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spygirl

Tax

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Just been reading an article about a Franco German initiative to bring in a turnover tax.

https://www.ft.com/content/371733e8-94ae-11e7-bdfa-eda243196c2c

Targetting likes of airbnb basically companies that for various reasons dont make a profit and whose presense in a company is a few servers in a data centre i.e not 1000s of employees.

Youd gave thought that the vast rench public sector could pull its finger out and create a better tax codr. Maybe they need to start sacking french cuvil servants...

Or they could start cracking down in dodgy EU members like luxemberg. Shoukd not ve hard, just chat to junker and the next euro shindig.

Then i read this

http://www.dailymail.co.uk/news/article-4867594/Richard-Branson-s-son-evokes-spirit-Dunkirk.html

Apparently they need aid. If only the caribbean had loads of rich people paying fuckall tax then thry might develop a tax base.

 

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10 minutes ago, sarahbell said:

So a turnover tax would affect places like amazon and starbucks who claim not to make any profit, yet suck billions of quids in each week?

Yes,  but would also bankrupt any company operating on thin margins and low profits..  though I guess you could argue if they aren't making much money it isn't a very valuable business anyway.

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12 minutes ago, sarahbell said:

So a turnover tax would affect places like amazon and starbucks who claim not to make any profit, yet suck billions of quids in each week?

Yep.

Theres no doubt that the system needs some work. But countries and groups have are far bigger than companies.

Tax system mess is down to lazy, useless governments. And cunts like Junker.

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29 minutes ago, Libspero said:

Yes,  but would also bankrupt any company operating on thin margins and low profits..  though I guess you could argue if they aren't making much money it isn't a very valuable business anyway.

There are thin margins and then there are low profits because you're good at having other companies to do things as part of your business.
 

15 minutes ago, Libspero said:

I guess in a way it would work a bit like an extra layer of VAT.

The argument then would probably be that companies with large profits weren't paying their fair share of tax.

Like a sales tax?

How much would 10% of every coffee sold in the UK bring in?

Edited by sarahbell

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29 minutes ago, Libspero said:

Yes,  but would also bankrupt any company operating on thin margins and low profits..  though I guess you could argue if they aren't making much money it isn't a very valuable business anyway.

Doubt it would bankrupt Amazon. They aren't running at "zero profit" because it isn't profitable, they're doing it to minimize tax obligations. In reality they have billions of dollars in untaxed reserves, you only need to look at what they spend on buying other companies for cash rather than leveraged for proof.

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Funny though.  If they had a general 'turnover + profit' tax that worked out neutral for the 'average' company, then I'd do okay with it as I run high margin businesses*.  Acutally, it looks like it could be a fantastic way to decrease taxes on 'expensive' businesses (you know, like the sort of tax consultancies and legal services that politicians run) while increasing taxes on marginal businesses (like, you know, poor people run).

As an aside, this sort of approach to tax could absolutely kill the BTL-as-a-business-model (because the high gearing effectively gives a tiny margin].

[it also kills the highly geared hedge fund company, but that is a different story.]

[just to go through the sums, assume the new tax is 10% of profit (half what it is now) plus 1% of turnover (ie assuming 20% corporation tax on an 'average' 10% margin business, halved so that you get equal weighting from profit and turnover).  So a hypothetical £100k business pays

Now (well, at 20% corp tax):

  • ¬£0k if no profit
  • ¬£2k if based on 10% margin
  • ¬£10K if¬†based on 50% margin

10% profit + 1% turnover:

  • ¬£1k if no profit
  • ¬£2k if based on 10% margin (¬£1k profit, ¬£1k turnover)
  • ¬£6k if based on 50% margin (5K profit, ¬£1k turnover).]

 

Edited by dgul

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3 minutes ago, spunko2010 said:

Doubt it would bankrupt Amazon. They aren't running at "zero profit" because it isn't profitable, they're doing it to minimize tax obligations. In reality they have billions of dollars in untaxed reserves, you only need to look at what they spend on buying other companies for cash rather than leveraged for proof.

Nope.

Afaik They buy companies by raising debt.

One day amazon will implode. Or raise prices.

I never buy stuff from amazon with out checking elsewhere.

I do have a kindle, which is great. And i do buy some ebooks, mainky tech. £15 for an ebook is a good deal esp. If uts not a book ill keep.

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1 minute ago, spygirl said:

Quid!!!

I get my takeout coffee from maccyDs. It is a quid there.

Costa starbucks is £3!

At least.  They have removed all the coffee bars, run by either the university or SU at my place. And replaced them by Costa lot.  I don't buy coffee at work.  

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Costa coffee isn't that nice, in fact none of the big chains are IMO. £2.85 for a large coffee round here. WTF.

