But now Google has really pulled a fast one. Revelations this week show that it paid just £11.6m to the Treasury, despite generating $5.5bn (£3.4bn) income in the UK alone. This figure is £666m less than would have been paid at the full 20% corporation tax rate – that’s enough to pay for 22,000 nurses or to pay for jobseeker’s allowance for 220,000 people for a year.
The Guardian offered a slot to a UK Uncut bod who then goes on to claim that corporation tax is paid upon turnover?
Is The G now in league with the Mail or something? Plotting to make the teenage Marxists look even more stupid than they are?
I’d have thought that wasn’t actually possible, but they seem to be managing it.
Actually, it is quite enlightening to see that (a) a lot of commentators have spotted the error and are pointing it out (with glee), (b) the comments are not being edited, and (c) the morons trying to defend the statement are distinctly in the minority.
The BBC has an annual revenue of about 4.5bn. By my calculation they owe the Government AT LEAST £900m a year.
Why aren’t the teenage trots demonstrating outside the BBC?!!!
Funny you should mention the Mail: a friend of mine writes for the business section of that organ and in fact co-wrote (with a colleague of his) a story which glossed over precisely that point. He makes a habit of republishing his stories to Facebook, where a few of his friends commented on the dangers of comparing tax paid to revenue.
The sensible point(google paying peanuts) is detracted by stupidity of journalist.
You only have to look at the first paragraph to see how useless this article is with numbers:
“They can find the results to any question the human brain can ask in just 0.0023 milliseconds.”
No, no they can’t.
Guardian News & Media has turnover of £195 million. At 20% tax that would be £39 million corporation tax instead of their £9 million refund.
A minor point, but why does he use 20%? Full corporation tax rate last year was 24% (lower rates are only for profits below £1.5m).
So of the two parts of a corporation tax calculation, profit and rate, he’s got both wrong.
Am seriously starting to think that they believe it doesn’t matter. Mud sticks.
Publish any old crap as a headline and it will stick into the subconscious of some who don’t even bother to read the whole article, let alone question it.
Keep repeating and sooner or later the entire readership “remembers reading something about how [insert name of company here] avoid tax”.
Anthem is correct. Its the Ellsworth Toohey strategy down to a T. Repeat the same lies long enough and it becomes the ‘truth’.
Anthem
“Starting to think”? That’s how activism works, always and everywhere. For instance, I now know many people who are against fracking. They have only the vaguest, most cursory idea of what fracking actually is or what it does, but they have absorbed the idea that it’s a jolly bad thing, for some reason or other.
This is unfortunately the problem with trying to oppose activism with reason and truth. It’s a very poor strategy in terms of success.
Anthem has it right.
Playing leftists at their own game is where we have screwed up for thirty years. They don’t care if these facts are right or wrong, just that people believe them. It’s the game plan.
Since UNKUT started I have had the “Google doesn’t pay the 20 squillion tax it owes on the 200 squillion it makes” garbled at me by so many otherwise intelligent people it becomes tiresome correcting them after a while.
I wish I could graph the direct correlation between the occupation and economic stupidity of my acquaintances.
Short version: Liberal arts qualification + public sector job = belief in economic fairies.
Since UNKUT started I have had the “Google doesn’t pay the 20 squillion tax it owes on the 200 squillion it makes” garbled at me by so many otherwise intelligent people it becomes tiresome correcting them after a while.
Likewise. But the numbers and even the tax thing are not important. The “outrage”, protests, and what-not are really about anti-capitalism; the so-called tax avoidance of these companies is just another means to have a dig. UKUncut et al would prefer that we were all served by small independents and workers cooperatives and that these companies didn’t exist at all. That is the underlying problem and therefore you are not going to win the debate on facts.
@Stuck Record
“Playing leftists at their own game is where we have screwed up for thirty years.”
You are, of course, perfectly correct. But not in the manner you think. Playing the left at their own game is the attempted rebuttal of their theses. It’s a strategy doomed to inevitable failure. Illogic cannot be countered by logic, because those who would be convinced by the left’s arguments are not amenable to logic. If they were they wouldn’t be convinced. Arguing against a thesis gives more weight to the thesis because if it wasn’t valid it wouldn’t attract the argument.
In short, in the game of football it doesn’t matter how skilled your batting is.
I’m with Anthem & IanB. The left’s tactic is get the story out first, even if its totally and utterly wrong and false.
Considering that fracking never was going in Balcombe, the unwashed protesters seemed to spend a lot of energy campaigning about a non- existent event – which is a sign of stupidity in my book. Their brains had been addled by the whole GreenPeace/Friends of the Earth/Occupy mumbo-jumbo.
Using the law against activists doesn’t work either when you have dumb juries who are prepared to be persuaded that breaking the law can be justified by the cause (e.g. Kingsnorth).
I sincerely hope the Russians carry on with the piracy charges against the Greenpeace activists, give them long prison sentences and break their ship up for scrap. It may seem harsh but the consequences of continuing to let these lying scum influence policy and obstruct development are massive. They want to put people out of work, they don’t care if people die because they cannot heat their homes, they don’t care if billions remain in abject poverty because of a shrinking of the global economy and they certainly don’t care if innocent people and their families suffer as a direct consequence of their lies. They truly are evil.
DocBud, try the EDO-MBM case.
http://en.wikipedia.org/wiki/Smash_EDO_campaign
Caused £200K of damage, found not guilty, judge severely reprimanded – all because its valid to commit a “small” crime to stop the bigger crime of supplying small bits of armaments to Israel.
I managed to miss that, SBML, being currently in the colonies. Made very depressing reading.
