Posts Tagged ‘tax avoidance’

Energy companies eurobond tax-dodge scam

October 27, 2013
energy companies price hikes

energy companies price hikes

Over the last couple of weeks, we have had the Big 6 energy companies raise their prices by and in some cases more than 10%, just in time for winter.

So much for the advice from David Cameron, given when SSE was the first to up their prices, to switch suppliers. Had they done so, they would have found themselves out of the frying pan and into the fire as when British Gas increased prices a few days later, by a bigger hike.

The advice worth following, was that given by Paul Lewis on Money Saver, to switch to fixed price for the next few years, but those deals have probably already gone.

The regulator is at fault. We should have a single fixed tariff of x per kW-hour, no standing charges, anyone can then easily make a comparison, as they do buying petrol or diesel at the pump. The energy companies can bleat all they like at the need to pay for infrastructure. You do not pay an additional infrastructure charge when buying groceries at the supermarket, nor when buying petrol or diesel, therefore no reason at all to pay a standing charge for gas or electricity.

There are two ways to pay less, find a cheaper tariff, use less.

For many, the choice is between eating and heating.

To justify their latest hike, they always have an excuses other than greed and fat cat bonuses. In the past it has been wholesale prices, now it is green taxes and social taxes, often lumped together.

David Cameron, in a knee-jerk reaction, has offered to do away with green taxes.

We must not do away with green taxes. Green taxes are to pay for the future, for renewables, for insulation.

Social taxes provide a payment to those struggling to pay their fuel bills.

Former Prime Minister John Major has suggested a windfall tax.

Ed Miliband has suggested a price freeze.

When the energy companies bleat about green taxes, they do not mention their eurobond tax-dodging scam.

The eurobond scam, is exactly the same tax dodge being used by High Street retailers and big food companies.

The energy companies are foreign owned. They are lent money at very high interest through the Channel Islands. Paying the interest reduces profits in the UK, relocates those profits offshore, where no tax is paid.

Maybe we should be plugging the eurobond tax scam.

And while we are at it, let’s re-nationalise the energy industry.

We are likely to see rolling black outs over the next few winters. Why? Because of the failure of the industry to invest. We need plant on standby, redundancy but that costs money.

Please sign the petition to re-nationalise gas and electricity.

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Starbucks hypocrisy beggars belief

December 6, 2012
Starbucks Coffee dodging tax as usual

Starbucks Coffee dodging tax as usual

 We're not closing in on the undeclared income of Starbucks


We’re not closing in on the undeclared income of Starbucks

Note to Starbucks: we don’t want token gestures. We want the right tax in the right place at the right time. — Richard Murphy

Forget it guys. That solves nothing. No one asked you for voluntary box donations. We asked you to pay the right amount of tax in the right place at the right time. — Richard Murphy

Did Starbucks really think they could get away with paying a token amount of tax?

Starbucks has offered to pay £10 million a year over the next couple of years, a total of £20 million. This is a pittance to what they have dodged over the last fifteen years.

The company’s UK Managing Director Kris Engskov:

Having listened to customers and to the British public, Starbucks in the UK will be making changes which will result in the company paying higher corporation tax in the UK – above what is currently required by law.

Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges.

Is this their idea of a sick joke? They claim to be listening. There must be a disconnect between their ears and their brains. They may be listening, but they are not heeding what they hear.

People are saying loud and clear: Pay your tax!

This is like being mugged, the mugger returning our mobile phone and then expecting us to be grateful.

If people were angry before, they are now outraged.

Starbucks are still maintaining the lie that they find it impossible to make a profit in the UK.

Tax Consultant Richard Murphy:

The reason why Starbucks has not been paying the right amount of tax in the right place at the right time is that it has put in place legal and accounting structures that have meant that the way it has been able to record its profits do not match with the underlying economic reality of the way it must make its money. So, royalties were being paid to reflect the supposed costs of creating new products and associated “intellectual property”. But no one, anywhere, thinks it costs 6% of turnover to know how to put water on coffee, mix a milkshake with a silly name or sell a chocolate brownie. So it was the structure that was wrong.

The same with the coffee beans: what was wrong was attributing the profit to the traders in Switzerland. It was the end customer who created the profit on those beans, not the dealer in Switzerland.

Since I was involved in the original Starbucks story (although Tom Bergin of Reuters is the complete star of this issue) I can tell you working out what was happening in this company was hard: they did all they could to obscure the realities of the economic substance of what was happening. Their accounts are as clear as mud: there aren’t any for Switzerland for a start. They’re just not available. So a lot of fevered effort went into fathoming out what is now known.

If Starbucks are unable to make a profit in fifteen years of doing business in the UK, why are they still here? Were they to leave, they would not be missed. Starbucks has 760 coffee shops across the UK.

Can an indie coffee shop over tea at HMRC negotiate away their tax, of course not, and neither should Starbucks be able to.

To put the £20 million in context, four Starbucks bosses have just awarded themselves a £50 million bonus.

What we need is not token tax payments, but real change, transparency and payment of fair share of tax.

If a company operates in the UK, then it should expect to pay UK tax. If not, then it is not wanted.

Starbucks will say they create jobs. Jobs with lousy working conditions. Starbucks is now forcing its workers to sign new contracts with even worse working conditions.

Richard Murphy has suggested the following:

  • Full country-by-country reporting that will tell us for each and every country where Starbucks works what is made, what costs are, how much is paid to staff, what the profit is, what taxes are paid and critically how much of all of this is down to intra-group rather than genuine customer trading.
  • A blow by blow explanation of tax actually due and paid: not accounting numbers but real numbers too.
  • A commitment to make tax payments where profits are really earned – which is where the end customers are, where people are employed and where the real assets (stores mainly in their case) are.

If Starbucks think they can get away with coughing up what is little more than loose change as a token tax payment, then they are sorely mistaken.

Starbucks is now a toxic brand. A coffee at Starbucks is akin to associating with known criminals.

Starbucks is to be occupied Saturday 8 December 2012. If there is not an occupation organised at a Starbucks near you, then please help organise one.

Amazon makes UK publishers pay 20% VAT on e-book sales

November 3, 2012

Luxembourg-based Amazon profits from European tax anomaly, itself paying only 3% VAT on digital books sold to UK readers.