I get mine from Waitrose, they use their own beans and it's a half-decent cup, and 'free'.

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I've been thinking for a while now that a sales revenue tax rather than profit tax was the only way to stop multinationals taking the piss, it's good to see it being raised as a possiblity outside of my own mind.

and yes, even companies making a loss would still be liable, just as they would be for any other tax, also they couldn't use previous years losses to offset future sales revenue tax either.

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2 minutes ago, snagger said:

I've been thinking for a while now that a sales revenue tax rather than profit tax was the only way to stop multinationals taking the piss, it's good to see it being raised as a possiblity outside of my own mind.

and yes, even companies making a loss would still be liable, just as they would be for any other tax, also they couldn't use previous years losses to offset future sales revenue tax either.

I'm not sure how this would work for a lot of businesses, particularly those that have high turnover/low profit. For example a company turning over £200m but only making £2m profit (with no dodgy accounting practices) would be paying a hell of a lot in tax more than a company with a £5m turnover and 80% profit... Not really fair.

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9 minutes ago, spunko2010 said:

Apple a d googke lierally do have billions of prifit gushing out of their ears. Apples margins for a mass market business are phenomenal.

Amazon, nah.

11 minutes ago, One percent said:

At least.  They have removed all the coffee bars, run by either the university or SU at my place. And replaced them by Costa lot.  I don't buy coffee at work.  

Costa are everywhere. Its a fucking joke. I expect a branch in the local toilets.

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5 minutes ago, spunko2010 said:

I'm not sure how this would work for a lot of businesses, particularly those that have high turnover/low profit. For example a company turning over £200m but only making £2m profit (with no dodgy accounting practices) would be paying a hell of a lot in tax more than a company with a £5m turnover and 80% profit... Not really fair.

it would need some refining for sure, you could continue taxing SMEs via profit, and only the big boys on sales revenue.

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13 minutes ago, dgul said:

Funny though.  If they had a general 'turnover + profit' tax that worked out neutral for the 'average' company, then I'd do okay with it as I run high margin businesses*.  Acutally, it looks like it could be a fantastic way to decrease taxes on 'expensive' businesses (you know, like the sort of tax consultancies and legal services that politicians run) while increasing taxes on marginal businesses (like, you know, poor people run).

As an aside, this sort of approach to tax could absolutely kill the BTL-as-a-business-model (because the high gearing effectively gives a tiny margin].

[it also kills the highly geared hedge fund company, but that is a different story.]

[just to go through the sums, assume the new tax is 10% of profit (half what it is now) plus 1% of turnover (ie assuming 20% corporation tax on an 'average' 10% margin business, halved so that you get equal weighting from profit and turnover).  So a hypothetical £100k business pays

Now (well, at 20% corp tax):

  • ¬£0k if no profit
  • ¬£2k if based on 10% margin
  • ¬£10K if¬†based on 50% margin

10% profit + 1% turnover:

  • ¬£1k if no profit
  • ¬£2k if based on 10% margin (¬£1k profit, ¬£1k turnover)
  • ¬£6k if based on 50% margin (5K profit, ¬£1k turnover).]

 

Basel are belatedly looking at cranking down le erage, or pricing leverage into into capital charges.

Fucking nuts is io btl lending. These are commercial bridging loans and should be charged at 10%+. Banks and small building societies should not be touching the business.

Anyhow, the s24 changes has fucked io btl over. Better late than never.

 

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55 minutes ago, sarahbell said:

Like a sales tax?

Well, broadly I can't see very much difference between this and increasing VAT to, say, 30-40%. But raising VAT would be unpopular so they're just giving it a different name. Admittedly company to company sales are usually VAT free so that would be slightly different... but the only way VAT wouldn't ultimately be paid would be if the end product was exported or exempt. So it would be a way of giving tax breaks for exports too which might not be a terrible thing to encourage.

53 minutes ago, spunko2010 said:

Doubt it would bankrupt Amazon. 

It is clear who this legislation would be aimed at..  in Amazon's case it would depend how much they really make and how much profit is just "offshored".

If they really do run very slender margins which are made up for by phenomenal turnover,  then yes,  I guess it could drive them out of a country with such tax laws.

I think my concern wouldn't be so much the Amazons and Starbucks of this world..  it's more how this might affect "mom and pop" businesses as collateral damage. 

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4 hours ago, spunko2010 said:

It would if the link wasn't behind a paywall :Jumping:

It wouldn't let me paste a line from it.
But I googled how many cups of coffee sold in UK

4 hours ago, spygirl said:

Quid!!!

I get my takeout coffee from maccyDs. It is a quid there.

Costa starbucks is £3!

I don't buy coffee out so estimated how much a cup might cost.

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