Brexit......what are the likely implications on UK and European boating?

[henryf]

But the fact is I see a Boots on every UK High Street.

When I spend money in there I expect them to pay the same company tax that I do. If they don't then we are losing money out of the loop. If you want to do business in Britain then you need to pay your corporate taxes. We are a great economy, average Joe or Jennet are happy to pay £3.50 for a coffee & £8.50 for a tube of Boots own brand cracked heel cream so you don't need to give your stuff away. But to come in here, make money and then slip out the back door is wrong.

Whilst Europe may want to harmonise tax I would rather we deal with that ourselves. There is no way the Greece and England can share a harmonised tax system. By leaving Europe why should our taxes go up? Less money in payments going out and a very strong stable economy across a range of activities.

If all they are going to do is take money out the back door why do we need to attract large foreign corporations? Why not have British or morally decent companies who pay what is due on profits generated within our country. Ultimately we should be the Singapore of Europe. A nice stable currency without 27 or 28 nations to upset the apple cart, a small manageable land mass, an educated population, a diverse range of activities, a stable democracy.

And we speak English. Its horrible to say but that makes us a glue which joins nations. Can you see Americans speaking French when arranging their banking affairs?

Henry

 

[rafiki_]

Henry makes a good point re language. In fact most international businesses, wherever their home base, use English as their business language.
Regarding tax, the Government gets the tremblies whenever a big multinational talks tax, as they use the jobs threat. This causes HMRC to back off. They use the " our '000's of employees pay tax, NI" etc, which generally is more valuable to HMG than Corp tax.

 

[henryf]

Ok. Lets take Starucks as out example here.

Making coffee isn't rocket science, you don't need a degree. Lets suppose I start a company called Britannia Coffee. We love fair trade, we pride ourselves in the fact we pay all our tax and don't spend any money on evasive tactics. We pay a living wage to all our staff, employ great people across all age ranges.

We have a 110% guarantee programme, any problems and we will either replace your drink or refund and give 10% to charity by way of an apology. Our cakes and goodies are designed by none other than Mary Berry. We do loads for local community groups.

If Starbucks don't want to trade in the UK then feck off and Britannia coffee will take over their outlets. Our staff will pay NI in just the same way Starbucks staff do. The only difference is we don't ship profits out of the UK.

I've never understood this whole jobs argument. Jobs which send their profits overseas aren't proper jobs. In fact they are taking jobs away from usually smaller independent companies who pay their dues.

The same is very true for Amazon. They have decimated specialist, tax paying retailers.

Henry

 

[Deleted User YDKXO]

Regarding tax, the Government gets the tremblies whenever a big multinational talks tax, as they use the jobs threat. This causes HMRC to back off. They use the " our '000's of employees pay tax, NI" etc, which generally is more valuable to HMG than Corp tax.

We need to get this tax avoidance business in perspective. The only tax that companies are avoiding is corporation tax on profits and corporation tax is actually quite a small proportion of the tax take. These companies still generate all sorts of other taxes such as income tax and employees NI on anyone they employ, employers NI, VAT, local business taxes, fuel duty, BIK taxes and APD on business travel to name a few. Not only that but of course these companies also generate jobs and wealth so of course the govt has to tread a fine line between ensuring these companies pay the tax that is due and not driving them out of the UK altogether.

 

[gjgm]

U mm what very strong stable economy?
Sorry H, we have a totally out of balanced economy and it is not going to take much for the cards to collapse. All that inward investment..so that is going to stay because instead of being part of a major trading block, we will go it alone? That is one for a brave investor to buy into. Or rather has bought into, but now the game is changing, might wonder if the downside risk is not looking a bit more worrying than any potential upside. Stable currency. .now I realise you are having a bit of a tease. ..!

 

[Poignard]

We need to get this tax avoidance business in perspective. The only tax that companies are avoiding is corporation tax on profits and corporation tax is actually quite a small proportion of the tax take. These companies still generate all sorts of other taxes such as income tax and employees NI on anyone they employ, employers NI, VAT, local business taxes, fuel duty, BIK taxes and APD on business travel to name a few. Not only that but of course these companies also generate jobs and wealth so of course the govt has to tread a fine line between ensuring these companies pay the tax that is due and not driving them out of the UK altogether.

