Eric Schmidt has defended paying just £6m in UK corporation tax.

http://www.bbc.co.uk/news/business-22245770

by groundCode • 13 years ago

7 17 13 years ago

bbc.co.uk

petercooper2• 13 years ago

As a British taxpayer, if it's legal, I don't see the problem. If our government (i.e. the "tax man") wants to make a deal out of it, perhaps they can get to passing some sane tax laws or just tell the truth and explain these situations have come about primarily due to EU tax regulations we can't get out of (although that would play right into UKIP's hands.. aha!)

Gmo• 13 years ago

You know that the current EU tax regulations have the UK as one of their major backers ?

I'm really sick of always hearing everybody (and the British in particular) blame everything on the EU.

petercooper2• 13 years ago

Which is why the British government shouldn't spend so much time whining about how Google, Amazon, Starbucks, etc, "aren't paying enough taxes" when it's the EU laws they backed that enable their behavior.

Personally I do blame EU regulations for this situation, but the British government is worse in being hypocritical by supporting certain laws and regulations while being unhappy with their consequences.

fennecfoxen• 13 years ago

EXACTLY. If you want all the taxes, make laws that exact all the taxes: don't just make laws that exacts some of the taxes, and then whine when people find ways to obey it that don't result in as much revenue as you'd like. Only don't be surprised when people respond to the tax by changing their behavior (possibly by moving their operations outside of your jurisdiction).

Oh, and another thing. Could we begin to assume that when you make money, it's your money first, and that (absent actual lawbreaking) it's not some sort of theft from the Glorious People's Republic if you actually keep it instead of giving it to Fearless Leader and his bureaucracy to distribute? Yeah I know, bridge too far, but a body can dream...

blowski• 13 years ago

The way some people seem to see this is "Google contributes merely £6 million to the UK economy", which is obviously not true.

Like individuals, corporations want to pay the least possible tax. If they're paying the legal minimum, what's the problem? If the British people want them to pay more tax, then elect a government which would change the tax law. At the moment, we're electing a government which hisses at corporations to make good headlines.

bengillies• 13 years ago

Is that even possible though? i.e. is there a party that has pledged to change the tax law to eliminate this sort of loophole?

DanBC2• 13 years ago

There's tax evasion, which is clearly illegal. There's tax avoidance, which is clearly legal, and is what everyone should be doing.

Google are in a weird middle ground. They're obeying the letter of the current law, but certainly not the spirit. 'Be careful with incentives' comes into play here; the UK government incentivises with some tax breaks, and so obviously some companies exploit that.

Google is stupid when they mention PAYE. That's not a tax that they pay, it is a tax that their employees pay. Pointing out that the little people pay their tax while the big company doesn't is really awful PR. Starbuck is stupid when they point out all the VAT. Again, that's a tax paid by the customer, and not Amazon.

And tax avoidance is against Google's best interest. They want smart, well educated, workers. Pay the tax and fund the education system.

Perhaps it's a cultural thing? In the US when someone makes a lot of money people tend to think "The American way, well done them" etc. Over here? Not so much. It's a lot better than it was, but we've had ridiculously high tax rates in this country. The highest rate was over 99% during WWII. But it was 90% for most of the 50s and 60s.

(https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom)

While we're going through austerity we're going to be vociferous when we find people not joining in, not doing their bit, not pulling their weight.

Google really needs to work out some better PR. Hopefully along the lines of "Our tax avoidance was a bit extreme, and we're dialling that back a bit so we pay more tax in the UK. Also, here's some stuff for schools, hope it's useful."

OGinparadise2• 13 years ago

Eric Schmidt has defended paying just £6m in UK corporation tax.

If they didn't pay what was required of them legally take them to court. Otherwise STFU, they paid their dues. Change the law if you don't like it

summerdown2• 13 years ago

I apologise if you aren't American and I'm simply making sweeping generalisations innacurately, but this seems to be a very common response I see from Americans - the idea that in any situation there are only two responses ... do it or do nothing.