Amazon dodges UK tax

Amazon dodges UK tax

Amazon is forcing British publishers to cover the cost of a 20% VAT charge on ebook sales – even though the true VAT cost to the online retailer is only a fraction of that amount under its generous Luxembourg-based tax regime.

The firm is able to wield such power over publishers because it has a near monopoly of the UK digital book publishing market. According to reliable estimates, it sells nine out of 10 ebooks in the UK, while using its Luxembourg tax status to wring more profitable terms from publishers.

Companies such as Amazon collect the VAT levy from consumers before passing it on to governments. In the case of Amazon’s UK ebook sales, it only has to pass 3% to Luxembourg. If it was based in the UK it would have to hand over 20%.

According to a contract seen by the Guardian, Amazon starts negotiations with its publishers on the basis that the UK VAT rate of 20% must be knocked off the cost price.

However, its base in Luxembourg allows it to benefit from a European tax anomaly and pay only 3% VAT on digital books sold to UK readers. Subsequently, Amazon charges the difference between the UK VAT levy imposed on publishers and the actual 3% that it pays, which amounts to an extra £1.38 of profit every time it sells a £10 ebook in this country.

It then negotiates further substantial discounts on top of the VAT subsidy, which in some cases can result in publishers receiving less than 10% of the price paid by the online customer.

Publishers that do n0t fall into line can be dealt with summarily. “These are not pleasant people to do business with,” one senior publishing executive said. “They have no compunction in shutting down the buy button on their site on our titles if we step out of line,” a practice that can be carried out in seconds. The publisher asked not to be named for fear of permanent damage to their commercial relationship with Amazon.

According to another unnamed publisher who negotiated an ebook deal for a well-known figure, Amazon sought a deal that would have resulted in a 92% discount. The publisher refused the terms, which would have seen them receive just 80p on an ebook selling for £10 on Amazon’s UK website.

The contract seen by the Guardian is couched in legal language that confirms Amazon’s considerable commercial power. The section that spells out the fact that Amazon’s starting price for discount negotiations is exclusive of 20% VAT says: “Base price is the digital list price exclusive of the standard statutory rate applicable to ebooks in the United Kingdom.”

This means a publisher signing up with Amazon would have to agree to a starting price of £8.33 for an ebook retailing at £10 – the digital list price – to reflect the 20% VAT any UK-based ebook retailer would have to pay.

But if it were based on the true 3% rate paid by Amazon, that starting price should be £9.71 – meaning the publisher is already giving the online retailer a £1.38 discount even before it agrees to a wholesale discount that can run as high as 90%. Typically, however, Amazon seeks a discount of up to 65% on ebooks including the phantom VAT charge.

The contract also bars the publisher from offering a better deal to a rival retailer without automatically giving the same discount to Amazon. The contract says: “If the base price exceeds the base price … provided to a similar service then … the base price hereunder will be deemed to be equal to such lower price, effective as of the date such lower price comes into effect.” Effectively, the contract mandates that no other bookseller can undercut Amazon.

Amazon’s grip on the ebook market, via the Kindle device and a large digital catalogue, has ensured that the publishing industry has not suffered the same trauma as the music industry from digital piracy. It is unclear whether Amazon passes on any of the gains from the VAT charge to consumers.

In private, British authors and publishers express fears that Amazon’s dominance will send the industry into further decline.

They fear that turning the screw on price will force smaller and medium-sized publishers out of business, reducing the choice of books and authors and creating more problems for the already struggling high street book retailers.

Amazon has a reputation for using its global scale to seek the most competitive arrangements possible. None of its arrangements are illegal. Amazon would not answer specific questions about its market share, contracts with publishers, VAT, and its business practices.

It said: “Our goal is to make it easy for readers to discover and read the books they love by expanding access to millions of books in both digital and print.

“We’ve been able to do this by focusing on innovation, as exemplified by Kindle, and by offering customers the widest selection at the best possible prices and service.”

Earlier this year the Guardian revealed that Amazon generated sales of more than £3.3bn via its UK website last year but paid no corporation tax on any of the profits from that income.

Security and Exchange Commission filings, highlighted by Bookseller magazine, show that in the past three years, Amazon generated sales of more than £7.6bn in the UK without attracting any corporation tax on the profits from those sales.

First published by the Guardian.

At the E-book debate, part of the Guildford Book Festival, it was stated Amazon is good at what it does. True, good at shafting authors, publishers and readers, good at dodging tax.

The Random House House Penguin merger is being driven by the bullying tactics of Amazon. But this is the wrong approach. What is needed is for the Big Six (hopefully not soon the Big Five) publishers to establish an e-book digital platform, open to all, not just the Big Six, using non-proprietary open source format with no DRM e-books, available for download at one dollar, with the revenue (less costs of running the platform) split 50:50 author and publisher. The low price would reflect the zero costs involved in e-books, lead to more downloads, make piracy irrelevant, like bandcamp, readers would be encouraged to share.

VAT on e-books is an anomaly when books in UK and Ireland are zero-rated for VAT. This is currently being challenged in the Courts and if successful could result in e-books being zero-rated.

If you own a Kindle you run the risk that Amazon could at anytime without rhyme nor reason wipe all the books off your Kindle, close your Amazon account, and provide no explanation.

Waterstone’s sell Amazon Kindle, but if you go to their website and click on e-books, it warns you they are epub format and cannot be read on a Kindle. talking to one of their stores, it was confirmed this was correct, a historic legacy from when they sold Sony e-readers. Buy from Amazon. Bizarre.

The missing billions | UK Uncut

June 15, 2012
UK Uncut legal action in court

UK Uncut legal action in court

Only philistines would close libraries. Only the meanest would cut benefits to the most vulnerable in society.

The ConDem government is doing both.

On idealogical grounds the ConDem government is engaging in slash and burn of public services in the name of austerity.

What sort of sick bastard works in a Job Centre and takes a sick pleasure in cutting benefits to the most vulnerable in society, forcing people to work as unpaid slave labour?

The cuts are not even necessary were HMRC to do their job properly and collect unpaid tax from tax avoiders.

