to find the witch hunt against Starbucks, Amazon, Google etc laughable

It is not perfectly legal for somebody who is employed to pretend they are self employed. We had strict guidelines for deciding employment status when I was in the Inland Revenue.
Yes, I agree that the government should concentrate on closing all the loopholes, but of course these hugely profitable companies can afford top accountants who will simply devise new 'legal' ways of paying no tax.
A very cosy relationship developed between the last head of HMRC, Dave Hartnett, and several large companies such as vodaphone, and they were allowed to get away with millions of pounds in interest. Private Eye constantly pointed it out - possibly the only publication that had the courage to do so.

The difference between tax avoidance and tax evasion can be a fine one. In one case you employ a clever accountant and he/she exploits loopholes in the system, in the other, you could go to jail. Perhaps the basic flaws in the system are the first place to start. MP's expenses were a similar case - if the loopholes exist, someone will find out how to drive a cart and horses through exploit them.

greatnan possibly things have changed. I don't understand how people can get away with defining themselves as a company when the vast majority of their income is from one source. Is there a rule of thumb?

As regards companies, business is global now. Very easy for any company to legitamately headquarter in any low tax jurustriction (Switzerland, Ireland, Cayman Islands etc) and charge their operating companies huge fees in this country. Hence, little profit to incur tax. It ain't rocket science and the fact that it hasn't been stopped is the problem. Hence my original post. It's the hyprocrisy that gets me (and Margaret Hodge!)

gracesmum these companies are avoiding tax, entirely legally. The MPs I think were on a different level. It should be quite easy for legislation to remedy the problem re Starbucks et al. There was a small flurry of name and shame - Jimmy Carr etc but on a much bigger level, why Starbucks, Amazon, Google etc.? Don't British companies do the same thing? Let's have a list.

"It is not perfectly legal for somebody who is employed to pretend they are self employed. We had strict guidelines for deciding employment status when I was in the Inland Revenue."
greatnan This is of course true, but someone who is self-employed, for example providing a consultancy service to different clients, can incorporate their business in which case (I think ) only 10% corporation tax is payable on the profits, instead of being taxed at the same rates as employed people.

Pfizer make billions in this country but don't pay tax either.

jane you're right insomuch as' someone who is self employed, providing a consultancy service to different clients, can incorporate their business'

My gripe is, we have individuals, most notably in the media, who avoid tax by dint of incorporation. They earn most of their money from one source. BBC, ITV, Sky, whatever.

If theie company shows a profit of £300k, they pay 20% tax. Profit is earning less expenses. Expenses can mean various things to various people

It stinks and back to my OP, the witch hunt is laughable

8 million tax paid in ... 14 years, for Starbucks in the UK? I don't care what you call it, evasions, avoidance, whatever. It's wrong, very wrong, and they should be made to account. And their coffee is rubbish anyway!

But why are people very happy to boycott Starbucks, but very happy to use Amazon all the time. I won't use either.

If the Government drag their feet closing the loopholes - we can vote with our feet and mouse. Laughable, I really see nothing to laugh about - and don't tell me we are 'all in it together' (:

but Sel I think that it is good to know which large companies are 'legally' avoiding paying taxes then individuals can vote with their custom and avoid or use as their conscience allows. I have given up Amazon,I don't use Starbucks & it is going to be tough to work out how to avoid Google! I have only just got used to being able to eat SA fruit!

I recently filled in my self-assessment tax return as a newly self-employed consultant.. I was totally honest & do not even know what 'incorporate' in tax terms means.

My £1500 tax is not going to do much to solve the national debt, but every little helps!

I agree that the tax avoidance loopholes need to be tightened up in a way that is fair but does not drive businesses away!

granjuraso imagine, you don't use these companies, they are legion, not just Starbucks, not just Amazon...many companys employs the same tactics. The ones you shop at, the ones that are integral to your life. So we need to change the laws! It's wrong on an individual level and a corporate one but whilst it's legal, they all do it. I think it's jenDurham who has a legitimate issue about the NHS and corporate involvement...so why? What stinks? This actually isn't down to the Conservatives, Labour set it up.