So it's OK for a multinational company that sells goods and services here to be excused paying corporation tax but a British company should pay it?

 

[Deleted User YDKXO]

So it's OK for a multinational company that sells goods and services here to be excused paying corporation tax but a British company should pay it?

Nobody is excused paying any taxes. Companies pay what is legally due under British tax law. If you've got a beef with that, don't blame the company but the govt that makes that law. Unless you're suggesting that they should pay more tax than is legally due in which case I would ask you this question. Would you be happy being a shareholder of a company that paid more tax to the UK govt than was legally due and, as a result, paid you a lower dividend on the shares that you own in that company?

 

[Poignard]

Nobody is excused paying any taxes. Companies pay what is legally due under British tax law. If you've got a beef with that, don't blame the company but the govt that makes that law. Unless you're suggesting that they should pay more tax than is legally due in which case I would ask you this question. Would you be happy being a shareholder of a company that paid more tax to the UK govt than was legally due and, as a result, paid you a lower dividend on the shares that you own in that company?

If one company pays more tax than another but both are engaged in a comparable activity, ie selling things to UK customers then either one of them is being excused or the other is being penalised. That is a wrong that is not made right by accountants' exploitation of an overly complex tax system. I would not have the slightest objection to any multinational company I invested in paying the same amount of UK tax that an equivalent UK company paid. (Even if it reduced my dividends.)

Why on earth should I not want it to? We do not all have the narrow mentality of accountants.

 

[henryf]

We need to get this tax avoidance business in perspective. The only tax that companies are avoiding is corporation tax on profits and corporation tax is actually quite a small proportion of the tax take. These companies still generate all sorts of other taxes such as income tax and employees NI on anyone they employ, employers NI, VAT, local business taxes, fuel duty, BIK taxes and APD on business travel to name a few. Not only that but of course these companies also generate jobs and wealth so of course the govt has to tread a fine line between ensuring these companies pay the tax that is due and not driving them out of the UK altogether.

I could not disagree more.

Jimmy Saville paid income tax, rates, VAT, kept tracksuit makers in larmé and raised tens of millions of pounds for charity. The only one thing......


All the things you list are normal expectations. If we're having a haggle can I knock paying VAT on the head for the Porsche business. I promise to keep employing people and I won't move the business abroad ?

Henry

 

[grumpy_o_g]

Nobody is excused paying any taxes. Companies pay what is legally due under British tax law. If you've got a beef with that, don't blame the company but the govt that makes that law. Unless you're suggesting that they should pay more tax than is legally due in which case I would ask you this question. Would you be happy being a shareholder of a company that paid more tax to the UK govt than was legally due and, as a result, paid you a lower dividend on the shares that you own in that company?

Agreed. Interestingly public/customer base pressure and media exposure seems to be quite effective at increasing tax revenue. Maybe the answer is for the Government to require what percentage of UK revenue and profit is paid in UK tax? Then the public have the opportunity to put their money where their mouth is (which I think many would).

 

[MapisM]

Mapism, this is a serious question. We have heard a lot on this thread and on the many threads on the Lounge about why many Brits want to leave the EU. We have also heard a lot from people who favour staying in the EU about the negative economic consequences of the UK leaving the EU. But what we haven't heard anything about is what are the positive reasons for Britain to stay in the EU

Obviously you are Italian and like the vast majority of your countrymen, you favour Italy staying in the EU. So what do you see that is positive about Italy staying in the EU and do you think those same positives apply to the UK?

I'm afraid I'm going to disappoint you M, because a serious question deserves a serious answer, but I'm not sure to be willing to write one.
In fact, on one hand the answer (my personal one, I mean) would take quite a while to be explained, and OTOH I don't want to bore everyone to death.
Suffice to say that I very much sympathize with the original vision of the chap that I previously mentioned, even if he's long dead.
Which is actually good for him, considering what eventually became the EU that he envisaged...
...though I'm pretty sure that if he were still with us, he would never give up trying.

