Tuesday, 11th December 2012
TAX AVOIDANCE IN THE UK - There has been an awful lot in the news lately about foreign owned companies, such as Starbucks, Amazon and Google, who are using loopholes in the UK and European Tax Laws in order to avoid paying tax on their profits, through their UK and European operations.
Note carefully that the term used is “TAX AVOIDANCE” and not “TAX EVASION”. The two are completely different where Tax Avoidance is perfectly legal while Tax Evasion is illegal.
The UK and European Governments have, along with the media, targeting companies, such as Starbucks, Amazon and Google for what it deems as immortal avoidance on taxes due by filtering profits through shell companies and setting up off-shore, or into countries, such as Bermuda and the Seychelles, in order to avoid paying tax on the UK and European operations.
What amazes me is that the media and the respective governments have the gall to call this immoral. These are companies and the goal of any company is to keep its shareholders happy. The idea of any company is to make money so that it covers its operational expenses, covers expansion plans and research and development and of course provides its shareholders with an income from their investment. It is the basic principle of any company to avoid paying any cash where it could be used internally or for keeping its shareholders content. So if this practice, of making money, is immoral then in accordance with the media and the UK and European Government no business should be operational for the purpose of profit.
I can’t say I am a fan of Google, Starbucks or Amazon, however I am a staunch capitalist and strong believe that without these companies making a profit then employment and other benefits these companies bring to foreign countries would not exist.
On the other side of the coin, and in my view as a small business owner, why, if I and others can avoid paying tax legally, should we not do so? In fact, when it comes to a company that has shareholders they do have an obligation to make a profit – wouldn’t be much good if they didn’t.
Let’s take this a step further… Think about this scenario: If the likes of Google was to pay a billion pounds sterling in taxes what would happen to that money? Well the truth is 99% will probably be wasted. Firstly the Government would plough the money into the fight against terrorism only to allow known terrorist to reside within their border, because their very own laws prevent them from deporting them – and how much action is taken against them? Very little – so it’s fine to keep terrorists in the country killing our citizens but if a company engages in tax avoidance then they are the devil reincarnate.
Apart from that fact more money is going to be wasted on supporting all the scroungers that can’t be bothered to work and are happy to live off the state. Finally you these companies might take the view that this money will go towards paying Government salaries, which are extremely over inflated and where far too much corruption goes on to make it morally correct to pay tax.
Seriously, before you get on your high-horse and start pointing the finger and saying that the tax avoidance by these companies is despicable, you might want to stand back as ask yourself why tax avoidance is allowed in the first place. Remember that Government is run by an “Old Boys Network” with many government officials having seats on boards of very large companies – this tax avoidance system was set-up by the government initially to allow their cronies the opportunity to get fat at the expense of the average hard working taxpaying citizen.
If you think for one moment that the Government or the Media has the right to point the finger then you might want to look a little closer at the way many government ministers profit from the taxpayer and how the media profits from tax avoidance, maybe not on the same scale as Google, Amazon or Starbucks but they still engage in tax avoidance practices for the benefit of the company, themselves and their shareholders.
I dare any government official or media agency to deny this and let them cast the first stone. Just because these are Foreign owned companies does NOT give the government or the media the right to point the finger for a practice that they are also involved in.