UK Uncut Legal Action have been given leave to challenge HMRC letting off Goldman Sachs a £20 million tax bill.

We only know the details of this case due to a brave whistle-blower. A whistle-blower HMRC victimised.

If a small business does not pay their tax, they are chased by HMRC, if necessary made bankrupt to recover the tax.

Why is Dave Hartnett, the most wined and dined public servant, not under criminal investigation for Misconduct in Public Office and money laundering?

You can follow this case on twitter by following @ukuncut and @ukuncutlegal.

Please donate to UK Uncut Legal Action.

We are not the Topshop generation

December 30, 2010
Vodafone protest

Vodafone protest

Peoples’ reactions of surprise when I tell them that I’m balancing studying for my GCSEs with actively fighting the recently announced public sector cuts never fail to shock me. After all, the student demonstrations that were recently held nationwide when it was announced that the ConDem government was pushing for an increase in tuition fees, throwing the life plans of many young people into uncertainty, received widespread media attention and were one the main reasons for the gap between the majority voting in favour of the rise and minority voting against the rise being slashed by 75%, proving that not only do teenagers have a voice but we are being listened to, especially when we’re fighting to defend our rights.

I’ve been interest in politics for as long as I can remember. My dad was involved in politics and often took me along to Stop The War meetings and demonstrations all over the country, encouraging me to develop my own political opinions. However, when he left England for work when I was 14 I became less involved, until this September, when, furious over the Tory’s plans to cut NHS funding, I went to the demonstration in Birmingham outside the Conservative Party Conference were I met the wonderful Anna (@thespyglass) on the bus there who told me Twitter helped her get involved in political events. I joined immediately, and its become my main platform for finding out about new events and planning them as well. Its also how I found out about UKUncut.

The appeal of UKUncut is obvious, not only does it oppose the cuts that will effect every section of society, particularly the most vulnerable, but it also provides solution to the cuts: getting the money back from the big businesses like Arcadia and HSBC who have taken it from the tax payers’ pocket. The direct action protests are creative, effective and, perhaps most importantly (for me at least), not violent. Despite what some newspapers and David Cameron would have you believe, the majority of people my age do realise that smashing up war monuments and throwing fire extinguishers off of tall buildings is not the most effective way to get people to empathise with us.

Also, UKUncut is easy to get involved in. You can post an event on the website just a week in advance and people will come along and join you, regardless of who you are, it doesn‘t even require a great deal patience, with social networking being such a key part of spreading the message its likely that someone will let you know they‘ll be joining you within hours. The movement is snowballing and everyone, from OAPs to housewives to GCSE students like me are being heard, with over 50 events across the country held yesterday, it doesn’t matter where you live, anyone can stand on the front line and oppose the tax avoidance and Tory Cuts that are damaging our public sector.

Of course, I sometimes question whether this is the right time of life for me to be so politically active, especially when I’m in the run up to so many important exams, but the way things are going I’m not going to able to get into university anyway, regardless of exam results, and my doubts never last long, although it did worry me when I arrived home from the Pay Day warm-up protest I’d organised on Thursday to revise for the French GCSE I had the next day to find the majority of my anxieties had lifted – I was more worried about people turning up and what I’d say to the Guardian than I was about doing well in an important exam (fortunately my exam went well, and hopefully next time I‘ll be just as lucky). Whilst some people in my year at school do think its weird that, at the weekend, they’re getting off with people at parties whilst the only parties I’m gossiping about are the political ones, I’m greeted with support everywhere I go, my parents realise that it’ll have a good impact on my future, my friends think its really interesting, and even my teachers are more likely to wish me good luck than send disapproving glances my way, and I really hope that other people in a similar situation as me are just as lucky.

Because its not just me, I’m certain there are loads of other 15-year-olds across the country who are fuming about the way the politicians (whose university educations were paid for by our parents and grandparents) aren’t seeing us as capable people with bright futures but merely as drains on society. No, we are the future, and we are fighting for our future, not because we want to but because we need to, because we’re mad as hell and people need to know about it, of course its difficult but, for me and the hundreds of other teenagers who think like me, because there will be others, sitting down and taking it is simply not an option.

An excellent article by Anna Mason (@magiczebras), member of Liverpool Uncut, originally posted on UK Uncut.

Also see

UK Uncut Brighton – Sir Philip Green’s Christmas Payday

Sir Philip Green is Sponging Off the State

Shop a Scrounger

Captain SKA – Liar Liar

Tax dodgers shut down again

Lone Protests Against Tax Avoiders

December 15, 2010
Abi Daker Topshop protest 2010

Abi Daker Topshop protest 2010

Inspired by the UK Uncut Tax Avoidance campaign and the anti-Top Shop protests on Saturday 4th December, I decided to stage my own small protest in the afternoon. Essentially, it was a one-woman protest in Top Shop – I simply requested either that the shop let me pay for my item exclusive of VAT so that I could pay it directly to the revenue myself, or that they signed a form which guaranteed that the company would pay the VAT to the revenue and confirm to me in writing that this had been done. I wanted to express my disgust at tax avoiders like Philip Green in the only way I was able to at the time, by expressing my distrust in his handling of the company’s tax affairs. I did not wish to inconvenience the staff of the store so I was very polite and gave them chocolate to thank them for letting me make my protest. You can read my blog about it here.

On Sunday 12th December I carried out another protest along the same lines, this time in Evans in Kingston. The manager took my request to withhold the VAT seriously, and after about a 10-minute wait while she went to phone head office – during which time I handed out leaflets about my protest to other shoppers by way of apology for inconveniencing them – she returned and agreed to let me pay for the items, less the VAT of 74p. She signed my form and I gave her a duplicated copy, and promised to confirm to her in writing when I’ve sent the 74p and letter of explanation off to the Inland Revenue. She said that her main concern was not being accused of having a short till, so the form was important to her. However, I did note that the receipt she gave me listed the 74p as ‘promotional’, not as VAT. However, I will include a copy of the receipt in my letter to the revenue by way of explanation. I finished off my protest by passing a Santa hat filled with chocolates & sweeties around the staff, who were very good-natured and interested throughout my protest.

