Indyref 9

[IrnBruTheNoo]

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Salmond's NHS Claims Have Been Shredded by IFS

Independence is the biggest risk to the NHS in Scotland.

"I have learned that PM met supermarket bosses at No.10 this afternoon & urged them to go public on how prices would rise in indie Scotland". Robert Peston via Twitter

^
Corporation tax is payable where the company's activity takes place, not in the country where the company is officially registered.^

Why is there such problems getting Amazon et al to pay tax then? Why do brass plaques move to lower corporation tax places like Ireland?

I'm not saying that you or Alex Salmond is wrong on this, I hope you're right, I just want to see it applied to the big multinationals that are currently evading or paying very minimal tax.

If a company is registered in the UK and does most of its business in the UK, it will have to pay corporation tax in the UK on that business. It has no choice in the matter.

Salmond can say what he likes, but as with so many of his claims he is far from honest.

italics fail my apologies

Ah, so we can scream about the injustice of Amazon, Starbucks et al who don't pay sufficient UK corporation tax because of how they structure their arrangements and where they are based. But when someone suggests the same good happen to Scotland with the banks, that's an insane suggestion...

Given the set up of the banks, you'd have major difficulty proving what was Scottish income. Servicing accounts here, for example, may well not be enough to count if the company the account is with is rUK based and the customer technically belong to an rUK branch.

I'm just saying, consider the fact that moving a head office could have bigger impacts than just a blooming brass plate.

Yes, statistically, that's what happens with corporation tax now, and according to AS at a press conference, will continue to do so. They'll pay corporation tax in Scotland on their activities in Scotland, and in England on their English earnings.

Setting aside my dislike of AS's growing habit of speaking on behalf of other people - a lot of the companies moving their head offices do most of their business outwith Scotland. So a significant proportion of the tax would go.

According to a Law Society briefing my manager was at, 90% of Scottish financial sector clients are in rUK, 94% of Scottish FS insurance products are sold to rUK, and 84% of Scottish FS mortgages are sold to rUK. There will be very little tax paid if you base it on activity.

Not scaremongering, just letting you know the approx splits (and I know you won't like this, but I don't think I can share the document, although the figures are probably recoverable with a bit of detective work that I don't have time to do just now)

Christ, SpiritedWolf, are you actually inside my head! That was an impressive xpost!

Business follows money. Of course they'll register in the UK for financial stability and a known currency.

Amazon is not a bank and can switch its profits between countries.
Banks have to follow different regulations, otherwise they would all be trading from Luxembourg too.

So if the average UK wide company does 10% of its business in Scotland, but 90% in the rUK and is registered there... does it pay 100% of its corporation tax to rUK?

Doesn't sound like we'd get much in the way of corporation tax receipts?

Why is there such problems getting Amazon et al to pay tax then?

Because it is very easy at the moment for multinationals to shift money around. Amazon pays no UK corporation tax as, on paper, it makes no profit in UK.

If a company is registered in the UK and does most of its business in the UK, it will have to pay corporation tax in the UK on that business. It has no choice in the matter

Almost correct. Let's assume a company operates in iScotland, rUK, and IRL. It would pay corporation tax in Ireland for the profits it makes in Ireland. It would pay corporation tax in rUK for the profits it makes in rUK. It would pay corporation tax in iScotland for the profit it makes in iScotland.

So if RBS move their head office to rUK it will have very little impact on the amounts of corporation tax paid in rUK/iScotland. If, however, it pulled completely out of Scotland and moved all operations to rUK then obviously it would no longer pay corporation tax in iScotland.

So if the average UK wide company does 10% of its business in Scotland, but 90% in the rUK and is registered there... does it pay 100% of its corporation tax to rUK?

No it pays 90% to rUK, 10% Scotland. As Stats said upthread the current GERS figures as far as possible are based on economy!ic activity actually in Scotland.

I think that's probably an over simplification tbh. There were/are for example a fair old number of insurance/financial services companies which based themselves in Ireland who had no customers there at all. In fact, they didn't even have an office - just a plaque and some consultants providing services which made them Irish enough to comply with residency.

They didn't do that for fun.

As RBS have just confirmed that they would not be moving jobs down south,

Believe it when I see it. Like many others this is often trotted out by companies only for a u turn to happen later. I have experienced this as have many others.

Thanks Sallyingforth for clarifying the different regulations. And sorry for the confusing cross posts.

Statistically as I was catching up with the previous thread, you often said what I was thinking, but more succinctly and eloquently

ItsAll - they don't actually define "economic activity" - that was part of my point. You're kind of assuming that it's split by customer. I would define economic activity to be where the work/activity to provide the good or service is being undertaken. So at the moment more than 10% is in Scotland.

I think that's probably an over simplification tbh.

Of course. Starbucks/Amazon etc are acting entirely within UK law. If you have the wherewithal, its pretty easy to pay corporation tax where it us cheapest, or not at all.

What I said above, is how it is meant to work. Like so many tax things a good accountant can save you a lot.

Starbucks use transfer pricing.

MIL was visiting today so not had a chance to catch up yet.

DM phoned to say that my cousin's husband who works for a FS in Glasgow has been told if it's a Yes vote majority on the 19th he'll not be working in Glasgow and not to bother coming in. He'll be told if he's relocating to Leeds or not. All computers will be shutting down.

I had a feeling that was the case Grovel.

Corporation tax is during the country of formal registration.

You can rail against the dying of the light all you like. But corporation tax is due where the profits of the registered companies file their tax returns.

AS is merely stating a desire. He would need primary tax legislative authority to make a change. It would immediately hasten a departure of company activities and profits.

It plays to the "evil" Amazon gallery but makes as much sense as claiming you have planted a magic money tree.

The finance industry is one of the few areas in Scotland where women can expect well paid jobs and interesting work

Entirely subjective, Chelsy

Speaking as someone with a very interesting, decently paid job in HE.

What makes you think that?

Good article about corporation tax etc:
www.bbc.co.uk/news/business-29160297

BP and Shell are backing No.
From the Telegraph today :

The chief executives of Shell and BP back warnings by Sir Ian Wood that oil revenues will all but have stopped by 2050

BP today came out against Scottish independence and backed warnings by the oil industry’s most eminent businessman that Alex Salmond’s economic case for separation relies on highly inflated estimates for North Sea tax revenue.

Bob Dudley, BP Group chief executive, said Sir Ian Wood’s assessment that the North Sea would be all but spent by 2050 was correct and urged Scots to vote No. His opposite number at Shell also backed the estimate.