A taxing question

Amazon paid less in UK corporation tax last year than it received in government grants, its official company accounts show.
Its corporation tax bill was just £2.44m – less than the £2.5m it received from the Scottish Government in inducements to build a new distribution warehouse in Dunfermline.

Its corporation tax bill was just £2.44m – less than the £2.5m it received from the Scottish Government in inducements to build a new distribution warehouse in Dunfermline.

Alex Salmond has previously spoken of what he described as an “historic” deal that saw Amazon set up a distribution centre in Dunfermline, alongside its customer call centre in Edinburgh.
Peter Walsh, Scottish spokesman for union Unite, warned the latest Amazon tax payments were a “drop in the ocean” compared to its vast UK sales figures. “We desperately need to look at tax reform and how to achieve tax justice,” he said. “The taxes they pay, combined with the fact they are a low-wage, low-skills employer, poses the question as to what benefit they bring to Scotland and to the UK. We have put significant public funds into luring this employer here and this is what we get back.”

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Guernsey's chief minister Lyndon Trott has been both in Washington and London trying to convince politicians Guernsey is not a tax haven but, as he puts it, "a place of low tax jurisdiction".

Income Tax - "It's not on "

"...completely unjust...Some people are talking about taking this to the European court of human rights." - What's got some people so het up ? Torture ? Exploitation ? Censorship ?Oppression ?

No - the tax-man is planning to to make life harder for the 2,000 British millionaires who call Monaco, the tax haven , home. The Guardian reports :-

Until now, tax rules that allow "non-residents" 90 days a year in Britain have contained a crucial loophole: the taxman has not counted "travel days" entering and leaving the country, allowing businesspeople to commute in on a Monday, leave on Wednesday, and claim to have spent just one day in the UK.It has in effect allowed Britons to spend most of the year - up to 270 days - working in Britain, while claiming to be residents of tax havens such as Monaco and to avoid paying tax. That will change under a stricter enforcement of the rules to be unveiled today which has unnerved tax lawyers serving Britons in several tax havens.
The change - likely to count travel days or overnight stays in the residency total - will particularly affect the so-called "Monaco mob", millionaire City workers whose commute entails a seven-minute helicopter ride from Monaco to Nice for a connecting flight to London, often by private jet, before a swift return to the Riviera.

"It's not just tax - it's about lifestyle. The streets are immaculate, there's no crime. You can have breakfast on your terrace, go skiing in the morning, and be back to the beach for the afternoon. I don't know a single person going back. They'll change their lifestyles - it's a nuisance - but they'll get round it."
The night for many "in-crowd" expatriates begins at the Bar Américain, with its Bentleys and Rolls Royces parked outside. The same faces dine in one of the two Michelin-starred restaurants in the Hôtel de Paris, and end the night in Jimmy'z, a nightclub where two shots cost €40 (£30)Another feature of the local nightlife is the well-dressed prostitutes with forced smiles who, more than one British resident admitted, are what "some of us spend our money on".

Roger Munns, who runs two property businesses for Monaco multimillionaires said "These people are quick thinkers. They can move quicker than the government" Those unwilling to change their commuting patterns, he said, were restructuring their companies to funnel money into their spouses' Monaco bank accounts.
A group of City bankers, speaking on condition of anonymity, confirmed they would "play the rules" to find a way to continue spending time at their desks in London while maintaining non-residency status and paying zero income tax.

"Most of these people running businesses and living in Monaco had got the whole system worked out - and it worked just fine," said Damian, a middle-aged "retiring accountant" and long-time Monaco resident. "And now the Treasury has moved the goalposts. It's not on."

It is an injustice , it is , isn't it ?