After my blog about the original protest went live on Monday night, the idea ran swiftly round Twitter and the internet, and seemed to capture people’s imagination. Others pledged to join me by making similar protests, and I began to see the potential for a nationwide campaign of very polite, individual, chocolate-giving protests, which could run alongside all the other non-violent and creative protests currently targeted against the Arcadia Group. If there are no sit-ins or other actions planned for your area, why not carry out your own lone protest whenever it suits you – and you don’t have to be a woman to take part! It would be lovely to have hundreds of people across the country making their own solo protests from now until Christmas – and beyond if necessary!

I have written a 10-step guide to carrying out your own protest, which is posted below.

UK Uncut’s Pay Day is planned for Saturday 18th December, and it would be fantastic to coordinate a day of individual protests against the Arcadia group stores. If a group of you go along, spread yourselves out through the queues at various tills in the shop and don’t all go in at once. And perhaps not while there’s another demo going on nearby – the aim is not to attract the police or security. I propose that interested people use Twitter and Facebook to find others in their area to coordinate timings. Don’t add a time to your initial message – organise the times privately amongst yourselves for maximum impact.

To organise via Twitter: To join up with others carrying out One Woman Protests on PayDay, tweet the name of the shop you plan to protest in, the town and the hashtag #onewomanprotest. Sample tweet: ‘Topshop Oxford Circus #onewomanprotest’. Then click on the hashtag and use the advanced search at the top of the page to find others planning a protest in the same town and/or store. Search for your town name in the ‘All of these words’ box, with the hashtag ‘onewomanprotest’ in the ‘This hashtag’ box (you don’t need to add the # symbol.) When you find someone planning a similar action nearby, feel free to tweet them to coordinate your protests throughout the day for maximum impact, rather than everyone descending at one time en masse. You could also arrange to meet up with them before and after for moral and mutual support!

To organise via Facebook, click here.

I’ve set up a public Facebook event to coordinate meeting up with others. Please post your town and the name of the shop you plan to protest in in the comments section here. Then search the page for your town name. When you find someone planning a similar action nearby, message them to coordinate your protests throughout the day for maximum impact, rather than everyone descending at one time en masse. You could also arrange to meet up with them before and after for moral and mutual support.

If you aren’t a member of either site and would like another way to contact others, I suggest you use the comments section on my blog. You will need to enter an email address with your name so that you are contactable.

How to carry out your lone protest:

• Extreme politeness is the key

• Individual protesters make more impact than a crowd because companies can see their customers walking out of the door, one by one, all day, or managers have to take personal responsibility for the company’s VAT affairs

• Chocolates or similar for the staff as a thank you are essential

1. Be prepared:

Before you start, download, adapt and print out the forms to use in your protest and flyers to hand to other shoppers.

2. Please take responsibility for your protest and put your own name to it:

I’m aware that if this protest idea takes off, my name will be associated with it. I am happy with that – I put my own name and address on the flyers I first used in Top Shop because I would actually like to receive reassurance from the company about their business practices. Therefore, I urge you not to make this an anonymous protest but to put your correct name and address on the flyers please.

3. Be realistic in choosing your target:

For this to work, you need to be prepared to buy the product you take to the till. If you’re picking a store to make your protest in, make sure it’s one you would normally shop in. Remember, you’re making this protest as an actual consumer of the shop involved, and expressing your disappointment and loss of trust in their brand. You need to be able to make it clear truthfully to the staff that you would have shopped there had they only been able to provide the requested guarantees that they can be trusted. And should your protest be accepted, you need to pay for the purchase, so if it’s clothes, do try them on just in case!

Here’s a list of Arcadia stores, the chain run by Sir Philip Green: Wallis, Top Shop, Top Man, Burton, Dorothy Perkins, Miss Selfridge, Evans & Outfit. BHS is also owned by the same company. If you want to apply these tactics elsewhere, you could try withholding the VAT on your Vodafone bill – obviously you will need to be an existing customer of theirs for this to work!

4. Don’t draw attention to yourself before you start your protest:

The idea is to start your protest at the till, so browse beforehand, decide what you want to buy, try it on if appropriate and generally act like an ordinary customer. You need to be prepared with your sums and flyers before going to the till, so if necessary, note the price of the item and leave the shop for a while in order to do this – or fill them in in the changing rooms. Too many people standing in corners using their phone calculators and scribbling will draw attention to the protest before it starts and – if it takes off across the UK – security might ask you to leave before you get to the till. Once you’re ready, take your item to the till and queue as you normally would. See below for detailed instructions on preparing the forms*.

5. Be polite and respectful while making your protest:

The staff are not to blame for the corporate culture of the store, so be polite at all times, but do take your request as high as you are able while at the counter. This could include asking staff to ring head office. This is good as you then have time to talk to the queue you are delaying about what you are doing and why. Hand out flyers for them to find out more and inform themselves about the issues so they can make a choice for themselves about where to shop. Don’t force anyone to take a flyer – this is your protest, not theirs. See below for suggestions about what to say at the till**.

6. End your protest by thanking the staff for allowing you to make it:

I tried to make sure all the staff I’d spoken to could hear that they were included in my thank you, and I gave them chocolate as a gift for letting me make my protest. Company policy is not their fault, after all!

7. Start and finish your protest in a timely fashion:

Don’t start your protest until you reach the till, to avoid alerting security or annoying other shoppers – or messing up the pitch for other lone protesters who may be in the store unknown to you! Talk to other shoppers and staff politely whilst in the midst of your protest. Once you have thanked staff and given them a token of your appreciation, leave the store quickly and quietly, saying no more about it. The aim is not to cause any fuss or chaos – just for the company to see its potential customers walking out of the store without making a purchase, or for them to have the hassle of taking personal responsibility for their company’s tax affairs.

8. Have your support in place for afterwards:

While it didn’t take too long to psych myself up to carry out the protest, I found myself quite wobbly when I came out due to the unusual bravery involved, so perhaps arrange to phone or meet friends for a postmortem session somewhere out of earshot afterwards to let off steam from the adrenaline rush!

9. Report your protest to inspire others:

If you’re on Twitter, please use the hashtag #onewomanprotest on any reports. I thought it might be good to have something shorter but that one seems to be quite popular already and some very unscientific straw polls agreed with me. Men, go ahead and protest too but please use the same hashtag to link the reports together.

