Well, no, not really

Google’s UK staff took home an average of £234,000 last year on the back of £441m in share-based payouts at the search giant.

The company’s UK business saw its total wage bill rise to more than £1bn for its 4,439 UK employees – an increase on the £829m earned by staff in 2018.

However, the company’s tax charge for the year fell from £65.6m to £44.3m. Around £10.6m in taxes were deferred.

The only logical manner of calculating the tax charge is “What is the tax charge on this activity?” – not which legal person or entity is nominally responsible for which bit of the tax bill. We do know that tax incidence exists after all.

Of that £billion in wages some £300 to £400 million will have gone in tax, no?

13 thoughts on “Well, no, not really”

  1. Corporation tax is levied on profits rather than wages. Deferred tax is based on timing differences when profits and expenses are recognised differently for statutory accounting and tax to recognise that in the fullness of time all profits will get taxed. Some differences are permanent, so interest paid is accrued for accounting purposes but charged to tax when it is paid. The major cause of deferred tax is capital allowances, recognising cost of fixed assets upfront for tax versus depreciation over many years in the accounts. So nothing to look at there.

    The figure for wages in the accounts is gross pay, so it obviously includes PAYE and employees NI. Staff costs equals gross pay plus employers’ NI. It would be surprising if those figures were illegally computed. Nothing to see.

    However, a few years ago, Soapy Jo made the fatuous comment that he didn’t feel that it was defensible to say that a company could appear to pay a low rate of corporation tax by paying more paye. Yes he is a twat

  2. The Teletwats don’t seem to grasp the notion that the amount of income tax and NI paid on a 234,000 salary is one hell of a lot more than corporation tax on the same amount… Are they really that innumerate or is it just excrement-agitation?

  3. Diogenes

    I seem to remember Murphy regards deferred tax as tax avoidance because it is not tax paid to the authorities.

  4. Corporations: pay lots of corporation tax and therefore less on wages.
    The left: RRRREEEEEEEEEEEEEEEEEEEEEEE exploiting workers
    Corporations: pay lots of money on workers and therefore less on corporation tax
    The left: RRREEEEEEEEEEEEEEEEEEEEEEEE tax avoidance

  5. These types of article enrage me. Either a writer is completely dishonest or utterly stupid to not understand the offset between income tax and corporation tax. The kind of thinking that results in that woeful piece of work by Farnsworth that classed capital allowances as a subsidy to Business.

  6. The Times has essentially the same article, complete with a quote from an ‘expert’ from the Fair Tax Mark. At least it wasn’t Spud.

  7. Panda

    Averagely stupid, but mostly lying cunts.

    CM

    “The Times has essentially the same article”

    Very odd. Your other comment, linking to the Times article, and before Panda’s comment, appears here,

    https://www.timworstall.com/comments/feed/

    but not above on this thread itself (unless that’s not “yet” appears above). I’m going to keep that Times link for the next time anyone I know tries to tell me that the Times is still a quality newspaper. Yes, I know, there are hundreds one could choose from to make the point, but it will do, especially as it’ll probably kill two birds with one stone if their next comment is likely to be re google / tax avoidance or something equally imbecilic….

  8. @Mal Reynolds April 8, 2020 at 9:47 am

    Yep, nailed it

    Disgraceful Tele & Times pushing Left anti-capitalist agenda and lies

  9. @PF
    Yes, I posted the link on the other thread before I’d read this one.

    Essentially the same Times article appears several times a year, and I (and a few other stalwarts) make essentially the same comment, while the refugees from CiF bang on about evil capitalists.

  10. CM

    “Yes, I posted the link on the other thread before I’d read this one.”

    Ah, OK, I’m being a dope! Two current threads with identical headers! I didn’t spot (on the feed http) that your 1st comment was on the other one…

  11. In the U.S., say you buy a $100 thousand dollar piece of equipment.

    Wait. Say you buy $100 thousand dollars worth of paper clips. It is a cost. It is deducted from your profit. Immediately, for the taxable year for which the expenditure was made. 100% of it.

    Back to piece of equipment. YOU CANNOT DEDUCT THE COST OF IT FOR THE YEAR YOU BOUGHT IT. You use a depreciation schedule based on what kind of equipment it is. Say you get to deduct 10% for the year you bought it.

    “capital allowances are a subsidy”

    Perhaps I misunderstand what is meant by “capital allowance.” But where I come from, capital allowances are a PENALTY, in that you can’t deduct the cost when you spend it, you only get to deduct it over time. Cost vs capital tax handling.

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