The TUC’s commitment to accuracy

Established in 1994, Amazon began life in owner Geoff Bezos’ garage as an online bookstore,

Oooh, and again!

In fact, UK-based organisation Fair Tax Stamp ranked Amazon the worst
of the big six tech giants for aggressive global tax avoidance

That’ll be Snippa’s lot “2 Fair Taxmark, December 2019, https://fairtaxmark.net/wp-content/uploads/2019/12/Silicon-Six-Report5-12-19.pdf”

Looking at cash tax paid

As we know, given that corporate tax is paid in arrears, cash tax paid doesn’t work when examining corporate tax. As Snippa informed us when he pointed out that if you put this year’s tax collections into last year’s budget then there was no Labour deficit. And we should, because last year’s tax was paid this year…..

“There is also a longstanding issue of the disparity in rates between bricks and mortar
retailers and online companies such as Amazon when it comes to rates for their premises.
For example, in 2016-17 Tesco paid business rates of £700 million, while Amazon paid just
£63.4 million despite generating far higher profits”

Err, yes? Rates being a tax on property, if you don’t use the expensive high street property then your property tax bill should be?

24 thoughts on “The TUC’s commitment to accuracy”

  1. “ As Snippa informed us when he pointed out that if you put this year’s tax collections into last year’s budget then there was no Labour deficit. And we should, because last year’s tax was paid this year…..”

    Murphy was wrong there too, because most tax is paid in the year – PAYE (i.e. most income tax and NI) mostly monthly, VAT mostly quarterly (only small businesses get to pay annually after the year end), stamp duty pretty much straight away, etc. And those are the big revenue-producing taxes.

    It’s really only corporation tax, self-employed taxes and CGT that have significant next-year payments, and they’re relatively tiny in terms of government revenues.

    Murphy managed to be wrong on both – first forgetting that corporate tax is (partly) paid the following year, then (when I and others pointed that out) incorrectly applying the annual shift to all taxes.

  2. Murphy: “ “There is also a longstanding issue of the disparity in rates between bricks and mortar
    retailers and online companies such as Amazon when it comes to rates for their premises”

    Good grief; that’s like complaining that people without a car don’t pay road tax!

  3. Oh, sorry, was that last one Murphy or the TUC? Have the brethren managed to find someone who knows even less about tax than Murphy to write their reports these days?

  4. Nicholas (Unlicensed Joker) Gray

    Are these the same taxing governments that complain about other countries’ tax arrangements? One man’s tax haven is another man’s unfair regime?

  5. Bloke in North Dorset

    “ It’s really only corporation tax, self-employed taxes and CGT that have significant next-year payments, and they’re relatively tiny in terms of government revenues.”

    And in some cases a proportion of those are are in advance as well. Mrs BiND had to pay advanced tax July on her income as a self employed artist. We regularly paid advanced corporation tax on our small consultancy earnings.

  6. BiND, indeed, yes (although for the self-employed the advance payment is based on last year’s profits, rather than an estimate of the current year’s, so when profits are increasing the tax on that extra profit isn’t paid until the following year.

    But we’ll done to Mrs BiND for selling enough as an artist to actually have to pay tax! Has she done the Dorset open studio thing in previous years? I might have seen (or even bought) some of her stuff.

  7. Amazon famously doesn’t make profits, preferring instead to reinvest pre-tax profits back into the company: which is probably how it grew from garage to global behemoth in just 25 years.

    Since corporation tax is paid on profits, it’s no surprise that Amazon pays very little.

  8. Bloke in North Dorset

    Richard,

    Yes she does open studios, usually her best sales come from it but it was cancelled last year. She’s jus had a successful exhibition at Gallery 41 in Corfu Mullen.