Feel free to blog your experiences and spread the links widely on Twitter and Facebook – the more people who know about this, the better.

10. Follow up any successes:

If you’ve managed to withhold your tax, send your cheque off to the address on the form immediately, and keep a record of the date, cheque number etc to show if asked. It could also be a good idea to send the shop full details of this payment for their accounting records – ask at the time of the protest if they need this confirmation and comply with any requests they make.

If you manage to get the guarantee form signed, follow it up after 30 days, which is a reasonable amount of time for them to have paid the tax onwards. Remember, follow up the person whose name is on the flyer as you’ve asked them to sign on behalf of the company.

*Prepare your forms:

Divide the cost of the item by 1.175 to find out how much the item costs less tax, then subtract this from the total to find out how much the tax is. Eg £20 /1.175 = £17.02. £20-£17.02 = £2.98. (This sum will change on 1st January when the new VAT rate comes in.)

Form 1: Withheld tax

Fill in the date, your name and address, the branch name and store name, the amount you intend to pay and the amount of tax you intend to withhold.

Form 2: Guarantee for shop to pay tax

Fill in the date, your name and address, the branch name and store name and the total value of the items, including the VAT element as well.

If your protest is successful, fill in an identical copy of whichever form the shop agrees to, and get them to sign this too, so that both parties have a record of the transaction and pledge.

**What to say – here are my suggested wordings:

Allow the staff to ring up your items and ask you for the total amount. At that point, say ‘I will only be able to pay xx [the total excluding VAT] today, as based on the business ethics of Sir Philip Green, I’m not sure I can trust your company to pay this tax on to the government. I intend to pay the VAT of xx [state amount of VAT due] to the government directly by sending a cheque to HM Revenue & Customs myself. I need you to sign this form to confirm that I have done this please.’ You may need to repeat this several times to various members of staff as the query is escalated.

If they refuse this approach, take out the second form and say, ‘OK, I understand. In that case, I will need you to sign this form to confirm on behalf of [xx store] that the VAT will be paid correctly to the government and that you will write to me to confirm once this has been done.’

If they refuse this approach too, say politely ‘Would be able to go and ring head office to check please, as I’d really like to buy this item but I am still worried about the tax question and need reassurances from you.’

If all these approaches are rebuffed, then say politely ‘I’m afraid I won’t be able to buy this item then, but thank you for allowing me to make my protest against your company’s business practices. Here’s a little something for the staff to apologise for any disruption I’ve caused. Thank you very much for your help.’

GOOD LUCK everyone and let me know how it goes!

Guest post on UK Uncut by Bryony Evens, who on 4 December 2010 staged an intrepid one woman protest in Topshop.

I have my qualms on this tactic. It means you are obliged to buy something in Topshop and I would rather people did not buy. But if you insist, then it enables you to protest at the same time.

Other alternative one person protests: Slip flyers in the pockets of the clothes, stick up posters in the changing rooms, re-arrange the clothes, take a pile of clothes to the check out, offer to pay when Sir Philip Green pays his tax.

websites

Tax Justice Network

Tax Research UK Blog

False Economy

Also see

Tax justice: Back on the agenda

Vodafone tax protest made me smile

Sir Philip Green is Sponging Off the State

Shop a Scrounger

What we’re arguing against and what we’re fighting for

Captain SKA – Liar Liar

Topshop day of action against tax dodger Sir Philip Green

Why cuts are the wrong cure

If ever there was a campaign that Tories should support …

If ever there was a campaign that Tories should support …

December 14, 2010
Topshop unpaid tax protest

Topshop unpaid tax protest

Those who oppose the UK Uncut tax protests argue – as the new head of the CBI did in the Observer today – that a company has a duty to be “tax efficient”. In saying this Carr argued:

What are the rights, duties and responsibilities of any company? To ensure shareholders are correctly rewarded and to act in the right way for the organisation. Part of that is to be tax efficient. That’s reasonable and appropriate.

He’s wrong. As the Tax Justice Network has argued:

Companies and rich people can locate wherever they are “tax efficient”. Ordinary people lose out from the process. There is a term for this: its called the Bono Defence. Named after the Irish rock musician whose band shifted its tax base from now bankrupt Ireland to the Netherlands in the name of “tax efficiency”, the Bono Defence provides stark warning that tax dodging doesn’t promote better economics; it promotes failed states.

That’s a big claim, but one that is justified. Those like Bono and the CBI, and others from business and the right wing who argue tax efficiency is simply tax avoidance and tax avoidance is legal and so acceptable have entirely missed (or deliberately ignored) some enormous ethical issues when making their claims. For a description of what tax avoidance (and some of the other language used here about tax) means I refer you to my blog but the big issues can easily be explained.

First, just because something is legal does not mean it is ethical. Think apartheid in South Africa or even slavery in 18th century England and move on from there.

Second, remember that when you avoid something you go round it. That’s what tax avoiders do. They go round the law. How on earth can anyone, anywhere claim that getting round the law is ethical?

But perhaps most important is the fact that a limited liability company gives its shareholders in whose interest Roger Carr says it must be run the most phenomenal economic privilege: they cannot be sued for the debts the company incurs if all goes wrong even though they get all the benefit if things go right. That’s an astonishing privilege. It is not a right. I stress, it is a privilege – and one that is granted by parliament on behalf of the people of the UK.

The privilege carries with it at least two implicit responsibilities. The first is to account for how the privilege is used – which means putting full and proper accounts on public record so we can know exactly what our companies are up to. The second obligation is to pay for the privilege – and that means complying fully and willingly with the tax (and other) laws passed by the UK parliament that creates them using exactly the same authority that they use to grant the privilege of limited legal liability. Of course these two obligations are also related – the accounts must properly explain how much tax is paid.

In combination these observations puts paid completely and utterly to Roger Carr’s argument that the company has a duty to its shareholders to be “tax efficient”.

That’s not true. It has a duty to society to be tax compliant in exchange for the benefit of limited liability granted to its shareholders.

That then requires that companies be tax compliant. Tax compliance means seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.

