Period Carbon Monoxide

[Penners]

Not me. Not in Starbucks, anyway.

 

[Flyfisher]

As regards corporations paying minimal amounts, it may be morally offensive, but what needs to be corrected is the legislation that enables it to be legal.

Or it may not be morally offensive . . . the tax system is ridiculously complex so how are we supposed to second-guess what taxes government thinks we, or corporations, ought to be paying? Surely the law can be the only absolute guideline?

How about someone who chooses to only work 4 days per week because the 5th day would put them into the 40% tax bracket, meaning that (with NI) that extra day will be taxed at over 50% so they deem it not worthwhile. That's 'tax avoidance' isn't it?

 

[Flyfisher]

I realised that the sensors only last for about 5 years before they need replacing, which would likely require a qualified person to do the job at a much greater cost that the £30 cost of a detector/alarm.

The price of electronic CO alarms has come down substantially, recently, FF. I've just bought a new Kidde one for only £15.

http://www.argos.co.uk/static/Product/partNumber/7001617.htm?CMPID=GS001&_%24ja%3Dkw%3A{keyword}%7Ccgn%3Apla%7C%7C7001617%7Ctsid%3A11677%7Ccn%3Apla%7C%7C7001617%7Cmt%3A{MatchType}%7Ccrid%3A14542145259)

Wow, what a difference a couple of years can make. That's exactly the same CO alarm I bought for £30.

Thanks for pointing that out - even less of a reason for having one in the house!

 

[Jellyfire]

Make no mistake, we each pay more in cuts and taxes because these large corporations pay less.

That may be true, but who do you think is going to pay for any additional taxes these companies may eventually cough up?

The shareholders! If they put it onto their prices the customer would simply go elsewhere. Thats partly how amazon can afford to undercut every other bookseller, and force many of them out of business

 

[Flyfisher]

But that doesn't really make sense does it? If you're suggesting that such companies can only afford to undercut by paying less tax, then forcing them to pay more tax will only increase their cost base up to the level of their competitors, so why would that cause a mass defection of their customers?

But even if it did, those customers can only defect to higher-priced competitors, so the consumer still ends up paying more . . . which was my basic point.

Governments and companies don't have any money of their own, they get it from us, so asking them to pay more tax just means we all have to pay more.

 

[Jellyfire]

Well not necessarily, maybe I shouldn't have included Amazon undercutting into my point as that is a different issue really and I'm clouding my argument, but on a very simplistic level, amazon and Starbucks both make huge profits in global terms. If you take as an example Pret and HMV.com as competitors in the UK, if Starbucks increased their coffee price to claw back the tax money they would be paying rather than taking it out of their profits, consumers would just go to Pret for their coffee. Likewise if amazon were more expensive than Hmv, they would lose one of their key advantages in the market. In ordinary business terms then I agree that prices would go up and consumers would foot the bill if taxes increased, but in this instance, the companies were talking about are not trading on equal terms with their competitors, so, if they increased their prices they would lose market share, as their competitors wouldn't need to. So the only option for them in that instance would be to take that tax liability off their profits, which is what they should in theory be doing anyway, like most of the companies in the country do.

I don't particularly blame them for exploiting the loopholes, that's what good accountants are for, but in the absence of legislation stopping them, the only thing that will make them pay their share of corporation tax is the prospect of losing market share or customers.

 

[Flyfisher]

Depends what you mean my 'massive' profits I suppose. It always makes me smile when people get upset about huge companies making millions in profit without actually considering things like return on capital.

What about a company that makes large gross profits but chooses to invest those profits in new outlets, thus increasing its costs and so reducing net profits and thus its tax liability? Indeed a successfully expanding company could operate for decades this way without making a net profit and thus 'avoid' tax.

Would this be a bad thing, given all the new jobs being created in all the new outlets? What about all the taxes being paid by all those new employees, not to mention all the employer NI and business rates? Tax those companies more and they might well decide not to bother investing.

And never mind big companies, what about small companies where the owners can choose how much profit the company makes by adjusting how much salary they pay themselves versus how much profit the company makes?

Probably getting too heavy for the season of goodwill though. :wink:

 

[Penners]

Thank goodness for the voice of reason, FF. I get so very tired of ill-informed criticism of the profit (which seems to have become a dirty word) motive. The news media love nothing more than a sensationalist headline along the lines of "Company XYZ made profits of £128 a second, in their last year of trading" - with the word "obscene" frequently accompanying the report. No mention is made of the proportion of turnover that the profit figure represents, nor of return on the capital invested.

We live in a free, capitalist market. A supplier is free to charge whatever he sees fit for his products (subject only to watchdogs in quasi-monopoly situations) and we are free to choose whether we wish to buy that product. We can make our purchase decision based on whatever criteria we wish - cost, quality, business practices... the choice is ours. If enough consumers shun a company's products (for whatever reason) then the company can choose to change any or all of those criteria... or go out of business. So, if you dislike a company for any reason whatsoever, just use your democratic right to buy elsewhere. If enough consumers join you, you can bet the company will pretty soon change its ways.

Like it or not, the huge majority of us depend upon profit. Indeed, the majority of us make profits. If your salary is £25k and your outgoings are £23k, do you go to your employer and ask for a £2k cut in salary? Hell, no! You invest the extra cash in an improved lifestyle.

A company is created by its shareholders, who risk their capital in setting it up. In return, they receive a share of the profits - which they invest in an improved lifestyle.

Profit is the very cornerstone of our economic system. So let's treat it with a bit more respect.