I feel sometimes,saddened. For all the words, for all the deeply held, legitimate, concerns - for all the good thinking people, you haven't a clue unless you understand business. A thread on here 'is Gransnet right wing'. A notable flurry of posters protesting their left wing credentials, but for what? If you don't understand the game, you're not going to win.

nanaej having got myself all fired up with my post above, your comment about SA oranges just made me laugh so much - thank you, you're wrong but you're right on another level

I realise that all is not perfect in SA and that there is huge exploitation etc by big business!
I freely admit I know nothing about global finance and corporate affairs but I do know all mainstream political parties are entwined in pacts with devils of various sorts! The current government could change things if they had the will to!

However I strongly believe that I have to live my life according to my set of values. If that means not giving my hard earned cash to particular companies that is what I do. I realise it is often pointless & ineffective in effecting change but it helps my conscience! political is personal for me!

I'd rather my apparent naivety made you laugh than cry!

It's all about knowing what's right and wrong.
I have had two businesses, and like nanaej I paid my taxes. i had an accountant to work out what I owed and what I did not.
Actually, even though I only get a pension now, I pay more than £1500 a year in tax still.
I liked the comment by the MP for Grimsby, Austin Mitchell, when he told the Starbucks man that he was either lying or an idiot.

One site I like to look at to get annoyed by these spivs is Tax Research UK. Also, Sel, it does not matter who set the system up. It matters how people use it to their advantage and the country's disadvantage.
Yes, the laws need changing but we also need to get more people fired up about what's happening.
There is another epetition online but I cannot seem to find a link to it.
It's about private providers of public services being made subject to the Freedom of Information Act.
I think there is a link on Keep our NHS Public website.
The problem is not that people do not understand about business, it's that so much is hidden. We also do not ask the right questions of businesses.
Yes, lots of other businesses might do the same as Starbucks, etc., and we do not know about them.
However, we do know that what Starbucks say is ridiculously laughable.
If they were not making any money in Britain, why do they want to open up another 300 shops?
It's not to keep their good reputation and credibility, is it?
We can do some thing about Starbucks and Amazon, and make sure they do not make any profit in this country, if that's what they say they do!

When I told my brother-in-law about Branson and the money he makes out of the NHS and sends off-shore, not paying tax on it, he was absolutely appalled. Branson had been one of his heroes, with his beard and woolly jumper.

nanaej my comment about laughing was in no way pejorative; it truely did make me laugh - I remember suffering the same way from SA oranges! Your description of political parties being entwined in pacts with the devil is accurate. That's why the naive left/right wing views are so outdated. We do need to wake up. People express views on here about the NHS, schools, care for the elderly, benefits etc - they need to be paid for. By whom?

The UK does not have massive natural resources, so where does the money come from?

jendurham I understand. You've looked into it and it all stinks. "Something is rotten in the state of Denmark" is I believe what Shakespere said. Never more true.

I understand the accounting, I understand the rationale, but it's for the government to change the law.

I just hope that Starbucks being pilloried will lead to an exposure of ALL the other companies who do exactly the same...and it's all legal.

They are paid for by taxes. That's why it's wrong for anyone involved in public companies to take money out of this country when it should go back into the public companies.
Even right wingers cannot do without water. Nobody should be making profit out of selling water. We should all stop buying bottled water, it's such a huge waste of resources.
Food. Far too much money is made by companies that bet on food prices. It's all corrupt.
We can do something about these things by looking at the provenance of food. It's obscene that Starbucks has cafes in countries where many of the population cannot get clean water to drink.
I happen to believe that there is enough food in the world for people not to go hungry if only it was shared properly.
When we lived in York, we had a guest house opposite the Rowntrees factory, which was then taken over by Nestle. Because of the baby milk powder problem I never bought Nestle products.
I used to have guests who worked at the factory living in my house. I said I would take their money but they would not have any of mine. One day Suma stopped delivering a certain type of fruit juice. They had just found out that Nestle owned the company. So I had to stop using that particular fruit juice as well. It never said so on the packaging. You could only find out on the website. They also own half of L'Oreal, so I could not use their shampoos. Trying to find out all about this is so time consuming. Why do you think Nestle do not put their name on all the products they sell?
Because there is still a boycott because they still sell Baby milk powder and kill off lots of African babies.
The same reasoning behind Branson's secrecy in the NHS. They do not want us to know what they do, and it's still legal!
It shouldn't be.
We rail against them sending their profits to tax havens, and Osborne has openly said that this country should be a tax haven for foreign companies.