Tax compliance is a million miles form tax avoidance. Tax avoidance is about reducing a tax bill come what may without breaking the law, and not caring who else has to pick up the bill. Tax compliance is about trying to pay the right amount of tax, but no more. The last bit is important: no one has to voluntarily pay tax. But no one has to use a tax haven or a loophole either when the result is that the tax not paid by the company and its shareholders as a result will be shifted onto ordinary working people instead (and for the pedants who say this assumes tax is a zero sum game, my answer is it certainly looks like it is from all the evidence over recent years of tax burdens shifting from capital to labour).

So, in that case what is UK Uncut doing? In summary it seems to me it is doing three things. First it is trying to uphold parliament and the ethics of democracy – including voluntary compliance with the rule of law. Second it’s asking that people, and especially large companies, comply with the law – and not avoid it. And thirdly it’s saying that there’s a contract between the people of the UK and the people who own companies which is implicit in the granting of limited liability and that some who use companies are acting in breach of that contract. That is unacceptable and all UK Uncut are saying is that it’s time corporate UK honoured the obligations it has to fulfil in exchange for the privilege it has been granted.

Seen in this way it’s extraordinary that anyone can object to such a campaign. If ever there was a campaign that Tories should be turning out in force to support it’s this one, largely run by young people, that demands that people comply with the law and respect parliamentary democracy.

So the real question is, if they aren’t doing that, then why not? Could it be that they’re on the side of those who are in breach of their contract with society?

A guest post on UK Uncut by Richard Murphy, one of the country’s leading tax experts and founder of the Tax Justice Network. You can follow Richard on twitter or read his blog.

websites

Tax Justice Network

Tax Research UK Blog

False Economy

Also see

Tax justice: Back on the agenda

Vodafone tax protest made me smile

Sir Philip Green is Sponging Off the State

Shop a Scrounger

What we’re arguing against and what we’re fighting for

Captain SKA – Liar Liar

Topshop day of action against tax dodger Sir Philip Green

Why cuts are the wrong cure

What we’re arguing against and what we’re fighting for

December 12, 2010
George Osborne

George Osborne

George Osborne thought his smokescreen was working. It looked for a while like the people of Britain were going to accept the biggest cuts to public spending seen in the Western world in a century. He had, it seemed, delivered a sleight of hand that would impress even the most slippery magician.

The trick he’s been using to great effect is, though, an old one. It works something like this: in a crisis, people panic. They accept something big has to happen to solve it. But massive crises are complex, and a global economic collapse is particularly hard to understand – we aren’t taught the basics of economic history at school, we learn that these are matters for clever men in suits who use long words.

And so what George Osborne spotted is what right wing politicians around the world have known for the last 40 years: a disaster is a great time to radically change a country. From the privatisation of New Orleans’ schools after Katrina, to the corporate plunder of Iraq after the 2003 invasion, this trick is nothing new. Naomi Klein’s book The Shock Doctrine describes in detail how it has been used the world over.

There is a big problem. People understand this might require a big solution. And so they accept policies they would never normally countenance – policies not designed to solve the problem, but to radically change society in a way no one ever voted for.

And like this sleight of hand, Osborne’s “solutions” too are nothing new. The Conservative students I studied with at university – the generation who were born under Thatcher, and are now the researchers and aids to this government – were arguing for 30% spending cuts long before the recession. And their predecessors did too – in fact, in 1910, the Conservative Party brought down the Government rather than allow the people’s budget, the foundation of the welfare state, to pass. And they have used every opportunity since to rid this country of what they see as a dangerous socialist experiment.

And this “solution” is, of course, nothing of the sort. The idea that you solve a deficit caused by unemployment by cutting jobs is economically illiterate. Don’t take it from me – look at what is being said by the world’s leading economists, including most recent Nobel prize winners: Britain is embarking on a radical economic experiment which is not only un-necessary, but probably going to make the recession worse.

But because people have been taught that economics is too complex for us, many people seem to stop listening when you try and explain why the cuts are a bad idea. And I’ve tried lots of ways:

I’ve tried explaining that the Treasury’s debt really isn’t that big: it was bigger for most of the 20th century, and, compared to the size of our economy, is one of the lowest on earth.

I’ve tried to explain that most of the debt is owed to people in the UK: our pension funds buy government bonds. If, as the Tories predict, borrowing did get more expensive, that would just mean that Britain’s pension funds would get fatter – money the Treasury could tax back.

I’ve tried pointing out that the borrowing isn’t getting more expensive, but cheaper. And this is extra-ordinary. Before the election, the excuse that they gave for cutting public spending was that they believed we’d be punished by the bond markets if we didn’t: investors wouldn’t buy government bonds. They were wrong. What has actually happened is that investors have decided that they don’t want to risk buying shares in companies which might collapse, and so they have rushed to buy government bonds. As a result, borrowing is cheaper than it’s almost ever been. The reason they gave for cutting has evaporated. They were just plain and simple wrong.

And I’ve tried explaining the multiplier effect. The way out of a recession is to invest in jobs. Once you’ve created a job, that person buys stuff and pays taxes. The Tories like to compare the national economy to a household. But, when I buy stuff in the shop, I don’t get lots of the money back in tax. And I don’t get even more back in tax when the shopkeeper buys her stock or pays her staff. And again when the staff buy things, and so on. And so the way out of the recession is to look at the real problem – unemployment – and take advantage of record cheap borrowing, by investing. As Nobel winning economist Joseph Stiglitz – former economist for both the World Bank and Bill Clinton – tells us, cutting now could well lead to higher long term debts.

I’ve pointed out that we tried this all before. Cutting spending to pay the debts of WW1 caused the great depression. Building the welfare state allowed us to build our way out of the debts left by WW2.

And I’ve reminded people that it wasn’t public spending which caused this crisis, but listening to crazy right wing ideologues like George Osborne who thought that we should shut down everything and hand our economy to the bankers.

And I’ve tried explaining that public services aren’t a cost to the economy but an investment in the civilisation which makes our economy possible. If we don’t invest in them now, we make our future economy less prosperous, and this will cost far more than our record cheap, very low debt.

