Well, he would, wouldn’t he?

One of Britain’s most high-profile retail landlords has backed calls for higher taxes on online retailers to relieve the pressures of the “out of date” business rates regime on the country’s struggling high streets.

Brian Bickell, chief executive of Carnaby Street owner Shaftesbury, called for a “level playing field” between shops and online shopping websites such as Amazon, which typically occupy much cheaper property and pay much less in rates as a result.

That we currently have a level playing field – those who use property pay tax based on the value of the property they use – doesn’t fit the narrative of someone on the losing end of that level competition, does it?

How does this work then?

Mondelez UK accounts reveal that its turnover rose from £1.64billion to £1.66billion and its profits increased to £185million from £22million. The rise was mainly due to £146million of dividends from two subsidiaries – its Terry’s chocolate business and a coffee business in the Netherlands. This cash offset its profits and helped cut the corporation tax – which is payable on profits – to zero.

Mail butchery there, obviously. But what actually is the allegation? That they received tax paid dividends and then didn’t pay tax on them again?

‘Uman rights, Pah! What matters is Moar Tax!

A group of contractors who used tax avoidance schemes have branded looming fines “grossly unfair” and a breach of human rights in an official legal challenge.

The tax office has targeted around 50,000 self-employed people with a “loan charge”, set to hit in April, which those liable claim will see them forced into bankruptcy.

The dispute arises from the contractors’ use of complex arrangements, popular and widely accepted to be legal in the early 2000s, in which much of their salary was paid in the form of supposedly tax-free loans.

Well, they were actually legal. What is not illegal is legal, recall? Then the rules were changed. Retrospectively.

Following the successful case against Scottish football club Rangers last year, the Government introduced a new law and HM Revenue & Customs has deemed any outstanding loans liable for tax.

The contractors will also be hit by the loan charge, which rolls all the loans received into a single tax year meaning the bill could be more than the actual tax liability. It also does not clear the original unpaid tax bill.

But Moar Tax is to be collected so that’s fine, isn’t it.

Interesting question for Robert Reich

Hard to believe, but the Trump administration is proposing yet another massive tax windfall for the rich.
It would be to reduce their capital gains taxes. Those are taxes on the increased value of their stocks and bonds, businesses, and other valuables, when they sell them. Trump would do this by eliminating whatever portion of that increased value was due to inflation.

How about a logical defence of why inflation gains themselves should be taxed? Something from perhaps theory or even morality?

Well, no, not quite

Contractors suspected of being “false employees” win the vast majority of tax tribunal cases brought against them – raising further questions over the taxman’s ability to enforce the rules accurately.

The successful finding against BBC television presenter Christa Ackroyd, who was ordered to pay £419,000 by a tribunal, has been hailed as a huge win for the taxman.

But analysis of other cases relating to “off-payroll” working by advice service Contractor Calculator found that this was an exception. HMRC has won just one of the 10 cases it has brought to tribunal against the self-employed in the past decade. Another of the 10 was a split decision.

Looks more like a failure to understand the rules than enforce them on HMRC’s part.

Yes, Prem Sikka is an idiot

Prem Sikka, professor of accounting at Sheffield University, said: “This shows just how far removed the senior leadership of HMRC are from public opinion. This policy provides absolutely no deterrent to tax cheats.”

Hmm, what?

Richard Las, the deputy director of HMRC in charge of organised crime, said that “very wealthy and prominent members of the community” were afraid of the “reputational damage” that a criminal trial for fraud, money-laundering or tax evasion would bring.

He admitted that “criminal justice” was never a “default option” for HMRC. “We use it where it is necessary and it will have the greatest effect,” Las said.

“When deciding whether to deploy our resources, we try to understand what motivates different types of offenders. For example, some tax offenders are very wealthy, prominent members of the community. We know that these types of people do not want the reputational damage of custodial sentences, and we can use that to our advantage.”

The news raises fresh questions about the approach of HMRC, which has been criticised for failing to prosecute high-profile people with financial interests in offshore tax havens.