In actual fact, the UK government is quite at liberty to:

a) Take them to court,

b) STFU

or anything else in between, including

c) Start a debate about it.

I've seen the same line of argument a lot in debates around personal data used by companies, too: the idea that people should either a) accept whatever a company wants to do, or b) not use their services. It seems weird to me to imagine that people or governments are somehow no longer at liberty to complain and use peer pressure to get what they want as well as to use other routes.

OGinparadise2• 13 years ago

Peer pressure in this case is useless. Google, more or less, is bound by law not to pay taxes that can be avoided.

Say Google handed UK a check for $100 million in 'extra' taxes. is that enough? Why not pay $500 million?

KMag• 13 years ago

In this case, perhaps there are a couple of factors. First, for many Americans, it's very against their sense of fairness to apply unwritten rules, especially after the fact. I'm not sure about other places, but the U.S. has a long history of unwritten conventions being applied unevenly to the detriment of less powerful groups within society. The U.S. also has had to deal a fair amount with multiple cultures living near each other in a single society, and the convention has become that unless cultural expectations become codified in the laws by which we have all (by proxy) agreed to live by, it's very rude to try to force your cultural norms on someone's behavior without at least campaigning to get those norms codified in law so they are uniformly applied. To many Americans, there's the sneaking suspicion that standards are being unequally applied if someone is being to be asked to go beyond what the law requires if there isn't simultaneously a strong push to codify these unwritten expectations in law.

The second factor is perhaps the American cultural bias towards individualism, distrust of government, "go big or go home", and a tendency to view theory as only a means to an end (application). "Why theorize about what should be done if your aim is not to change the laws that govern all of us?" Most Americans don't view governments as worthy recipients (or good stewards) of voluntary donations, and view any non-mandatory taxes paid as donations.

gonvaled• 13 years ago

If Google is complying with the law, and if the public perception is that Google is paying too little taxes, then the public should push for a law change.

It is not Google's task to pay taxes. Google's task is to comply with the law. Without putting itself at a disadvantage compared to their competitors.

Obviously, since we are talking about international issues here, there must be some kind of international agreement for changes in the law to have any kind of effect. But, as we have seen in recent cases regarding european fiscal matters, (or banking regulation, or executive pay, or, or ...) Britain opposes any kind of agreements in international taxation issues.

dazzawazza• 13 years ago

I'm really torn by articles like this.

On the one hand Google benifits massively from our education, university, health and infrastructure spending. All of which is paid for through taxation and all of which isn't perfect and more money would help.

On the other hand, Google employs a lot of people and pays them well, it sponsers a lot of community efforts and just having their knowledge pool in the UK should spin off a number of projects employing more etc. They bring a lot to the table.

My gut feeling is that the UK is at a net loss but things like this are very hard to quantify and I would not like google to leave the UK even though I'd personally never work there.

akilism• 13 years ago

Shouldn't everyone pay their fair share? Google is using public resources but then shifting profits around to other countries that have a 0% effective corporate tax rate through shady accounting practices and just falling behind the defense that "This is how all multinational companies do their taxes." What happened to "Don't be evil"? Just because something is legal doesn't make it right.

http://www.forbes.com/sites/kenrapoza/2013/03/15/what-money-...

http://www.bloomberg.com/news/2012-12-10/google-revenues-she...

http://www.huffingtonpost.com/2012/12/13/google-tax-dodge_n_...

DanBC2• 13 years ago

There's some interesting dissonance on HN.

Taxes - "They're obeying the law; what's the problem?"

Patents - "They're obeying the law, but the laws are stupid."

sarvinc• 13 years ago

I'm not sure I follow. These two things would have to be equal to each other, or the same in some fashion. Of course I excluding the fact that both have laws that pertain to them.

askimto• 13 years ago

Companies pay their taxes until they become big enough to figure out how to avoid them. Problem?

Eric Schmidt has defended paying just £6m in UK corporation tax.

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