Anyway, it's interesting to see how everything nowadays turns into an economic debate, while the whole EU concept - again, as it was conceived - is much more akin to philosophy (if not even religion!), rather than accounting.
I mean, debating whether to stay or leave only based on the "economic consequences", to my ears sounds like deciding to be Catholic or Protestant based on whether you are expected to give less offers to the first or to the latter...
But for the records, since this seems a hot topic, the last time I came across EU statistics, IT was one of the major net contributors to the EU.
IIRC, above the UK - I'd dare saying both in absolute terms and in % of the GDP, though I'm more positive on the latter.
Which is one of the reasons why I think you are wrong in saying that the "vast majority" of Italians are pro-EU.
If I had to bet on a potential IT referendum result, I probably would put my money on stay rather than leave, but I surely would not expect an overwhelming consensus.
And fwiw, I would have probably lost my money if I would have bet on the Scots referendum, so who am I to know...?

 

[MapisM]

If we're having a haggle can I knock paying VAT on the head for the Porsche business.

Why, do you pay VAT on used cars?!?

 

[henryf]

Why, do you pay VAT on used cars?!?

No, we work on a margin scheme whereby VAT is due on the gross difference between purchase and sale price. Any work carried out by a VAT registered supplier can of course be offset, we've already paid the VAT on that element to them but it does have the somewhat unfortunate consequence of adding 20% to my wage bill on which I have already paid National insurance.

To pay someone £100 pre income tax we must make a gross £132 (10% employers national insurance then 20% VAT). Mandatory employers pension contribution (plus Vat) is on top of that lot.

Unlike normal VAT we can't list it and it can't be reclaimed by anyone.

You need to be careful. If we buy a car for £5k, spend £850 labour preparing it then sell it for £6k we end up losing £17.

Vat due on £1,000 gross margin is £167. Actual gross profit £833 less any costs. If that £850 labour bill was 5 days at £170 to the employee we would also owe £85 employers national insurance taking our loss up to £102

What makes it hard is the fact we are competing against private sale cars and cars sold by dealers who choose, illegally of course, not to join the VAT club. You would be surprised at how prolific some of these under the radar dealers are.


Henry

 

[Cheery]

Henry, it goes on throughout lots of businesses, particularly my own, fish and chips. Again it is the tax man who needs to tighten the rules. As it stands in my business you don't have to have a name and address on an invoice, therefore the goods you buy aren't traced to you. By doing this you evade 20% on your takings plus corporation tax. HMRC are getting round to taking people to court, I heard of one in the Midlands last week who was fined £200,000. I would rather spend my hard earned without walking down the street getting a tap on the shoulder or in the VAT man's case, him kicking the door off looking for his money.

Sorry for the thread drift but HMRC need to make tax collection simpler to understand and pay and harder to avoid paying your dues.

 

[Hurricane]

Nobody is excused paying any taxes. Companies pay what is legally due under British tax law. If you've got a beef with that, don't blame the company but the govt that makes that law. Unless you're suggesting that they should pay more tax than is legally due in which case I would ask you this question. Would you be happy being a shareholder of a company that paid more tax to the UK govt than was legally due and, as a result, paid you a lower dividend on the shares that you own in that company?

I agree absolutely.
Unfortunately, there seems to me to be a "catch 22" problem here.
I'm sure you are correct and that ALL companies in the UK are paying their taxes according to the law.
It is just that some circumnavigate the law (by redirecting the business into other countries for example) thus not paying tax into the UK.
So what should the government do?
Change the law - maybe those companies would then take their business completely away from the UK?
We only hear about the controversial cases (Starbucks and Google for example) but I suspect that this is a huge problem and that it is better to have some tax from these companies than to change the tax regime and loose much more.