Sel - on what basis have you concluded that we don't understand business? Many of us have had our own businesses and follow the business and commercial news avidly.
This is just a forum for exchange of views/information by grandparents - it is not intended to be a vehicle for campaigns, although we are sometimes given links to them which we either ignore or follow up, depending on how important/useful we think they are.
Many of us have said that we do not support the policies of any of the main parties in the UK.
I find your posts a little condescending. Perhaps you could tell us your own source of expertise and information.
You ask why the present situation is allowed to continue - in my opinion it is because of the close links between governments of all shades, business and the media. Private Eye regularly exposes corruption in both politics, local and national, and business.
(I hope this thread is not trivialised by members who do not wish to hear unpleasant truths - I hope they will allow those of us who wish to take part in serious discussions to do so - without being told we have no sense of humour.)

Countries doing business in other countries and making sure that the maximum financial benefit comes to the shareholders back home. How shocking. Isn't that how that British Empire got so rich?
Oh it took a while didn't it to stop boycotting south African fruit (incidentally SA taste the difference clementines in sainsbury's are currently really delicious!)
I think pitting moderately paid tax officials against the brilliance of international companies' tax lawyers is doomed. HMRC needs to concentrate on battles they can win.
I do agree with sel that sometimes some politicians and some others who have never worked in business don't have a very realistic view of how the world works. Sometimes (and i am not talking about Gransnet) you would think that business was the root of all evil and that all the virtue and hard work resides in the public sector). Not helped by the Arts who delight in portraying everyone in business as a villain.

Senior civil servants being allowed to declare themselves corporations and thus greatly reduce the amount of tax they pay is scandalous and something it shouldn't take any new laws to deal with.

I remember many years ago working as a freelance editor on a relatively long-term (six, seven months) project for a single publisher. Part of the way through, all freelancers had to leave because the IR had stated that if we were working exclusively for that company, albeit short term, then we would be regarded as employees and National Insurance would be payable. Neither the company nor the freelancers wanted this so we agreed to cancel our contracts.

JessM "Not helped by the Arts who delight in portraying everyone in business as a villain." Yes, I really enjoyed the opera and am looking forward to the Noh production and the new exhibition at the Tate Modern. A teeny bit of a generalisation I think.

I actually find this all very interesting and useful. I have no idea how retail or big business operate as that is not my world. I pay my taxes and is like to think, naively as it happens, that everyone else contributes too, especially big companies.
When it first came to my attention that Vodafone was not paying much tax in this country I changed my provider that was easy. Next I stopped using Starbucks and again that was easy as there's always a Costa instead. Now it's Google and Amazon so things are getting difficult.
It's wonderful that there is all this expertise on GN as it keeps me informed in a way I would not be otherwise. It will allow me to discuss this with my colleagues and contribute to the discussion from a more knowledgable standpoint.

Jodie, I agree. I'm woefully ignorant about business and appreciate learning from better informed people. Like you I've always been on PAYE and when I was asked to do some work for another university and was asked the name of my company, I was totally bewildered. Call me naive but that's how it was. I'm also totally shocked by the machinations of these companies and it's been interesting and educative to read these posts.

If we do not take personal action, e.g stop using services/products of companies we know are behaving in a way we do not like, we end up condoning them and I do not want to do that. I have a particular issue with goods produced in a certain country and try to avoid purchasing them . I know my little protest will not break the producers etc but I at least am not supporting them!

I do find it amazing that anyone would want to condone this tax 'avoidance'.
Starbucks made a profit of 398 million in the UK last year, and paid ZERO tax. Amazon raked in 3 BILLION and paid just 1.8 million. business tax if just under a quarter, at 24%. How can this be justifiable.

If we, the public, massively let them know with our feet and mouse, how we feel about this- they would have to re-consider their tactics (antics?).

Shameful.