[Sooty25]

Soon be time both the general public and the tax man woke up and realised how unhealthy for national economies the likes of Amazon and its kin really are.

True as it may be can you imagine the effect of them disappearing now? Rising prices may have such an impact on inflation that it could have wider economic implications.

But their tax avoidance counters that.

It's also worth noting much of what Amazon sells is from independent businesses.

Yes, but have you seen the charges involved?

For online sales, Google has become the dominant search engine, and Amazon and eBay have become the dominant search results. The only way for an independent business to succeed online is to pay a significant percentage of its profits to dominant companies, like the three mentioned, who then strip the profit out of the UK after paying minimal tax. Companies that are now too big for the taxman to take on.

[Flyin'Dutch']

IIRC Amazon and or Ebay are at the moment at the receiving end of some tax action by HMRC for not ensuring that their providers pay VAT.

[Miscellaneous]

Fair points, Sooty.

What I'm saying is that there would be significant consequences in the hypothetical world where we went back to buying on the high street. The Amazon's and ebay's of the world have driven prices down significantly and that includes the high street retailers prices. Even you benefit whether you like it or not. Take them away and the 'man on the street' (@Flyin'Dutch' @JoeC is to okay for me to use that word in this context? ) would be hit very hard in the pocket.

[JoeC]

(@Flyin'Dutch' @JoeC is to okay for me to use that word in this context? ).

As if you'd listen to me if I disagreed anyway!

Man in the street...a mere 24 hours after International Women's Day too. Shame on you

Say what you like. Just not " the average Joe..."

[Paul_Sengupta]

But their tax avoidance counters that.

How do we counter this though? As far as I'm aware, their only "tax avoidance" comes from paying their taxes in Luxemburg, where their EU operation is based. When we leave the EU this will change, unless we stay in the single market. This is one of the tenets of the EU, if you're based in one country, you can do business in any other EU/single market country without additional taxes or fees.

[Flyin'Dutch']

Too optimistic.

The US (which is outside of the EU) has lowered its corporate tax to lure Business back into the US Tax Fold

[Bill Haddow]

Employers' NIC is a tax on payroll, so in many cases effectively a tax on turnover, and could be tweaked for companies whose high gross profits are frittered away on things like management charges paid to foreign parent companies, imports of super expensive coffee from Switzerland, and similar contrivances.

Remember the Selective Employment Tax of the Wilson era?

Bill H

[Sooty25]

But their tax avoidance counters that.

How do we counter this though? As far as I'm aware, their only "tax avoidance" comes from paying their taxes in Luxemburg, where their EU operation is based. When we leave the EU this will change, unless we stay in the single market. This is one of the tenets of the EU, if you're based in one country, you can do business in any other EU/single market country without additional taxes or fees.

the problem is Paul, that when you place and order amazon.co.uk (note the UK domain name), the order then gets routed to the Luxembourg office and processed,

Luxembourg then place a fulfilment order with Amazon's warehouse in the UK, after stripping the profit off in Luxembourg as an IP/royalty income. Taxed in Luxembourg at 5.9%, rather than in the UK at 19%.

The fulfilment order is then picked, packed and dispatched in the UK at vertually zero profit. Which explains why Amazon UK paid £7M in corporation tax on £7.4Bn turnover. That equates to 0.0945% of turnover. Relatively speaking, nothing.

As none of the physical transaction is actually done outside of the UK, I think it is fundamentally wrong that this should be tolerated.

[Paul_Sengupta]

As none of the physical transaction is actually done outside of the UK, I think it is fundamentally wrong that this should be tolerated.

But that's how the EU works. I don't see how else it could be done and stay within EU rules.

[Flyin'Dutch']

Paul you keep banging on about this being an EU problem - businesses the world over do this by basing their HQs in tax friendly countries, this is not the preserve of the EU.

If you want to highlight the ills of the EU go ahead, there are plenty, but do stick to the facts.

[KingJames]

With the restaurants it's a combination of things, so the business chap in the Torygraph wrote on Saturday;

Business rates (too high)
Minimum wage (ditto)
Non-UK staff leaving due to Brexit uncertainty and immigration being down

plus a general feeling of the British population that things are a bit ropey money-wise right now, so staying in is the new going out.

From my generation, we know need a babysitter to go out and a taxi to make it there and back in time. That adds serious wedge onto the cost of the night so it doesn’t happen very often. We should have been replaced by the next generation, they barely have the means to buy drinks let alone pricey dinners out regularly. The pop up type places do well though, interesting food in the right price bracket.

[Paul_Sengupta]

Paul you keep banging on about this being an EU problem - businesses the world over do this by basing their HQs in tax friendly countries, this is not the preserve of the EU.

Yes, this is true, but for non-EU countries, it relies on the individual tax rules of the country in which they are trading.

I'm not sure this is a "problem" though obviously there are people who do. I personally am happy for there to be free trade between EU nations/states, I think it brings a lot of benefits. That companies take advantage of these rules to base themselves in the most tax efficient country is part of the system, and is perhaps akin to US companies being based in Delaware or such like.

The point is that I don't see how the UK, within the auspices of the EU or a free trade agreement, can unilaterally have it any other way.

[Flyin'Dutch']

The point is that I don't see how the UK, within the auspices of the EU or a free trade agreement, can unilaterally have it any other way.

Neither do I and from what is going on worldwide, I also don't see how being outside of the EU this would be any easier to tackle.

Again looking at the US it seems the only mechanism is to reduce corporate taxes, which is exactly what some EU countries do - Ireland, Luxembourg and the Netherlands.

[rikur_]

Paul you keep banging on about this being an EU problem - businesses the world over do this by basing their HQs in tax friendly countries, this is not the preserve of the EU.

If you want to highlight the ills of the EU go ahead, there are plenty, but do stick to the facts.

FD - I thought there was an EU angle to this one though?
As I understand several countries have tried to introduce punitive taxes on transfers of profits to tax havens, but within the EU it doesn't work because you can move your profit around the EU without restriction? I've probably got the details slightly wrong, but the way it was explained to me was that we couldn't close the loopholes on moving profits to tax-havens so long as we had to allow profits to be moved freely around the EU:
https://en.wikipedia.org/wiki/Dutch_Sandwich

[Flyin'Dutch']

It is correct that this cannot be closed within the EU, but countries outside the EU can also not close these as demonstrated by the US example and the use of tax havens (provided by 'friendly' regulators) by businesses and individuals the world over.

I wish this could be sorted as it is awful that large businesses get away with this.

I am appalled that the Netherlands is involved with this (as are Luxembourg, Ireland and the UK)