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HMV sought insolvency protection last night, becoming the second big name retailer on the battered British High Street to come close to defeat in the first few weeks of 2013. This comes after the music retail giant spent several years struggling to turn its business around as customers have increasingly shifted to shopping …

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Wonder how much tax HMV paid

... in comparison to Amazon.

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Re: Wonder how much tax HMV paid

Since they made a loss, presumably none at all. That's how tax works...

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Re: Wonder how much tax HMV paid

Wonder how much tax HMV paid in comparison to Amazon.

Even if they hadn't been losing money, as others have pointed out, the answer would be "as little as humanly possible", like any company worth its salt.

Seriously, I'm going to start forwarding posters like you to the "Tax Bores" section of the Speak You're Branes archive. Company in "legally reducing tax bill" shocker, film at 11.

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FAIL

Re: Wonder how much tax HMV paid

"So Amazon did pay more tax than HMV."

You're forgetting about business rates. Companies have to pay them no matter what. And business rates thanks to our beloved leaders are currently huge. 4000 quid per square metre in some cases.

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Re: Wonder how much tax HMV paid

Phew that was close. I was just missed by an out of control bandwagon.

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Re: Wonder how much tax HMV paid

"Even if they hadn't been losing money, as others have pointed out, the answer would be "as little as humanly possible", like any company worth its salt.

Seriously, I'm going to start forwarding posters like you to the "Tax Bores" section of the Speak You're Branes archive. Company in "legally reducing tax bill" shocker, film at 11."

You almost seem proud that these companies are doing all they can to limits of the letters of the law, and well beyond the spirit or the intention, to profit at the expense of, ultimately, everyone else including you and me.

People are going to lose their jobs over this over this and even if you don't give a shit about them surely you are irked at the idea of having to support them.

I see no reason to congratulate companies for legally reducing tax bills regardless of the consequences just because there is no option (or reason if you prefer) to punish them. It is done to our detriment and we should be pissed off about it.

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Anonymous Coward

Re: Wonder how much tax HMV paid

It is done to our detriment and we should be pissed off about it.

No it's done for the benefit of the companies, which benefits the shareholders of those companies (e.g. pension funds, other companies etc), and ultimately the employees of those companies. It may seem detrimental at the moment because of all the austerity measures, but when the economy is going well it's not a problem.

If the government was seriously bothered about it they'd sort the tax legislation out, but that would likely have an adverse affect on the economy.

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Re: Wonder how much tax HMV paid

I can think of another company that made a loss...Starbucks wasn't it?

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Re: Wonder how much tax HMV paid

So... tell us how much extra tax you have voluntarily overpaid for the benefit of the rest of us then?

To paraphrase the late Kerry Packer: "If someone is paying more tax than they are legally required then they need to have their heads read. It's not as if the Government is spending it so wisely we should donate extra".

If you have extra money to give away then give it to a Charity if you want to make a real difference (at least it's more likely to benefit the needy than giving it to Parliament....)

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Re: Wonder how much tax HMV paid

So, if your line of argument is correct then, no doubt, when HMRC last contacted you advising you of your tax code you contacted them and asked them to jack it up a bit as you felt you were not paying enough tax??

Doubt it, no-one wants to pay more tax than they have to, if a company does then that means less money to go around (one of which is less/no pay raise), but I'm sure you would accept that without moaning right?

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Anonymous Coward

Re: Wonder how much tax HMV paid

They shift the tax burden from the business to the employee. But ultimately it results in higher bills for everyone since vital infrastructure work (electric, gas etc) is then paid for out of extra charges made by the energy companies instead of being funded by government.

In the worst case we get PFI where the interest rate makes the payments staggering. A council is Wales still has about £10 million left to pay on some houses they built in the 1970s!

We need slower sustained profits by companies, not the get rich quick and then fail model that seems to be in place right now.