And I’ve pointed out that the impending climate crisis means we urgently need to invest to create jobs building a new economy – this can’t wait, and the legacy we leave if we don’t will be unimaginable.

And I’ve tried many more arguments besides. And these arguments work – sometimes. A little discussion of why the great economists of our age think that George Osborne is either mad or bad or stupid often does leave people convinced.

But many turn off at the wiff of a discussion of economic theory. And you don’t get the chance to have that little conversation with everyone in Britain.

However, there is one more argument: one I haven’t yet mentioned, which doesn’t require so much explanation – an argument which convinces almost all who hear it. A fact so compelling that once shouted, it will echo throughout the country:

If the mega-rich who caused this crisis paid the same level of tax as you and me, we wouldn’t have a deficit.

And of course, all of these arguments are what the Labour Party would be explaining, if they were brave enough to challenge Britain’s entrenched corporate power. But they aren’t. And so, with the noble exception of our one Green MP, and a few on the Labour left, it it falls to us, the people, to make this case.

But that’s ok. It’s ok, because this is nothing new. Public services were won by social movements who shouted, and screamed, and withdrew their labour, and occupied, and built new political parties, and, yes, smashed windows. And it’s ok because the fact that they don’t teach economic history in school doesn’t mean that we don’t remember this lesson. It was our grandparents and our great grandparents who won a state pension, who invented the NHS and who built affordable council houses. That was their legacy to us.

And it’s ok because our thanks to them will be to use the technology that our parents with their state funded education invented for us, to organise a resistance to the Tories so strong that our children will never forget. Because the history of Britain is a history of ordinary people fighting the Tories to win a fair share of our country’s wealth and power.

And as UK Uncut have shown, it is not a history that our generation will soon forget. Because people are realising that George Osborne’s smoke screen stinks. And as we blow it away, we will have a chance to learn the lesson Osborne teaches us, and take the chance to work out, together, what kind of country we want to build from the ashes, and leave for our grandchildren. And, if nothing else, that’s worth fighting for.

A guest editorial posted by Adam Ramsay of Bright Green Scotland and No Shock Doctrine on UK Uncut.

websites

UK Uncut

Tax Justice Network

Tax Research UK Blog

Also see

A sad day for democracy

Captain SKA – Liar Liar

For Our Generation it’s the Greens or it’s Nothing

Taming the Vampire Squid: Take back our banks

Why cuts are the wrong cure

Shop a Scrounger

Topshop day of action against tax dodger Sir Philip Green

Sir Philip Green and his Topshop billions get the UK Uncut treatment

Grolsch tax avoidance

Grateful Vodafone executives say a big thank you to Chancellor George Osborne

Nationwide shut down of Vodafone stores

Vodafone £6 billion unpaid tax bill

Topshop day of action against tax dodger Sir Philip Green

December 5, 2010
Demonstrators glue their hands to the window Topshop Brighton - Cathy Jones

Demonstrators glue their hands to the window Topshop Brighton - Cathy Jones

A more eloquent and informed group of demonstrators would be hard to come across and one is struck by the wide appeal across ages and incomes, of what they had to say. — Alex Thomson, Chief Correspondent, Channel 4 News

What do Topshop (Sir Philip Green Arcadia Group), Vodafone, SABMiller (brewers of Grolsch), Boots, Barclays and now Cadbury’s all have in common? They all dodge their taxes.

We all pay our taxes. We may not like it, but it is part of our civic duty, part of our obligation to the Big Society. But not it seems if we are big enough. If we are big enough or rich enough, we get away with paying little or no tax.

The first Saturday of December, one of the busiest Christmas shopping days of the year, it was the turn of Topshop (part of the Arcadia Group of Sir Philip Green’s empire) to be shut down. The Arcadia Group includes Topshop, Burton, Dorothy Perkins, Evans and Miss Selfridge.

Sir Philip Green, billionaire boss of Arcadia, who owns Topshop, Dorothy Perkins and Miss Selfridge among others. Arcadia is owned by Taveta Investments Limited, which is registered to an office on the tax-haven island of Jersey. Taveta Investments is owned by Green’s family members living in Monaco, where income tax is 0%. It’s estimated Green avoided paying £285 million in tax in 2005 alone.

– Philip Green’s £285 million tax dodge would have paid for 13,000 new police officers
– The tax dodged by Philip Green could have paid for 20,000 NHS nurses
– To clarify the reports, Philip Green avoided £300 million on his £1.2 billion dividend payout

In the Oxford Street store in London security thugs assaulted protesters. As these assaults were witnessed by several people, including the police, I trust charges for assault will be brought and that the local authority withdraws their registration to work as security guards.

Charges for assault should also be brought against the clearly identified thugs in police uniform who attacked a female. There should be no place for thugs like this in any police force.

But well done the police who did the protesters job for them and shut down Topshop stores.

And the mainstream media? To their credit, the Mail Online had excellent coverage, but from the BBC a deathly silence during the day. No mention on the BBC Radio 4 lunchtime news, but did manage to mention that a bicycle thief had been apprehended through a trail he left in the snow! What then of their flagship PM news slot at 5pm? Er nothing. Out of a half hour prime early evening news, almost 15 minutes on Spanish air traffic controllers strikes (and poor stranded Brits suffering) and tut tut corrupt Fifa not awarding World Cup football to England, several minutes on Oprah Winfrey taking her show to Sydney in Australia, several minutes on Asil Nadir allegedly breaching his bail conditions, a few second mention of climate protesters on the streets of London (blink and you would have missed it) but absolutely zilch on concerned citizens shutting down Topshop stores and the scandal of tax avoidance by the likes of Sir Philip Green and the implications it has for all of us in loss of public services. There was coverage on the BBC Radio 4 6pm news and midnight news but nothing on the main 10pm news. Brilliant coverage by Channel 4 News which once again puts BBC News to shame.

If you could not make it or there was not a protest near you there is still a lot you can do. Go into Topshop and slip a few leaflets into pockets, stick up a few posters in the changing rooms, re-arrange the clothes on the racks, take your purchases to the checkout, offer to pay when Sir Philip Green pays his taxes. But best of all, boycott Topshop!

There is a difference between style and fashion. Style is wearing what you look good in. Fashion is being manipulated into wearing what you look ridiculous in. Fashion is pointless consumerism which the planet cannot afford.