Leaving that point and coming back to Brexit - I have another very important (IMHO) conceptional point about Europe.
I think that MAPISM is saying that it is a shame that everything in the EU comes back to economics (financial).
Unfortunately, it is a fact of life that everyone has to pay for things and services that they use.
The same is for countries and it seems to me that, economically, the balance is for some European countries (Germany and France for example) to be net financial contributors to the weaker countries.
It would be seen by the hard working people in Germany that they are paying towards the living costs of less hard working people in (say) Greece.
IMO, this can only lead to resentment.
Conversely, the poorer countries will get fed up with the austerity measures that are/will be placed on them.
We see this already in countries where riots have broken out.
IMO, this can only get worse because there is no solution to the economic imbalance throughout Europe.
Resentment by the richer countries is the big one as it drives austerity against the poorer countries.
Allowing Turkey to join would just make this matter worse.

It has been said many times that the EU has protected us over the years from a third European war.
IMO, the problem that I outline could actually create war rather than protect from it.

 

[henryf]

I don't think that tightening the UK tax laws will cause businesses to leave. Ultimately if you can't make a profit from a £3.50 cup of coffee and pay standard UK taxes then move aside and let someone else in who can.

There is a big differentiation between companies choosing to locate their European or worldwide headquarters or manufacturing centres here and business transactions carried out in the UK. I can see that the former might enjoy some help from our government, possibly made easier if we left Europe. The latter is clear cut and full standard tax must be paid.

As for Europe creating problems, I can see your point. It's a bit like forcing social housing on a well heeled development. Neither side is entirely comfortable and would actually rather be amongst their peers.

Europe is made up of very different countries with diversification increasing year on year. Ultimately I want harmony, I want peace, I want free trade and I want the ability to pull together in times of trouble. I'm not sure I want to be told what to do by an ever increasing number of members each with their own agenda.

I'm still looking to highlight the advantages of being in or being out. I don't want to vote based on fear.


Henry

 

[Hurricane]

As for Europe creating problems, I can see your point. It's a bit like forcing social housing on a well heeled development. Neither side is entirely comfortable and would actually rather be amongst their peers.

Actually, I don't agree with your analogy.
I think it is more like living in a street where some houses pay other houses bills.

 

[MapisM]

No, we work on a margin scheme

Doh! I was actually aware of that peculiarity of car business, but didn't think of it while posting my comment, sorry. All understood & agreed.

Otoh, when you say...

What makes it hard is the fact we are competing against private sale cars and cars sold by dealers who choose, illegally of course, not to join the VAT club.
You would be surprised at how prolific some of these under the radar dealers are.

...of course I'm surprised, after you said that what Brits have in common with Germans is that both pay tax.

Oh, apropos, the answer to my previous question #2 was actually D, not UK.
But no worries, I'd never dare arguing that UK is the clear winner, when it comes to question #1.
All IMHO of course, though I could name names about these things. Unfortunately, if I would, I should kill you...

 

[MapisM]

I think that MAPISM is saying that it is a shame that everything in the EU comes back to economics (financial).

Yup, but it's actually even more than just a shame, it's a big mistake.
When Kohl drove the German reunification, accounting was the last of his concerns - in fact, many (probably most) W Germans were very unhappy about the financial consequences. Nowadays, nobody in his right mind would question that his vision was right.
Of course, I'm well aware that it's a stretched comparison, and that painful as it has been, the German reunification is a walk in the park compared to the idea of a European Union.
And whether this will eventually become a reality or not, I honestly don't know.
But one thing is for sure: IF it will, aside from possibly some teenager forumites among us, I'm afraid none of us will be around to see it. And THIS is a shame.
Otoh, as they say, Rome wasn't built in a day. We are talking of something which is potentially one of the greatest revolutions in the history of mankind.
Beancounters should be banned from having a word on that, imho. In this sense, democracy is NOT a good thing, if I may say so....

 

[henryf]

So what should we be fighting for if not to leave Europe then ?

Henry

Edited to say :

And is there a way this vote could be used to the greater good of Europe. In other words rather than potentially breaking Europe up could it be a catalyst for other countries on the edge?

H.