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Anonymous Coward

Re: Wonder how much tax HMV paid

None, I pay what is taken by PAYE. I can't do anything to fiddle that.

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Meh

Re: Wonder how much tax HMV paid

I love you tax avoidance appeasers. Granted, nobody should pay more tax than they owe by law. Amazon avoiding taxis is equivalent to a very rich murderer getting away with it due to a technicality that can only be revealed by a horde of blood sucking parasetical lawyers manuipulating natural lanagage and bending the legalease until they get their vermim off the hook.

It doesn't make it right, it makes it 'legal' in a very loose sense (before the loop hole is plugged and deemed illegal a week later).

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Anonymous Coward

Re: Wonder how much tax HMV paid

"No it's done for the benefit of the companies, which benefits the shareholders of those companies (e.g. pension funds, other companies etc), and ultimately the employees of those companies."

Trickle-down, neo-classical economics and known to be utter, utter bullshit.

Along with externalisation of costs (e.g. expecting the public to cover a private cost).

Oft repeated by those whose sole interest is to enrich the rich and impoverish the poor.

And people wonder why we have terrorists...

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Re: Wonder how much tax HMV paid

As RYE says above, you can always request to increase your tax code if you feel strongly enough about tax minimization being wrong..... In fact, why doesn't everyone do that......

What's that you say? Because they are not morons?

Wait a second......

Oh my god!! We live in a nation of 40 million tax minimizers. Bastards!

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Re: Wonder how much tax HMV paid

>Oh my god!! We live in a nation of 40 million tax minimizers."

Of course we do, which is why we should lobby our MPs to change the tax laws.

Never happen though.

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Re: Wonder how much tax HMV paid

"So... tell us how much extra tax you have voluntarily overpaid for the benefit of the rest of us then?"

Quite a lot, like all of us here have done.

If I had an accountant, I'm pretty sure he could figure out a dozen ways of reducing my tax bill. The difference is that firstly it's not worth the cost of the venture, as I'm an individual not a company.

And secondly because morally I don't agree with doing so. So please don't be keen to judge everyone by your own standards.

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Re: Wonder how much tax HMV paid

"Amazon avoiding taxis is equivalent to a very rich murderer getting away with it due to a technicality that can only be revealed by a horde of blood sucking parasetical lawyers manuipulating natural lanagage and bending the legalease until they get their vermim off the hook."

Really?!?! You honesty think that's a good comparison, WOW, swinging wildly and making stuff up is very hard to counter with facts, so I'm not even going to bother.

"It doesn't make it right, it makes it 'legal' in a very loose sense (before the loop hole is plugged and deemed illegal a week later)."

Last time I checked legal means legal until it is made illegal. When it is I'll be right behind HMRC for bringing a court case, until that point it is still legal, despite popular opinion.

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Re: Wonder how much tax HMV paid

You should look into that. It's well worth getting an accountant to run over your affairs because, on PAYE, if you do that once you get your Tax Code changed permanently (at least, until your situation significantly changes). One set of accountants fees, years of paying lower (read "correct") levels of tax.

Of course if you think it is more moral to give extra money to the Government to spend on bankers, wars, duck houses and moats rather than enriching your own family or (if you don't need it yourself) a deserving charity then good for you.

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Re: Wonder how much tax HMV paid

If I had an accountant, I'm pretty sure he could figure out a dozen ways of reducing my tax bill. The difference is that firstly it's not worth the cost of the venture, as I'm an individual not a company.

And secondly because morally I don't agree with doing so. So please don't be keen to judge everyone by your own standards.

I do. :-)

The government, via one method or another, takes at least half of your money as tax. They then put it through a process of monumental wastage, at the end of which you will see a pithy amount in return. The minute you give a quid to the government (and this goes for any government, not just ours) then you can kiss a decent amount of that money goodbye.

