Working tax credits changes hit 200,000 households.

[carernotasaint]

www.guardian.co.uk/politics/2012/may/01/working-tax-credit-changes-200000?CMP=twt_gu

thanks niceguy

Funnily enough while the government claims these changes are necessary because the nation just can't afford it - and people are being sent letters informing them the government is going to fine them £10 a day for every day their tax return is late

This same government has just told American Investment Banker Goldman Sachs they can "defer" 99% of this year's tax bill on the companies £1.9billion profits made in Britain.

We work - we pay tax - we get fined if we don't pay in full yet a foreign investment bank get's told - they don't have to pay this year's tax bill on £1.9billion profits

www.independent.co.uk/money/tax/goldman-sachs-pays-41m-tax-on-19bn-profit-7682535.html

Bankers cause the requirement for austerity measures and get rewarded with tax breaks

So when mothers cannot spend time with their children because the government allows foreign companies to not pay tax - are these austerity measures actually necessary?

After all it was reported Amazon has paid no tax on British earnings because of a tax loophole

And Boots now pay 3% tax on profits because they switched their board meetings to Switzerland

The deficit is actually being made worse by this government fiddling the taxation system to ensure giant corporations don't pay any tax on billions of pounds of profits

The Goldman Sachs tax "deferment" is actually costing the nation more than the cost of the keeping the Working Tax Credits the same

So if one company being allowed to defer tax means every single British citizen who qualifies for working tax credit has this entitlement reduced

Just think of all the other austerity measures caused by tax loopholes for mega corporations.

And as each British company is taken over by these foreign companies - these foreign companies are automatically entitled to pay less tax than the British owners paid - on the same profits

Kraft bought Cadbury - Cadbury now pays less tax

Chinese state owned company Bright Foods has just bought Weetabix - I wonder if Bright Foods will now pay less tax on profits than the former British owners of the company - increasing our deficit and forcing more "austerity measures"

Is the term "austerity measure" really just the government spin for corporation tax rules which ensure companies no longer have to pay tax in Britain - unless they are British companies of course

So if you are self employed, when you fill out your tax return - just remember if your company is registered in Britain - you have to pay a higher tax rate than Goldman Sachs, Kraft, Bright Foods, Boots and all these other companies trading in Britain

I understand the sentiment beingamum but it's a complex world out there and often the reporting is very biased and only reports half truths.

Let's take Amazon as the first example. I suspect the 'loophole' you are referring to is the fact they are based in Luxembourg. And as such they can freely trade anywhere in the EU and only pay tax in their home country. Just in the same way that Dyson sell vacuums all over Europe but they only pay corporation tax in the UK on the profits they made. This is not a loophole but actually one of the whole points of the single European market!!! To claim it's a loophole is simply nonsense.

Amazon however do collect VAT on stuff they've sold which benefits the UK and of course not to mention all the jobs they create who in turn pay income tax etc. So to say they pay no tax is very disingenuous.

Boots, well isn't that a very good example of why we shouldn't hammer companies with neverending tax demands? Because they can very easily and DO switch to base their HQ in Switzerland. The reason Cadbury's has paid less tax is because Kraft have also moved their HQ to Switzerland. Many more companies have done this and I suspect more will do so in the future. The higher tax rate we demand, the more will flee. What do we do? Force them to stay at gunpoint?

As for Goldman Sachs, it's not something I am familiar with so I did a little googling. I found the following on the second link after the independent article above:

Absolutely laughable and misinformed commentary! The deferral is simply an accounting entry which is reflected in Goldman Sachs's financial statements. They will pay all of the £422.3m this year to the government - hence no losing out for Mr Osborne. However, due to timing differences between statements recorded for shareholders, and those recorded for Inland Revenue purposes, accountants 'defer' some of the tax to next years statement by creating a deferred tax asset. This is regular creative accounting used by all firms which does not in anyway changing the timing or magnitude of payments to HMRC, but changes the profit after taxation (and taxation expense) in their income statement. Truly poor reporting. Source

So if that's true we arent really losing anything, just accounting mumbo jumbo from the sounds of things.

Lastly corporation tax historically doesn't bring in a great deal relatively speaking (about £42 billion a year). We get far more of our taxes through VAT & income tax. That's not to say we should let companies actively avoid tax. But what I'm trying to say is that you could double corporation tax overnight and even assuming companies don't flee on a massive scale, you still won't plug the deficit.

I don't like tax evasion/avoidance anymore than the next person but vilifying companies based on dodgy facts doesn't help anyone. Like it or not, the UK competes in a global market now. If our corporation tax rates are not competitive, we lose out. Just in the same way that if Tesco's priced themselves higher than Asda then shoppers would simply switch.

"its a complex world out there and often the reporting is very biased and only reports half truths"

I wish more people would remember this when publications like the Daily Mail the Sun and more recently Woman magazine et al do their benefit bashing rhetoric.