What HMRC has actually said is that we’ll use whatever we can to make the bastards cough up. And if it’s the threat of public shame which will then we use that. If that won’t work then sure, we go to the expense of prosecution and the courts.

What the hell else do you want us to do?

What’s the net effect here?

They point to Diageo, which agreed in July to pay an extra £190 million in conventional corporation tax in order for HM Revenue & Customs to return £107 million it had paid previously in diverted profits tax.

Other as yet unidentified multinationals are also agreeing larger corporation tax payments to avoid the embarrassment and reputational damage of being seen as paying DPT, a tax introduced in 2015 to crack down on the most egregious forms of tax avoidance.

Last year Diageo, which operates in 180 countries and makes Guinness and Gordon’s Gin, was one of the first companies to admit that it was being asked to pay diverted profits tax, revealing that it had paid up despite challenging the demand.

The sum will now be paid back by the taxman, but in exchange Diageo has agreed to pay an extra £143 million of corporation tax in respect of the three years to June 2017 and, using the same approach, has earmarked an extra £47 million that it will pay for this year.

DPT paid over how many years? Corporation tax paid over how many years?

Is this a net gain to the Treasury or not?

Jeebus

The diverted profits tax – set at 25%, which is 6% higher than corporation tax – was brought in to prevent international firms from using transfer pricing, where they divert goods and services via a lower tax jurisdiction to avoid paying in the UK.

That’s not the definition of transfer pricing. And transfer pricing is a system of rules companies must follow, not one they mustn’t.

Sheesh

Hmm

To be clear: There is simply no empirical evidence or plausible economic mechanism to support the claim that cutting top tax rates spurs economic growth.

But then Nick Hanauer always has been an idiot, no?

Really quite stunning

…and the top 20% of the country earn 15 times more than the bottom 20%, before tax and benefits, and about four times after that readjustment.

The complaint being that that’s not enough tax and redistribution.

And ain’t this great?

There were also critics – dismissed by Wilkinson and Pickett as “ideological” – who questioned either the validity of their statistics or the conclusions they drew from them. What struck me, reading the book, was that if the homicide rate was a major sign of inequality then it was noticeable that since 1980, the year that inequality really started to grow in the US after 50 years of flatlining, murders also began to fall. There is now a lower murder rate in America than there was in 1950. What accounted for that apparent anomaly?

“It means there must be other things involved,” says Wilkinson confidently. “But we can say that if those same changes, whatever they are, had happened without the increase in inequality, homicides would have fallen even more.”

That’s religion. We didn’t sacrifice the virgin, the Moon was still disgorged by the Eclipse Dragon, but God decided to do it that way to test your faith.

In any case, he maintains that it’s the general consistency of the data showing the relationship between inequality and mental health, rather than the anomalies, that is most notable.

Snigger. Facts that disprove my theory are just anomalies of no import. That’s not science, is it?

Yet leaving aside whether it’s desirable, there is no such thing as complete equality, and attempts to bring it about have inevitably led to the worst kinds of repression. Still, that’s not an argument for unconstrained inequality. Where, though, to start on narrowing the distance between rich and poor? If they could impose one piece of legislation tomorrow what would it be?

“I would want companies to have to put some of their profits each year into an employee-controlled trust which would then have voting rights on the board,” says Wilkinson.

“I’d go for a Finland-style educational system, completely comprehensive,” says Pickett.

Sigh. Before tax and benefits inequality is higher in Finland than it is in the UK. Comprehensive schooling doesn’t do it therefore.

This just in from Anne Pettifor

The NHS pays for itself, because all the people who work in it pay tax.

Great, that’s easy then. We don’t tax anyone else to pay for the NHS. We only tax those who work in it because, as we’re told, that tax pays for it anyway.

Note what the real error in her argument is. Student loans don’t cost government anything because all the lecturers employed pay tax.

Isn’t this just appalling about the tax law?

