Facebook paid £4,327 corporation tax in the UK in 2014 • Hacker News Board

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

#191

Post by ahallock » Mon, Oct 12, 2015, 1:09 PM UTC

rmc wrote: post #87

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…

> What would happen if you replace all (most) tax with VAT? The poor would pay considerably more of their income as tax than the rich. And yes, there are ways to do tax evasion with VAT. There was a court case in the UK about whether Jaffa Cakes were a cake or a biscuit (because there are different VAT categories)

Then don't charge the poor for VAT.

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

#192

Post by fooster » Mon, Oct 12, 2015, 1:10 PM UTC

Marazan wrote: post #29

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 made a "loss" whilst paying out millions of bounds of stock bonuses. Either Facebook UK is the most incompetently manged company in the world orrrrrrr...

The bonuses were taxed at personal tax rates, rather than coroporate. Furthermore, the personal tax rate is higher than the corporate, so why is this a bad thing again?

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

#193

Post by marrs » Mon, Oct 12, 2015, 1:10 PM UTC

coldtea wrote: post #130

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?

> Why not let Apple have what's left? Because other businesses also create products that collect VAT and still pay their taxes. Why should Apple be any different? To promote those that are big enough to avoid taxation to make them even bigger?

But Apple are paying their taxes.

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

#194

Post by afsina » Mon, Oct 12, 2015, 1:11 PM UTC

pjc50 wrote: post #165

krotton wrote: post #70

Earlier quoted context omitted.

Well, in hypothetical laissez-faire capitalism taxes would not be needed to provide infrastructure - Uber would just have to pay its fees for driving on private roads (etc.). This would drive prices up, but fairly divide the costs between the roads' users. Although I must admit I have no idea how things could look with purely digital companies like Facebook. I can think of local ISP-s charging the company for allowin…

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?

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

#195

Post by JupiterMoon » Mon, Oct 12, 2015, 1:11 PM UTC

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 charity? Because then the people donating to charity will (at least try to) impose conditions. So only quadriplegics or a certain faith or with a certain set of circumstances with receive help. (See e.g. the concepts of the deserving/undeserving poor and moral judgements with charities helping the poor in the UK pre-1945.)

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

#196

Post by fooster » Mon, Oct 12, 2015, 1:13 PM UTC

nr152522 wrote: post #91

"It means Facebook's UK corporation tax bill was less than the tax the average UK employee paid on their salary." "The average UK salary is £26,500 on which employees pay a total of £5,392.80 in income tax and national insurance contributions." Corporation tax and personal tax are not the same thing so I don't see how they can be compared. In fact, in terms of taxes paid to HMRC, they would have been paid more tax ov…

If they reduce their profit to zero by paying out to the employees this means they don't have to pay any corporate tax, and the employee has to pay income tax. The personal income tax rate is generally higher than corporate, so why is this a bad thing?

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

#197

Post by tonyedgecombe » Mon, Oct 12, 2015, 1:13 PM UTC

petercooper wrote: post #160

tonyedgecombe wrote: post #141

Earlier quoted context omitted.

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.

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).

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

#198

Post by radu_floricica » Mon, Oct 12, 2015, 1:15 PM UTC

DanBC wrote: post #11

radu_floricica wrote: post #5

Tech companies don't show profits as long as there's place for development. They're still paying tax on everything else, including renting offices, paying salaries and bonuses etc.

> paying salaries Isn't that a tax paid by the employee, not employer? Starbucks tried to say that they paid a lot in VAT, but that's a tax paid by the customer not the business.

> Isn't that a tax paid by the employee, not employer

I don't know why people still fall for this. The government may say whatever it wants, but the value of the paycheck is market determined which means taxes are taken from both sides. Unequally, of course, depending on how (in)elastic work supply and demand are.

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

#199

Post by radu_floricica » Mon, Oct 12, 2015, 1:17 PM UTC

exDM69 wrote: post #64

radu_floricica wrote: post #5

Tech companies don't show profits as long as there's place for development. They're still paying tax on everything else, including renting offices, paying salaries and bonuses etc.

> They're still paying tax on everything else, including renting offices, paying salaries So is every other company operating in Europe, and they have to pay their corporate taxes. But the multinational corporations evade their corporate taxes and get an unfair competitive advantage. A practical example: a hamburger and fries from a local franchise costs 2 eur (about 20%) more than one from McDonalds, because the lat…

That's a different case. I was simply saying _tech_ corporations often operate at a loss for a very long time. I'm reasonably sure Amazon didn't make a profit for decades, assuming it does now. This is not paperwork hand-waving, they're actually reinvesting all income, plus as much extra they can raise.

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

#200

Post by spacecowboy_lon » Mon, Oct 12, 2015, 1:20 PM UTC

ropiku wrote: post #102

Marazan wrote: post #26

Earlier quoted context omitted.

If they hold them for 5 years there is no Cap Gains tax to be paid on the shares. Arguing that the tax employees pay should be taken into account when calculating a companies tax provision lacks merit. That's employees tax not the companies - this is especially true for companies such as Starbucks where if they were not monopolising high street space by abusing the tax system and small local coffee shop would happily…

The cap gain is only paid on the profit made when selling. RSUs are taxed as regular income when they are awarded. Most likely the employees are high rate tax payers so it comes out at 40-45% tax + National Insurance.

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.