Tesco move to the Cayman Islands

Tesco has created an elaborate corporate structure involving offshore tax havens which enables it to avoid paying what could be up to £1bn of tax on profits from the sale of its UK properties. The complex new structures uncovered by a six-month Guardian investigation include a string of Cayman Island companies. These are being used by the supermarket giant as it proceeds with its announced programme to sell and lease back £6bn worth of its UK stores.
The stores are being sold to external investors providing Tesco with a big one-off gain which, ordinarily, would be liable to tax, while allowing it to remain in the stores and pay rent to the new owners. The first two deals, worth £445m and £650m, have already used the companies set up in the Cayman Islands - where the rate of corporation tax is zero - allowing Tesco to avoid tax on about £500m profit. Large corporations are increasingly developing strategies to cut tax bills and Tesco is not alone in its tax planning.
The Guardian's analysis of Tesco's accounts over the past five years also shows that the company has paid an effective tax rate of just over 20% on the rest of its profits, at a time when the UK corporation tax rate is 30%.

The investigation has found:
· New company structures set up by Tesco to own stores that are being sold and leased back mean that 99.9% of the company that owns the stores could end up being held offshore. Tesco would be liable to pay UK tax on only the 0.1% of its profit on the sale of the stores held in the UK. Tesco's first two property deals, worth about £1bn, have used this structure and will avoid tax on £500m of profits.
· Although its accounts for the past five years report an average rate of corporation tax of 29%, the actual rate of tax Tesco paid, according to its cash flow statement, is closer to 20%. This is on profits separate from the property deals. UK corporation tax is 30%.
· Tesco has sold its 37 stores in the first two sale and leaseback deals at twice the book value that is included in its accounts, making a profit of about £500m on the £1bn of stores sold. If it achieves the same rate of return on all its disposals as expected, its share of profits from property sales would come to about £3bn. The UK corporation tax due on this would be as high as £1bn, but the retailer could avoid paying this because of its offshore structure.
· A string of other company structures leading to the Cayman Islands have been set up and more of Tesco's properties have already been transferred to them so that they could be quickly activated for the next tranche of store sales.

Tesco Red (GP), which acted as general partner in the £445 million sale-and-leaseback partnership with the British Airways pension funds did indeed pay UK tax on its share of income from ongoing business after the deal. Tesco Red (GP)'s UK income for the period to February 28 2007 was just a measly £832 and its UK tax bill was £494.

Tesco claim since they pay corporation tax, business rates, employer's national insurance contributions and other taxes. Combined with the approximately £750m of PAYE tax, employee's NIC and net VAT that we collected in that financial year, this means they are in the top 10 taxpayers in the UK. We wonder how their rival supermarkets and competitors feel - or are they up to the same tax avoidance [ tax avoidance rather than tax evasion or tax cheating, of course ]



Nearly a third of the UK's 700 largest businesses paid no corporation tax in the year 2005-6. A further third paid less than £10m each, according to figures from the National Audit Office released last year.

Tax Fraudsters

THE tiny principality of Liechtenstein is one of three countries to be blacklisted by the OECD for failure to co-operate with a clampdown on tax avoidance.With a population of around 35,000, Liechtenstein has a banking system shrouded in secrecy.The OECD named it, along with Monaco and Andorra, as a country that could do more to clean up its tax laws. It has also been accused of condoning money laundering, and tax evasion.Non-residents can set up a foundation, allowing them to avoid taxes. Foundations also minimise requirements to file returns or accounts and guarantee anonymity for the investor.There is no need to keep accounts or submit financial statements if the foundation does no business or trade. If the foundation qualifies as an offshore company, it is not subject to income tax or capital gains tax in Liechtenstein. The only requirement is to maintain an "office" in Liechtenstein, but this can be a mailing address.

THE identities of wealthy British tax evaders will be kept secret, even though UK tax authorities now have access to their details, it emerged yesterday. HM Revenue and Customs has admitted it has details of about 100 Britons who evade an estimated £100 million in taxes through Liechtenstein. The names will only be unveiled in the improbable event of a criminal prosecution. A spokesman for HMRC admitted this was "highly unlikely", because it was so difficult to prove tax evasion in court and it would cost taxpayers too much to pursue a trial. Of an estimated 130,000 inquiries into alleged tax fraud last year, only a "handful" ended up in criminal trials.

Not quite the same zeal the State puts in when it comes to hounding those of the working class who may be claiming a little more than the rules and regulations of the so-called welfare system .