 

[Jellyfire]

Season of goodwill? Bah humbug! I'm confined to bed so could argue at (excessive) length all day about it to alleviate the boredom, so you're probably right we should curtail it here. There are myriad arguments for both sides, and probably no right one anyway :?

Weve also drifted off topic on a thread which is far more important than this, so everbody get a carbon monoxide detector, wherever it may be from!

EDIT: Penners has waded in whilst I was typing up my withdrawal! In mitigation I did say all along I fully understand those exploiting the loopholes, and I personally am boycotting them as I think it's the best way to encourage them to pay a more accurate amount of corporation tax. I have nothing whatsoever against companies making large profits, but I think that a proportion of that profit should be paid in tax.

 

[Penners]

Just make sure that the supplier isn't making a filthy profit.

:wink:

 

[Jellyfire]

Just make sure that the supplier isn't making a filthy profit.

:wink:

See my edit above, a little unfair to suggest any of my comments imply I have any objection to companies making large profits :?

 

[robgil]

If we are going to boycott 'tax avoiders' if thats a correct term for someone doing nothing wrong then we may as well boycot the corner shop , the local trades men, the TV channels, the government, the royal family and every other tom dick and harry who pays tax because everyone is at it.

I think we should boycott the tax system instead. If we all stopped paying tax for just one day the tax office would sit up and pay attention.

I have more of a problem with large company's paying people minimum wage when they turn over millions in profit , or companys using foreign work houses to get their products onto UK shelves with minimal outlay for their labour.

I would rather buy Clarkes shoes than Adidas for instance.

 

[worms]

What about a company that makes large gross profits but chooses to invest those profits in new outlets, thus increasing its costs and so reducing net profits and thus its tax liability? Indeed a successfully expanding company could operate for decades this way without making a net profit and thus 'avoid' tax.

While I agree with most of what you say, business roll-over relief also acts as a barrier to entry for new start-ups. The existing company can buy the "means of production" out of pre-tax funds, while the new entrant must use after-tax funds. It is a particular problem in land-based industries, where the price of land gets inflated beyond its productive value for those buying with after-tax funds.

Probably getting too heavy for the season of goodwill though. :wink:

Definitely!

 

[Flyfisher]

I have more of a problem with large company's paying people minimum wage when they turn over millions in profit , or companys using foreign work houses to get their products onto UK shelves with minimal outlay for their labour.

I would rather buy Clarkes shoes than Adidas for instance.

You mean the Clarkes shoe company that closed down its UK manufacturing in 2005 and moved it to the far east?
http://www.bbc.co.uk/somerset/content/articles/2005/01/10/clarks_feature.shtml

 

[Flyfisher]

What about a company that makes large gross profits but chooses to invest those profits in new outlets, thus increasing its costs and so reducing net profits and thus its tax liability? Indeed a successfully expanding company could operate for decades this way without making a net profit and thus 'avoid' tax.

While I agree with most of what you say, business roll-over relief also acts as a barrier to entry for new start-ups. The existing company can buy the "means of production" out of pre-tax funds, while the new entrant must use after-tax funds. It is a particular problem in land-based industries, where the price of land gets inflated beyond its productive value for those buying with after-tax funds.

Surely a new start-up would be using investment funding because, by definition, it has none of it's own so pre/post taxation isn't relevant?

 

[worms]

Surely a new start-up would be using investment funding because, by definition, it has none of it's own so pre/post taxation isn't relevant?

Regardless, the new entrant is paying more than the current business who buys with pre-tax £s. While the subsequent interest may be tax deductible, the capital repayments normally are not. In practice, I would think that many (most?) business start-ups are with people's own hard-earned cash/money from redundancy/money from remortgaging rather than straight business loans.

 

[Flyfisher]

Why would the capital repayment of a loan not be tax deductible? It's a legitimate cost to the business isn't it? Perhaps it depends how the loan is structured?

I'd agree that most small company start-ups are funded with people's own resources, but don't forget that redundancy payments are tax-free (to £30k, I believe) and remortgaging a home usually releases equity that has arisen from house price inflation, which is not subject to taxation. For larger businesses, the start-up capital will likely come from banks or other venture capital sources, which is effectively 'pre-tax £££s' for the borrower.

Certainly an incumbent business has many advantages over a start-up, but that's life and is why new businesses are likely to be more successful by finding a new market niche than simply trying to compete head-on.

 

[robgil]

I have more of a problem with large company's paying people minimum wage when they turn over millions in profit , or companys using foreign work houses to get their products onto UK shelves with minimal outlay for their labour.

I would rather buy Clarkes shoes than Adidas for instance.

You mean the Clarkes shoe company that closed down its UK manufacturing in 2005 and moved it to the far east?
http://www.bbc.co.uk/somerset/content/articles/2005/01/10/clarks_feature.shtml

Yes , thats the one , their factory in Vietnam http://news.bbc.co.uk/1/hi/business/5408628.stm is by a long shot better geared towards taking care of its workers than most sweat shops used by most big brand names.

I am not really a big buyer of UK made products, most things made here are generally over priced and/or of poor quality. And most 'British' products are made somewhere else anyway.
Land rover for instance , a very rubbish product, over priced and not made here anymore. They were rubbish when we made them as well.

 

[Penners]

a little unfair to suggest any of my comments imply I have any objection to companies making large profits

My tirade wasn't directed specifically at you, Jelly, so I apologise if it appeared to be so. It was just a rant about the generally ignorant attitude towards profit, in this country - led mainly by the meejah.

 

[Jellyfire]

Ah ok apologies, I read it as a response to my comments, though we were both more or less saying the same thing. My argument wasn't formed particularly clearly, I'll blame medication!