Owners are liable for UK tax on the rents they collect from students, but can receive the money before tax and reduce the amount they have to pay by offsetting expenses and debt repayments.

And isn’t this an indictment of the higher education system?

The National Union of Students vice-president for welfare, Izzy Lenga, said UK students were seen as a cash cow by overseas investors, and often had no choice but to take rooms in “overpriced glass towers”.

Lenga said: “Overseas investors make billions of pounds building luxury apartments and charging sky-high rents for students. There is a cost of living crisis and finding good-quality affordable accommodation is a huge barrier for low- and middle-income students attending our world-leading institutions.”

Building more student housing does rather reduce the cost of all student housing, doesn’t it?

Pretty much solved really

HMRC’s figures from 2015-16 showed that 6% of tax due in Britain went uncollected – a whopping £34bn. About £1.7bn of this came from avoiding tax by taking legal steps to minimise one’s liability and an estimated £5.2bn came from evading tax illegally. With our public finances strained, it is an insult to diligent taxpayers that multinational firms and high-net-worth individuals can use a complex myriad of loopholes and accounting gymnastics to minimise their tax bill.

By the time we’re down to a couple of percent we’re pretty much done with government work aren’t we?

More Unherd

A one percentage point increase in wealth taxes – a very large increase indeed – reduces growth by just 0.02 to 0.04 percentage points. Not insignificant, but certainly not the picture of economic doom painted by critics.

Our star editor at the new Unherd appears confused here.

A 1% of GDP increase in wealth taxes would indeed be large. But that’s not what this paper, which she refers to, says. Rather, a 1% increase in the revenue from a wealth tax reduces GDP growth by 0.02 to 0.04%.

The countries studied have wealth tax revenues as % ge of GDP of 0.1% to 1%. Call it, say. 0.3% as an average. We increase the revenue from that by 1%, to 0.31% of GDP. Future GDP is lower by 0.03% of GDP. Marginal tax take is higher than average, of course. So a reasonable guess is that tax revenue would have been 50% of that marginal 0.03% of growth we’re not having. Which is higher than the 0.01% of extra tax we did get.

We’re over the peak of the Laffer Curve already…..

There could be a reason for this

A crackdown on offshore tax cheats has only recovered about a third of the £1bn that the government had predicted, according to estimates.

Possibly, the government has swallowed the campaigners’ insistences about how much dodging there is going on.

And those insistences prove to be wrong?

Daily Mail and union tax avoidance

Unite’s accounts for the year ending December 2016 showed that despite having a share portfolio of more than £50million, which regularly reports a healthy profit, it paid no corporation tax.

For years, Unite has used a loophole that allows it to offset large sums against costs — such as sick pay, accident compensation and employment tribunal costs.

McDonnell told his embarrassingly small audience in Davos that major auditing companies should have the equivalent of a doctor’s Hippocratic oath so they don’t encourage firms to avoid tax.

A dose of such medicine might prove handy for Len McCluskey and his fellow brothers and sisters in Unite.

Offsetting costs against revenues is a loophole these days, is it?

Jeebus.

Although I’ve little doubt that one or more among the Ritchie, Prem Sikka etc set have made exactly the same claim at some point.

Trump’s tax reform and the EU’s tax demand on Apple

A little comment by Ben S has triggered a thought.

The EU’s tax demand on Apple in Ireland was based upon he idea that no tax was being paid anywhere. Verstaeger herself has said this. That if Apple paid US tax then that would change the Irish tax case.

One point would be that this shows what bollocks the tax case was in the first place. The other is that apple has just announced that it will be remitting that money into the US nd will be paying US corporate income tax upon it.

Collapse of EU tax case concerning Apple and Ireland, no?

I wonder what Spud is going to say about this? Especially since it pulls the rug from under the feet of most of the whining about tech giant taxes…..

Like this is going to work

Internet giants could be penalised through taxes if they fail to cooperate with government efforts to fight terrorism and online extremism, the minister of state for security has said.

I thought the main complaint was that we can’t tax these internet giants in the first place?