Tesco, the retail and property giant, is facing new allegations of seeking to avoid corporation tax on millions of pounds of profits through an offshore scheme.
The magazine Private Eye this week identified what it said was a Tesco tax avoidance operation involving a complex web of offshore operations centred on the Swiss canton of Zug. These arrangements involved an English limited liability partnership (LLP) called Cheshunt Overseas. Cheshunt is the name of the Hertfordshire town where Tesco has its headquarters.
Indeed. The real issue here is why it's financially advantageous for Tesco to put up with all the hassle involved in setting up a Swiss company to handle their accounting, rather than doing it here. Our loss is Switzerland's gain; I bet no-one in Zug is complaining.
If anyone is the guilty party here, it's the UK government for making it worthwhile for companies to arrange to pay their taxes elsewhere rather than contributing to the British exchequer.
(The other question, of course, is how any journalist can think it's sensible to describe Switzerland, of all countries, as "offshore").
Perhaps the journalist was more familiar with the OED definition of offshore than you are:
In or to another country; in a territory outside one's own country. Used esp. with reference to economic or financial activities undertaken abroad in order to take advantage of tax benefits, lower costs, or less stringent regulations.
Therefore, it is the responsibility of good Government to always reduce the burden of taxation to an absolute minimum.
Currently, we don't have good Government we have one that pushes the self-destruct button.
It's a wonder some of these companies even stay here.
Moment of the week - Gordon Brown going cap in hand (crapping himself) to the North Sea Oil Industry begging them to up production.
Now put aside that North Sea Oil is a very small part of World oil production, put aside that North Sea oil isn't even used to produce fuel but don't put aside that this is the same wicked oil industry that shit head Brown cynically and opportunistically clobbered (daylight robbed) with a windfall tax just two years ago.
They should have told him to f**k off. The policies of middle class lefty knobs like Brown inevitably mean we end up reaping what we sow in the end.
The (only) joy of Brown is that he ends up doing it soon enough to still be around to take all the blame.
If Blair was the Teflon kid then surely Brown must be the Araldite King.
Tax avoidance is perfectly legal, and I have been doing it for years - e.g I avoid tobacco duty by not smoking.
Any company that has numerous foreign shareholders (as Tesco does) and substantial foreign assets (as Tesco does), would be mad to expose all their profits to HMRC in the UK and probably end up getting taxed twice.
There are two main reasons why big companies are fleeing abroad: -
Heavy corporate tax (including stealth taxes) and compliance load.
Totally unreasonable behaviour by HMRC - IR35 and Arctic Systems being just two disgraceful examples in my own field (IT).
Both of these are politically inspired - you can work out the rest.
Oh yes and the St. John Gumby "I think all foreigners living abroad should be.... taxed"
Perhaps companies taxed off shore should only be allowed to employ people full time on mugh higher wages than minimum wage. Just to ensure they're not using the benefits system to support their short hours and low paid workers.
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