    She’s mostly on Instagram and Faceache now but you can see her work with a link to her Instagram account here:

    http://www.suefawthrop.me.uk/artists/artist.php

  9. BiND, most impressive and I do like the style. I’ll be looking to buy a couple when I move into my new gaff.

  10. I failed double entry bookkeeping by a large margin, so forgive the naive questions. Is income tax paid by the firm’s owners, the firm, or the employee? Does the division between employer’s and employee’s NIC have any logic or is the split purely arbitrary?

  11. @RichardT (timed before I got up this morning),

    And why shouldn’t (don’t) people without a car pay road tax? They probably do, in actual fact, what with buses, taxis, and delivery vans’ road tax being incorporated in their charges. I’d guess that most goods do have a road tax element in their prices, that is unless you live next to a farm, – and even then ….

    It’s in much the same league as those of us who don’t go on the train still pay for railways.

    Do criminals pay taxes to support the police? probably.

    Far more important as far as I’m concerned with any tax is whether or not we get value for what we pay. I suspect that in many cases we don’t.

  12. Amazon and Tesco don’t pay business rates – well they set up the Direct Debit from their account but the incidence is on the landlord for the big boys.
    The notion that high streets would still be thriving, BHS and Woollies still getting some customers, people piling into town centres on crowded buses or driving around for a parking space, all if business rates were reorganised according to how the TUC like it. Stuff ’em. The high street is more pleasant with lots of empties between the tattoo shops.

  13. philip said:
    “ Is income tax paid by the firm’s owners, the firm, or the employee?”

    If you’re asking about income tax on employees’ wages, the answer could be any of the three, depending on what you mean by “paid”.

    It’s a tax on the employee’s income, (calculated based on their total income, and it can affect the tax rate on any other income they have), and it’s deducted from their wages, so in that sense it’s paid by the employee.

    It’s physically paid by the employer firm (well, electronically these days, but you know what I mean), so in that narrow “whose bank account does it come out of” sense it’s “paid” by the employer firm (and if the employer makes a mistake it’s (usually) the employer who is liable to pay the shortfall, so that makes it a bit more really paid by them).

    Who suffers economically? Someone might have some payroll tax incidence data, but it’s possible that some at least is “paid” by the owners of the firm, if the firm has to offer higher pre-tax wages to attract the right employees. Probably more obviously an issue at the top end – international hires are sometimes on a net pay agreement that makes that explicit; employees with a realistic option of self-employment might want more pay to counteract the (limited) tax disadvantages of employee status. But also at the bottom end there’s an “after-tax pay vs dole” calculation where pay might have to be pushed up so that the take-home is enough to get people to actually go out to work, in which case the firm makes less profit and it’s owners “pay” in the economic sense.

  14. jgh said:
    “Nobody (in the UK) pays Road Tax, it was abolished in 1935 and replaced with vehicle tax.”

    Serves me right for making a flippant comment on a thread about accuracy!

  15. philip said:
    “ Is income tax paid by the firm’s owners, the firm, or the employee?”

    It is paid by the consumer in the price they pay for a good, along with all direct and indirect costs of production.

  16. Tax is always incident on a person. Who that is may vary; employee, owner, shareholder or supplier. Taxing business entities just obscures who ends up with the actual tax incidence.

  17. What gets to me about this argument is the assumption that because something has been taxed for a while in a certain way, that developments in how businesses operate are somehow unfairly evading that tax. The rules have changed, maybe the taxation ought to adjust?

    Ok, so online retailers are cutting the High St retailers lunch. Drop business rates and increase VAT. Problem solved, level playing field.

    In Australia, fuel tax is still the primary fund raiser for roadworks (nominally, in reality it goes into consolidated revenue as it should, shh don’t tell anyone) and anyone opposed to EVs immediately rants about who is going to pay for the roads. Personally I think that anyone stupid enough to buy an EV has already brought enough punishment on themselves, but again an easily solved problem, tax vehicles and/or mileage instead.

    Taxation policy should follow the economic activity, not the other way round?

Leave a Reply

Your email address will not be published. Required fields are marked *