In a system where we are constantly reamed for more and more tax to pay for a ludicrously large public sector and hilariously mismanaged government spending, I think it's completely moral to try and keep as much of your money your own as possible. Last time I checked, we live in a capitalist society. If you set the rules, and I take advantage of those rules (without breaking them) to make life better for myself, I'd call that a success, not an immorality. Don't like it? Re-write the rules and cut wastage.

People want to give all their responsibi-I mean, money to the government, and have them handle everything. Doesn't work, unfortunately.

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Re: Wonder how much tax HMV paid

forgot VAT, which HMV were billing UK customers at 20% and paying to HMRC at 20% while Amazon etc. are billing customers in UK at 20%, yet paying to Belgium at a much lower rate and pocketing the difference...

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Re: Wonder how much tax HMV paid

And I've often wondered how, with these perennial losses, they are still in business.

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Re: Wonder how much tax HMV paid

"It is done to our detriment and we should be pissed off about it."

Nope, it's done (partly) to our benefit. You think that if Starbucks et al were paying higher rates of tax that their prices would stay the same?

Anyone who ever used CD Wow or Play.com to effectively avoid paying tax (prior to them changing that rule) are probably blissfully unaware that's what they were doing.

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Re: Wonder how much tax HMV paid

That should have been attached to the post about Starbucks.

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@Reading Your E-mail

Of course Reading Your E-Mail...the law is black and white...the government just make these loop holes on purpose. I wish I lived on your planet.

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Re: Wonder how much tax HMV paid

Amazon was avoiding pay corporation tax. This is a tax on PROFIT. HMV's problem is that it was nowhere near having any in the first place.

What Amazon *was* doing, was exploiting small consignment relief on imports of media supplied from the Channel Islands. For all I know, perhaps HMV was doing this as well for mail order? Just about everybody else was at the time. This loophole was closed earlier in the year, and that's done nothing for HMV.

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Bod

Re: Wonder how much tax HMV paid

Time to dig out the old classic quote...

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

Lord Clyde (1929)

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Bod

Channel Islands

"For all I know, perhaps HMV was doing this as well for mail order? Just about everybody else was at the time. This loophole was closed earlier in the year, and that's done nothing for HMV."

Indeed they were as I remember and it's harmed them, likewise Play.com amongst others.

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@Reading Your E-mail

"Really?!?! You honesty think that's a good comparison, WOW, swinging wildly and making stuff up is very hard to counter with facts, so I'm not even going to bother."

Is this an answer? So explain to me how hiring expensive accountants to find ways of evading tax law is not the same as murderers hiring expensive lawyers to find ways of evading criminal law? Both are amoral, both know exactly what they are doing (exploiting a system set up in good faith where the law abiding follow, and they manipulate). I can't quite see coherent argument in your attempt at insult.

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Anonymous Coward

Re: Wonder how much tax HMV paid

"It is done to our detriment and we should be pissed off about it.

No it's done for the benefit of the companies, which benefits the shareholders of those companies (e.g. pension funds, other companies etc), and ultimately the employees of those companies."

In this context the for and to are not mutually exclusive.

The reason for tax minimisation is to benefit the shareholders (not necessarily the employees) but it is done to the detriment of the general public.

Companies have a huge amount of their operating costs covered by the state - education, healthcare, policing, defence, infrastructure etc. - which are funded through taxation.

Tax minimisation to zero is often lauded as a "goal" of all companies - and I cant disagree with that, which is why stronger government regulation is needed.

In effect paying no UK tax means that a company with UK employees, gets the advantage of not having to pay for their education, for the roads they travel on to get to work, for the healthcare system which keeps the employees working, for the transport infrastructure which delivers their goods, the police which protects the company from crime (and disgruntled employees...) and the military which defends their nation.

Meanwhile, all of this is still needed, so it ends up being taxed elsewhere - or "vital" public services fail as a result.

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Anonymous Coward

Re: Wonder how much tax HMV paid

Nope, it's done (partly) to our benefit. You think that if Starbucks et al were paying higher rates of tax that their prices would stay the same?