Every weekend until Christmas?

Sir Philip Green says he is doing nothing wrong, nothing illegal. Slave owners used to say something similar!

If Sir Philip Green and other corporate tax dodgers wish to trade in our country then they have to pay our taxes. Otherwise we close them down. Quite simple really.

You steal our taxes, we shut your stores!

websites

UK Uncut

Tax Justice Network

Tax Research UK Blog

False Economy

Also see

The Winner Stands Alone

Shop a Scrounger

Why cuts are the wrong cure

Round up of this weekends Tax Dodger actions

Tax protests hit Topshop, BHS, Vodafone on busy shopping day

Topshop protests over Sir Philip Green’s taxes

Mayhem in Oxford St as protesters target stores including Topshop’s flagship branch over firms avoiding tax bills

We shut down the tax dodgers’ stores – and the shoppers supported us

Topshop’s flagship London store hit by tax protest

The day the teenagers turned on Topshop

Tax protest forces closure of Topshop’s flagship branch

UK Uncut targets Topshop and Vodafone over tax arrangements

UK Uncut targets Topshop and Vodafone over tax arrangements

Sir Philip Green should pay UK tax – Vince Cable

Sheffield Vodafone and Top Shop targeted in tax dodge demo

Oxford Top Shop targeted in tax dodge demo

Oxford St Topshop Shut in #Ukuncut Action

Anti-cuts day of action in Nottingham

Sheffield Occupation and Anti-Cuts Protest

Wood Green Tax Dodgers – Topman & Boots targeted

Shop a Scrounger

December 4, 2010

What do Topshop (Sir Philip Green Arcadia Group), Vodafone, SABMiller (brewers of Grolsch), Boots, Barclays and now Cadbury’s, all have in common? They all dodge their taxes.

We all pay our taxes. We may not like it, but it is part of our civic duty, part of our obligation to the Big Society. But not it seems if we are big enough. If we are big enough or rich enough, we get away with paying little or no tax.

The poorer you are, the more likely you are to be demonised, to be called a scrounger. A whole army of informers and investigators has been enlisted to target these people, shop a scrounger we are told in government media campaigns.

But who are these scroungers? The single Mum who puts in a few hours down the pub to make ends meet, the extra bit of cash-in-hand that makes the difference between her kids having new clothes or not.

A pensioner unable to pay his or her Council Tax is thrown into prison. A small business struggling to meet the tax demand will be put out of business. But if you are rich enough or big enough you pay little or no tax.

It was the greedy bankers who got the economy into a mess. And who bailed them out? The long-suffering taxpayers. And who makes up the shortfall? The poor and disadvantaged by having their welfare cut.

The tax that is not being paid has been calculated to be twice that of the budget deficit. That is if those who did not pay their taxes were forced to do so, not only would there be no need for cuts in public spending, there would be money to spend on railways, on insulating homes, on developing new greener technologies, on providing a national fast broadband infrastructure, on paying students to go to university, for more nurses and teachers, for repair of crumbling schools, for sports facilities for all.

Wealthy people and corporations avoiding and evading tax cost the UK £120 billion per year. That’s enough to cancel out the spending cuts twice over between now and 2014. By contrast, estimated cost of people over-claiming benefits costs the government £1 billion per year – roughly equal to the amount of tax dodged by Barclays Bank alone.

Who are the real scroungers?

Vodafone were let off a £6 billion tax bill. Their financial director just happens to be advisor to the Chancellor on corporate tax.

SABMiller pay less tax in Ghana than a local stall at the market. The tax they do not pay means kids do not go to school.

Barclays have complex tax avoidance schemes in place that make money out of nothing. Money that you and I pay for for with lost tax revenue.

Boots head office is a PO Box in Switzerland. Boots is owned by a hedge fund.

Cadbury’s, now American owned, a buyout financed by taxpayer-owned RBS, looks set to follow the example of Boots.

Sir Philip Green (owner of Arcadia, owner of Topshop) avoided £300 million on his £1.2 billion dividend payout by paying it through his wife who is resident in Monaco. Green is government adviser on cutting waste, ie code for public spending cuts.

Today Topshop stores across the country were shut down in protest. In London, Topshop security thugs attacked protesters in full view of police witnesses. Will the police be bringing charges for these assaults?

And the media? To their credit, the Mail Online had excellent coverage, but from the BBC during the day a deathly silence. No mention on the BBC Radio 4 lunchtime news, but did manage to mention that a bicycle thief had been apprehended through the trail he left in the snow. What then of their flagship PM news slot at 5pm? Er nothing. Out of a half hour prime early evening news, almost 15 minutes on Spanish air traffic controllers strikes (including sob story of stranded Brits) and tut tut Fifa not awarding World Cup football to England, several minutes on Oprah Winfrey taking her show to Sydney in Australia, several minutes on Asil Nadir allegedly breaching his bail conditions, a few second mention of climate protesters on the streets of London (blink and you would have missed it) but absolutely zilch on concerned citizens shutting down Topshop stores and the scandal of tax avoidance by the likes of Sir Philip Green and the implications it has for all of us in loss of public services. But there was coverage on the BBC Radio 4 6pm news. Channel 4 News once again put BBC to shame.

websites

Tax Justice Network

Tax Research UK Blog

False Economy

Also see

Topshop day of action against tax dodger Sir Philip Green

Why cuts are the wrong cure

How SAB Miller escapes tax in developing countries

Grolsch tax avoidance

Mayhem in Oxford St as protesters target stores including Topshop’s flagship branch over firms avoiding tax bills

Tax protests: at last people have a way to express their anger

Cadbury’s secret Swiss move will cost UK exchequer millions in tax

Topshop’s flagship London store hit by tax protest

The day the teenagers turned on Topshop

Haringey Vodafone unpaid tax protest

Grateful Vodafone executives say a big thank you to Chancellor George Osborne

Nationwide shut down of Vodafone stores

Vodafone £6 billion unpaid tax bill

Cadbury goes Swiss to avoid British tax: Move by U.S. bosses will cost Treasury £60 million a year

UK Uncut targets Topshop and Vodafone over tax arrangements