In the Mail of all places

Netflix is latest multi-million-pound global company that does not pay UK corporation tax despite generating £200m of revenue in Britain

You’d think that paper would be able to get it right. Owned as it is by a non-dom Viscount.

We do not tax corporations on turnover

15 thoughts on “In the Mail of all places”

  1. The same nonsense in The Sunday Times, too.

    “NETFLIX, the world’s biggest online movie rental service, paid no UK corporation tax last year despite having 5m subscribers here and generating an estimated £200m of revenue in Britain alone.”

    They go on to say…

    “The company says it is in “expansion” mode and is making overall losses on its international operation.”

    So, if losses are being made, no tax is due. That should be obvious, but apparently not. Grrr!

  2. Newspapers should lead the way by paying corporation tax on their turnover. Their example will shame others into doing so.

  3. Does the Mail and other idiots realise that what they are demanding is effectively doubling VAT? That would be popular.

  4. The reason might be found in the accounts:

    http://ir.netflix.com/common/download/download.cfm?companyid=NFLX&fileid=826035&filekey=b69e6840-a84e-425e-9ea3-a0ff4c507e58&filename=SEC-NFLX-1065280-15-6.pdf

    In 2014, US (domestic) streaming accounted for US$ 3.4 billion of revenues and profits of US$936 million. The international streaming had revenues of US$1.3 billion and losses of US$160 million. (pages 18-19)

    I know that newspapers have lost a lot of hacks, but seriously can they not find someone to bother reading the accounts?

  5. That would be the non Dom who built a new country house (Ferne House in Dorset) and bought the nearby Bryanston estate but apparently lives in France. Wonder if he pays their taxes either?

  6. https://beta.companieshouse.gov.uk/company/09091899/filing-history

    Netflix Services UK Limited:

    UK accounts (a start up of just 6-7 months), and a loss of €261K with a quite comparable tax credit of €48K.

    I’ve not read them properly but unless there are lots of immoral (!) costs being transferred overseas I can’t see what the problem is? More likely the usual front loading of investment / start up costs?

    And they aren’t even paying interest on any of the necessary funding being provided from Holland.

    Not sure why there is no normal CA 2006 P&L account (ie, including turnover / cost of sales etc)?

    Is there actually any genuine substance to this attack from the Daily Mail or is just more competition to see who can chuck the most mud?

    And it’s normally the idiots on the left that do this? OK, we know the Mail is not “credible”, but did I miss something?

  7. The reason people feel aggrieved about this, I would wager, is because individuals have to pay taxes on turnover- income tax, deducted at source.

    Maybe it’s time that us plebs also just paid taxes on profits. Then everyone would understand.

  8. Given that Netflix is basically an intermediary service delivery business which pays a large part of its costs to rights holders maybe the question should be how much tax the rights holders pay, people like the BBC for example.

  9. Bloke in Costa Rica

    I commented on the Mail article that we tax profits not revenue and got red-arrowed by the usual gang of mouth-breathers. There was even some stupid cunt proposing an actual turnover tax, the upshot of which scarcely bears imagining.

  10. I agree, but we’re still left with the question of why if turnover taxes are so awful, we inflict them on individuals, either as PAYE, or purchase taxes, etc.

  11. Ian B

    But we already have VAT (a turnover tax for businesses). This is “another” and separate tax…

    Are you suggesting two forms of sales tax for businesses? And in which case why not save the admin and simply increase the rate for the first one?

  12. @pf
    Political definitions
    Direct tax=VAT=Voter asks-Why do I have to pay this much?
    Indirect tax=CT=Voter asks-what do you mean I’m really paying this? Tax incidence? What and why should I care?

    With the added benefit you can bash people for CT and have the public merrily join the lynch mob

  13. PF-

    I’m not suggesting any policy. I’m just saying it’s understandable that people who pay tax on their income are likely to resent companies who only pay tax on what they haven’t spent.

    Consumers pay VAT; when the VAT rate goes up, so does the price.

  14. Ian B

    I’m not suggesting any policy.

    Sure, I understand.

    I’m just saying it’s understandable that people who pay tax on their income are likely to resent companies who only pay tax on what they haven’t spent.

    Consumers pay VAT; when the VAT rate goes up, so does the price.

    And that’s exactly what would happen again if any new new turnover tax was introduced.

    It has to be, otherwise a lot of companies would simply head for bankruptcy. Ie, unless such a new tax was at a very low level (and assuming Corporation tax was abolished, ha ha), there generally wouldn’t be enough profit available after costs (relative to turnover) to absorb that tax and / or without materially damaging return on investment.

  15. From time to time the Tax Simplification ideas of Mark Wadsworth get a hearing or pass like floaters across the vision of the over-mortgaged delusionalists who infest the blogosphere. He tends to think that chasing a lot of taxable income/profits income is too difficult and may tend to depress productive activity anyway so he zeroes in on Land Value Tax instead.If a company has a fucking great piece of real estate but claims no income then they can cough up for the land value which is undoubtedly rising in our corrupt system(
    Actually I tend to the Worstall view that companies do not have a true legal personality and tax should bear down on personal income from the company but Mark sees no problem with corporation tax as such.Perhaps he feels that the legal personality of the corporation is extant and should pay the LVT).
    In short instead of moaning on about the intricacies of taxes on earned income ,TW should be boosting the case for LVT as a Tax simplifier (But he won’t do that because he has a baying horde of public school “anarchists”, and open enemies of the state and society to appease on here)

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