

Earlier quoted context omitted.

First we were told to be nice to the rich and give them tax reduction, because we will be all happy for the trickling down pennies. And now we are supposed to give the cooperation tax relief because there is money trickling down from the employees?

Do you know what's even better? The rich taking their business somewhere else Then the unions can cry foul about how the big bad companies wouldn't put up with their crap anymore I'm sure in an ideal world everybody would be a public servant with no productivity goals but that has problems as well

>The rich taking their business somewhere else

They already did. That's the whole point of globalization.

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

#437

Post by sspiff »

jkahn wrote: post #53
sspiff wrote: post #46

Earlier quoted context omitted.

> Global companies offshoring profits and not paying enough tax (in the eyes of many countries) Also in the eyes of many citizens of those countries, not just the government trying to make the budget fit.

Yes, agreed, which makes it much more likely that laws will get passed to collect this tax as it will probably have strong political and voter base support.

The problem is that for many (smaller) countries, it's a race to the bottom. They want to attract companies that are huge compared to their "native" GDP or production capabilities, collect a little bit of tax from them, and maybe earn a whole lot more by creating (or maintaining) a financial services industry in their country.

It's hard to stop those countries from doing so, in the current framework of international trade and business. I don't know if a treaty limiting this kind of stuff is in the cards for the near future. And if it is, I'm not sure it would be signed or ratified by financial safe haven countries like Luxemburg, the Seychelles, Monaco or Belize.

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

#438

Post by kevindeasis »

Not from me: As an accountant, most people are not going to be happy with my comment, as it goes against the Group Think here, but this number likely makes sense for the following reasons: 1) Facebook is an American company so discussing up its U.K. Income tax is click bate, pure and simple. American companies pay the majority of income taxes to the US, of which Facebook had at $1.9B tax bill in 2014. 2) there are very complex cross-border income tax rules, where at a high level, other countries will make a corporation pay income tax on business income earned in its country. However, it says right in the article, Facebook UK had a taxable loss last year, and in most jurisdictions you can use prior year losses to reduce current year taxes payable, which is likely what is happening here. 3) they would be paying a lot of other taxes to the UK government. The article mentions employees meaning there will be a host of payroll taxes. There would also be sale tax. The article implies shirking the system, but believe me, governments want and get their money. In summary, this article is click bait trying to get people angry at things they do not understand unless you work as an accountant or tax lawyer..

Source: https://www.reddit.com/r/worldnews/comments/3ofo13/facebook_...

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

#439

Post by spacecowboy_lon »

drited wrote: post #276
spacecowboy_lon wrote: post #200

Earlier quoted context omitted.

Sorry what is this RSU you speak of? tax on employee share options is quite different in the UK to the USA. With a HMRC approved scheme CGT effectively goes away and you only pay CGT after your yearly allowance and only on a real gain - no massive tax bill on underwater share options.

RSU = restricted stock unit whether you're in the UK or the USA.

Never heard of RSU's in the UK context - UK taxation depends on if its an approved scheme or not.

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

#440

Post by fredoliveira »

Frondo wrote: post #328
fredoliveira wrote: post #240

Earlier quoted context omitted.

See but they do pay their taxes. They just use loopholes to pay less taxes.

Let me ask you then, do you think it's right that the tax burden is on those locally-run frozen yogurt places, over the extremely well-off multinationals like Apple? Is that the way you want to see the world run?

Of course I don't think it's right. I was only making the point of what they do is not skip paying taxes, but effectively trick the financial system into paying as little as they can.
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