[Sooty25]

@eltonioni which country are we going to collect the Domestic Sales Tax in? Luxembourg or UK?

[johnm]

There is a great deal of work going on around the OECD and other international organisations to try and find ways to better manage the way global multinationals, especially those trading on line, arrange their tax affairs.

The underlying principle is about where profits are generated and that is not necessarily a trivial conversation.

It doesn't follow, for example, that profits are necessarily generated where the buyer of goods or services is located.

Large corporates will always try to structure their businesses to minimise tax liability and they always have, the advent of on-line retailing has just added a layer of complexity.

Edited to add: Some trading nations or blocs are now looking at whether they can tax revenue rather than profits, because that's harder to relocate.

[PeteSpencer]

Pretty unbeatable I’d say .

Are we becoming conditioned to thinking it is?

Many could have nipped to a superstore and got it at 9pm on the Saturday?

Did you need it that quickly?

I only get my electrical stuff from John Lewis:

So choice between 50 mile round trip to Cambridge, traffic chaos and exhorbitant Parking versus 1/2 mile round trip to Waitrose and free parking:
No brainer.

I fell out with PC world/Currys several years ago when they sold me a laptop whose 'free' 90 day virus protection had run out on the shelf unknown to me.

Peter

[Flyingfemme]

VAT is a sales tax. It has nothing to do with profit. And UK VAT should be paid on sales to UK consumers, wherever the items come from. The problem is that the policing of this is soft and HMRC comes down heavy on the little guy, while letting off the Amazons because they are tougher to nail. If you sell to the U K from somewhere else, you are making profits somewhere else and pay CT there. Fulfillment centres should be looked at more closely BUT they do pay business rates, NI and fund income taxes from employees - so they do contribute.
I still say, do away with CT and taxconsumption as it is far easier to police.

[JoeC]

Consumption taxes have the biggest effect on the poorest in society as the majority of their income goes on consuming the necessities they need to live.

Whereas the wealthy spend a much smaller proportion of their income on essential consumption.

[Miscellaneous]

Whereas the wealthy spend a much smaller proportion of their income on essential consumption.

Go on then, Joe, what non essentials do you spend the much larger proportion on?

[eltonioni]

@eltonioni which country are we going to collect the Domestic Sales Tax in? Luxembourg or UK?

UK.
Luxembourg can do whatever they like / can domestically.

It's just a suggestion. New houses and Jaffa Cakes are zero rated at the moment unlike tampons and chocolate digestives (thanks EU). Maybe someone could compare the difference with a (say) 5% flat rate sales tax on everything.

[johnm]

as @Flyingfemme points out we already have a domestic sales tax, it's called VAT and Amazon pays it on all its UK sales. It also pays PAYE and NI for all its employees and business rates on its premises etc. The issue is about corporation tax, which is a relatively small part of the overall business related tax take and they have made arrangements to pay as much of that as possible in a favourable country, as did Apple and others in Ireland.

[Sooty25]

Retailer claims back the VAT on goods it purchases, then charges VAT when it sells it. The only VAT that gets handed to HMRC is effectively the bit on the profit margin.

When you buy from Amazon the profit stays in Luxembourg, so therefore, so does the VAT on the profit margin.

Maybe all retail business rates should be standardised, with High street shops being reduced to warehouse rates? Maybe fulfilment centres should pay a higher rate due to their higher stock holding density? If we are actually try to save the high street that is..

[Jim Jones]

Whereas the wealthy spend a much smaller proportion of their income on essential consumption.

Go on then, Joe, what non essentials do you spend the much larger proportion on?

He puts his surplus income into his overseas investments.

[PaulB]

I’m not sure that VAT is the cause of the demise of the High Street.

However, VAT is a sales tax paid by consumers and although it works in a way similar to that described by Sooty above, it is not a tax on profits paid by companies.

Logic would say that a person buying something in the UK should pay VAT in the U.K. but it seems to be more complex than that. It does beg a question that we’re not allowed to ask here.

[Flyingfemme]

No, Sooty, you misunderstand how VAT works. ALL the VAT on the sale is handed over to HMRC. The retailer effectively pays no VAT by reclaiming any paid on purchases from the country they are resident in, or they get it VAT free via import or reverse charge. Otherwise VAT would be paid multiple times on every item and nobody could afford to buy anything.

[eltonioni]

The High St as we understand it is beyond saving @Sooty25 . It's over, finished, deceased, it's a Norwegian Blue.

@johnm I've heard of VAT funnily enough. My suggestion was for simplification with" a (say) 5% flat rate sales tax on everything" to eliminate VAT and the more pernicious effects profit offshoring to a more or less degree.

The complexity and uncertainty of the current system often leads to offshoring as well as mitigation, and quite rightly too if it is legal. Even simple mitigation requires very expensive professional advice, which of is course the reason that it won't be changed to something simpler that doesn't need very expensive professional advice. UK PLC has a very nice protection racket going for financial services firms right the way across the world.

[Miscellaneous]

Come on Sooty, this is not about tax paid, you're just gunning for Amazon for some underlying reason. Be honest with yourself.

What business are you in, what do you sell?

People like Bezos wouldn't be in the position they are in if they were wired not to run their businesses as efficiently as legally possible.

It's up to govts to set legislation. I agree they're failing, direct your anger at them.

[PeteSpencer]

I've heard of VAT funnily enough. My suggestion was for simplification with" a (say) 5% flat rate sales tax on everything" to eliminate VAT and the more pernicious effects profit offshoring to a more or less degree.
.

You mean back to 'Purchase Tax' which preceded VAT in the 50s.

Peter