The Institute of Chartered Accountants in England and Wales has attacke the recent tax break for orchestras as ‘cultural snobbery’. It said the relief would be exploited by tax avoiders in much same way as film tax havens.
Nice guys. More in the FT here.
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Sir Humphrey: [calmly] Bernard, subsidy is for art, for culture. [almost furiously] It is not to be given to what the people want! It is for what the people don’t want but ought to have!
Accountants….hmmm… aren’t these the girls and guys that help big Multinationals to evade paying tax in the UK by using any imaginable and unimaginable loophole in the system ?
( Starbucks eg paid 8.6 million pounds tax in the UK on 3 billion pound sales in 2012 ).
My willingness to listen to the representatives of such practice is somewhat limited.
@ Michael – careful how you go. Evade, no, absolutely not. Avoid, possibly, depending on your point of view. But Starbucks, not really guilty of either. Starbucks don’t make the double-taxation treaties, nor do they insist (as the EU does) that subsidiaries paying for brand use, coffee beans, and more MUST be treated and charged as ‘arms length’ transactions. No loophole here; it’s how the system is deliberately designed. Likewise Amazon, who don’t make the rules about what does or does not constitute a domicile. Talk to the law-makers.
I guess with the same technical argument you can excuse the bankers which
caused the last financial crisis .
Wrecking whole economies out of limitless greed and unethical selling practices,
they had their accountants and lawyers who advised them and they knew the law
and acted mostly within it.
On a purely personal level I will certainly not ”be careful” about voicing my opposition to this gangster style hotpot of irresponsible and corrupt poltics and their business equivalents .
Michael, that’s rather sweeping. All I’m saying is that if a company follows the law quite clearly, it’s a bit much to claim it’s doing something wrong. There are plenty of dodgy dealings we could call in to question, so why focus on the ones that are totally above board just because a household name suits a campaign?
As an example, Amazon in the UK rightly pays tax in Luxembourg. The double taxation treaty signed between the UK and Lux (in the 60’s, I think, so a Labour government in the UK – you can’t blame the Tories for this one) is not vague, it is very clear. It is clear that there should be ONE domicile for the company, and that is where it is taxed. It is further clear that warehousing, distribution and logistics do NOT count as a “domicile”, and that the brass-plate of head office does. It is thus incumbent upon Amazon to pay tax in Lux where it is legally domiciled, and not in the UK, where it is not.
Amazon don’t exist when that treaty was written, so you can’t accuse it of corporate greed and lobbying to have the law made, insider dealing with politicians, or anything else. It follows the law as it is, and if you don’t like that, you can’t blame the company for doing what they are supposed to do.
(Aside from that, of course VAT, employers NI, and income tax from employees IS paid in the UK, so they are hardly not contributing – to only look at one of the forms of taxation as corporation tax is deliberately misleading in any case)
This is not a loophole. It’s not a special industry-specific exemption. It’s how the system is deliberately and intentionally designed.
You want me to accept that there is nothing wrong with banks wrecking whole economies and the lives of millions of ordinary people ?
Many of the products banks have sold before the last crisis were highly artifially designed, with the sole intention to disguise the risks within them.This has been well documented.All within the law.
The same goes for mortgage sales that were clearly unethical ,as the income of the buyer was not sufficient to service such a loan.
But these risks got ‘repackaged’ and again sold on for more profit.All within the law.
The banks operated under such schemes for quite some years and are doing it again as we are speaking due to the inability of politicians to curb such excesses.
That is gangsterism for me, and the purely formal criteria of ”following the law” is irrelevant when looking at the consequences.
”The law” may need changing.
The ICAEW advising on ‘cultural snobbery’ now?
I don’t go to the LSO for tax advice. The rest is obvious.
Er, no. That’ll be the ICAEW advising on potential mis-use of what they see as a tax loophole. Very much their area, no?
If the ICAEW used the term ‘cultural snobbery’, they are not confining themselves to the potential misuse of tax law. They are straying into territory in which, IMO, they have no expertise whatsoever.
And BTW, the infantile use of “Er, no” does not shore up your argument.
Bet they’d support tax breaks for accountants. Akin to Mr. Gilbert’s gondoliers, they want a state that will make everything cheaper–except gondolas.
I’d wager they’d welcome a tax break for accountants. Akin to Mr. Gilbert’s gondoliers, they love a State that will make everything cheaper–except gondolas.
The ICAEW should keep its fake egalitarianism to itself…..
Have to laugh at the ICAEW’s hypocrisy. I worked for many years at the head office of a large UK plc. I was invited out on many occasions by accountancy firms either acting as our auditors, or hoping to sell us tax advice or some other specialised service.
I don’t recall any invitations to McDonald’s, dog racing, darts matches or pub crawls. Every invitation was to something which could be viewed as ‘elitist’, if you want to judge things that way. Champagne was freely available more often than not.
On the subject of tax avoidance, I think a distinction should be drawn between schemes which acknowledge the global nature of trade to ensure that tax is paid once, and highly artificial schemes which shift the tax liability to a territory where nothing is actually done in practice, and little or no tax is actually charged.