This just in from Eoin

Clearly the state needs to withdraw tax relief from the banking sector. Allowing them to offset the previous years losses, or allowing them to offset income tax payments against corporation tax liabilities means that they already receive relief.

You get to offset income tax payments against corporation tax liabilities?

You do?

Wowee. That\’s a gap to drive a coach and horses through, isn\’t it?

What I think he means is that incomes paid to workers are treated as expenses of the company before the calculation of what profit has been made. Which, since incomes paid to the workers are an expense to be taken into account before calculating profits seems sensible enough. Difficult to think of any other way of calculating profits really……

But while that\’s what I think he means it\’s always difficult to tell with Eoin isn\’t it?

10 comments on “This just in from Eoin

  1. he’s not exactly a technical expert on the mechanics of taxation is he! Why anyone would even consider his dribblings worth publishing is a mystery to me. Is it perhaps some weird, post-structuralist comedy act?

  2. he may be referring to one of Richie’s ideas (not original) where salaries above, say, £250k, are not counted as costs, so are in effect taxed twice (once as income tax, once because they are counted in profit, roughly speaking). I actually like this idea, but I think it was you that informed me they already do it in the USA, above $1m?

  3. Umm no he is correct. I don’t think he means employees’ income tax liabilities, but the foreign income tax liabilities of branches imposed on their foreign subsidiaries, which are allowed as a credit against their UK corporation tax liabilities [or as a deduction in the computation of against the UK corporation tax profits where a credit is not allowed]. But I may be being charitable.

  4. Alex,

    Surely you meant “foreign corporation tax liabilities”. That would then make sense but make Eoin’s article a call for simple double taxation.

  5. Is he perhaps talking about income tax withheld on interest payments?

    So X owes 100 interest to Y, but actually X pays 80 to Y plus 20 withholding tax to the Revenue. Y is therefore treated as having paid 20 tax, because he has (although X did the paying, out of money owed to Y). The 20 can therefore be deducted from Y’s tax liability, because it’s tax he’s already paid.

    That could be UK tax, not just withholding tax, although bank tax is a bit of a specialist area so I’m not sure how often it would affect them.

    But I can see no logical reason to object to this – it’s simply a pre-payment of tax.

  6. There is a lot of effort from the left on how to raise ever more revenue from taxes.

    If they put as much effort in to wealth creation we might grow the economy enough to reduce the deficit to zero and allow them to spend more on their pet projects.

  7. Luis…do you know the number of pages of tax legislation there are in the UK? Is your response….let’s get more pages in there? And then the infantile Left says…let’s get more pages of tax legislation in there. Just go to a specialist book shop and ask for the English tax code (sic) and see if you can carry it home.

  8. Um, yeah, Luis Enrique, are you arguing for a UK version of the Alternative Minimum Tax, widely held to be a disastrous piece of law and held in place only by a combination of spite and legislative inertia?

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