In other news, Apple’s tax status has been deemed compliant by the SEC. So Ritchie et al can drop that one now.
http://www.theregister.co.uk/2013/10/04/sec_review_clears_apple_of_dodgy_tax_dealings/
…and it seems the tax expert himself deems the Guardian article “quite right”. Jeez.
https://twitter.com/RichardJMurphy/status/386165211205349377
I hope those attacking ‘the left’ for this sort of abuse of, well, ‘facts’ don’t labour under the impression that the populist gobs of ‘the right’ aren’t exactly the same.
The distinction, in my experience, is that lefties are far more prone to be in denial about it all. They either genuinely don’t see that Polly, Johann and Owen Jones use exactly the same tactics as Littlejohn.. or (maybe more often) they do but they think it’s OK because these lies are GOOD lies.
Max Keiser is having enormous fun with threads like “only the little companies pay tax” ; “Cameron says profit is a not dirty word, well it is to big corporations who arrange their accounts to show no operating profits”; “Why aren’t individuals allowed to pull the same scam? They don’t show any profits after they’ve spent their incomes”.(see October 5th edition ).That’s markets for you: Keiser comes along ,is funnier and more radical than TW.
“Playing the left at their own game is the attempted rebuttal of their theses. It’s a strategy doomed to inevitable failure. Illogic cannot be countered by logic, because those who would be convinced by the left’s arguments are not amenable to logic. If they were they wouldn’t be convinced. Arguing against a thesis gives more weight to the thesis because if it wasn’t valid it wouldn’t attract the argument”
One cannot change the publics perception of Google etc al by attacking the union’s tax affairs using the same tactics the Left have used on corporations, no, that is correct. But by producing a public reaction of ‘a plague on both their houses’ you are making the Left’s attack on corporations less attractive to themselves, if the result is a public revulsion with unions as well.
Its not pretty but the basic tactic is to drag something the Left want to preserve into the muddy pool of lies they have created, and threaten its existence too. Its a sort of hostage situation – ‘You want to take down the corporations, fine, but the unions go down with them’
I’ll have to echo the The Thought Gang here and point out that the Left certainly doesn’t have a monopoly on peddling malicious falsehoods.
I also think he’s correct in stating that Leftists justify their distortions to themselves by treating their lies as being in service to a greater Truth.
I spose this is relevant then; how much of the low declared profits is genuine, and how much is Hollywood Accounting?
@ Ian B
That’s the useful question. And the one that some of the people banging on about turnover are really asking. And that’s where the avoidance (if there is any) is happening.
Enough people have done the sums on Starbucks to tell us that they really don’t have an especially profitable underlying business. Ditto Amazon. Google.. Apple.. maybe not so much.
Tax ‘abuse’ does exist and not every company can explain away a low charge by pointing at what parliament/Brussles actually intended. Whether such ‘abuse’ so OK or not is moot.. and people are entitled to either view. The trouble is, too many of them get their view from liars and hypocrites like Murphy and Hodge so there’s fuck all chance of a grown-up debate.
Face it : any accountant reporting one of the giant corporations as making a juicy great profit is not going to get the gig.
TW’s stance is ,if its legal, there’s nothing wrong with setting out accounts to absorb profits .But there’s also the point : is it right?
Keiser’s point d holds up. Why should n’t everybody be taxed as companies.? Then they too would n’t pay any tax, as after living expenses they would n’t show a profit.
Last Keiser Report (506) with Michael Hudson was a classic : all the points about how everybody is being screwed over by banks inflating another house price bubble which Timid Tim used to touch on ,here are developed in headlines of flame a mile high.
Although mining is struggling a bit at present, BHP Billiton posted a profit of $12 million last year. I guess its accountants will be for the chop.
The only expenses a business can deduct from turnover are those used to generate the turnover; staff salaries and other costs, buying stock, marketing, purchase and maintenance of equipment, etc.
Individuals could, at most, deduct the cost of getting to work, the wear and tear on clothes (or complete cost of uniforms), the cheapest food that can provide the energy needed to perform their work and not much else. They certainly couldn’t claim for holidays, anything transport related above the cheapest means of getting to work, booze, fags, condoms, prostitutes, driving to lay-byes for dogging, weddings, birthday gifts, Christmas pressies (or Ramadan pressies), Sky television, dinners in or out, living in anything but the cheapest available accommodation, visits to zoos, to the picture house, to the ballet, etc, etc, etc.
In other words, the idea of taxing individuals as companies may be an acceptable idea but what it won’t do is result in individuals paying no tax. What it probably would do is result in lower taxes for the rich as the company tax is lower than the top rate of income tax and higher taxes for the poor as there is no tax free allowance for companies and the company tax is higher than the lower income tax rates.
As to the notion that there is a moral aspect to tax law, that is complete and utter bollocks. I expect my accountant to comply with the law in determining my tax liability. I don;t expect him to tell me I owe x but he estimates that I should rightfully pay y as if I don’t there won’t be enough money for Middle East wars, subsidising renewable energy, policing hate crimes, funding the arts, etc. Won’t somebody please think of the luvvies!
@ DBC Reed
Are you mad or just stupid? Most mega-corporations try to report the highest profits that they can to boost their status and share price and the LTIP rewards for the CEO and CFO.
@dbc reed: if you tax companies based on turnover rather than profits that means that either you drive all high-cost base companies (like manufacturing or mining or farming) into bankruptcy, or if you have a very low tax rate so that they can afford to pay it and thus tax the Apples of this world very little in terms of their profits. Why would you want to do this?
Sorry, that should have been $12 billion for BHP Billiton’s profit.