Broadly - with some minor variation. If they hiked the prices they would pay more VAT (which tends to be more aggressively enforced than Corporation Tax) and at the end of the day CT is a tax on profits, so strangling the customer to get more money would still mean more tax.

Prices might go up a little, but too much and people will stop drinking at Starbucks and going to other shops which are able to offer the same service at a lower price - maybe by not paying a fortune to "Licence" the brand name.

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Re: Wonder how much tax HMV paid

>To paraphrase the late Kerry Packer: "If someone is paying more tax than they are legally required then they need to have their heads read. It's not as if the Government is spending it so wisely we should donate extra".

If you have extra money to give away then give it to a Charity if you want to make a real difference (at least it's more likely to benefit the needy than giving it to Parliament....)

Only Kerry Packer didn't make any big donations to charity. Dick Smith tried to cajole him and other Aussie millionaires into it, but they said "We don't show off like you, Dick, we do it anonymously..."

So, Dick Smith contacted all the major Aussie charities, and they all told him that they just don't receive massive anonymous donations.

Dick Smith was the man who jumped a double decker bus over fifteen motorcycles, as a 'homage' to Evil Knievel.

http://en.wikipedia.org/wiki/Dick_Smith_(entrepreneur)#Population_policy_activism

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Anonymous Coward

Re: Wonder how much tax HMV paid

"Yes. Absolutely! If a company is profitable, well managed, has a solid and (perhaps) agile business there is no need other than greed to seek to reduce tax liability."

Indeed, the businesses scream "It's capitalism! It is our right to pay nothing!" and the nation suffers, the people suffer. Sure the government may be making mistakes, but lower tax receipts are not helping matters. The businesses hiding their profits overseas so there is no "trickle-down" (vomit) doesn't help either.

Then said companies hit trouble and they go screaming to the populace they have just (effectively) defrauded "Help us! We need you money (again) we are too big to fail!" and although the people see it for what it is, the government bails them out. A socialist action!

A capitalist government would have let them fail.

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Anonymous Coward

Re: Wonder how much tax HMV paid

"Doubt it, no-one wants to pay more tax than they have to,"

Wrong! I for one run a business that in no way seeks minimise it's tax liabilities - although it could.

Call me mad if you like, but the business supports me and a fair few others with a good lifestyle, whilst happily paying it's full tax burden. It's a private limited company so perhaps not quite under the same shareholder cosh.

I'm no socialist, but I'm no raving capitalist either. Maybe I'm just an idealist. Whatever I am, I am happy for me and the business to meet the full tax burden.

"...if a company does then that means less money to go around (one of which is less/no pay raise) but I'm sure you would accept that without moaning right?"

Yes, I would. Absolutely!

Not only that, if necessary I would personally forego any pay rise and would even take a salary cut if it meant that staff would be guaranteed one - if funds were tight.

If a company is profitable, well managed, and is agile enough there is no need other than greed to seek to reduce tax liability.

Some would say a flawed philosophy. I would counter that it's a socially responsible philosophy.

Of course, if things were looking difficult just over the horizon, I would consider reducing the tax burden but as a temporary defensive measure only.

Ultimately though you can't blame a company for reducing their tax burden if the system allows it. Should this area be tightened up legally? Yes it bloody well should!

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Re: Wonder how much tax HMV paid

@Greg

That's great, until you start using any wholly or partially tax-funded infrastructure. Like, I dunno, roads. Or any transport sector which is wholly or partially tax-funded. Or any resource distribution service (water, power, sewage) which is wholly or partially tax-funded. Or (and this is the bugger) you start dealing with any company or individual who relies on said infrastructure or service that is wholly or partially tax-funded.

The problem with your assertion that government are crap at doing stuff is that we've also seen, to some extent, the private sector be crap at doing stuff. The fact that it's theoretically possible to compete doesn't prevent World Class Bellends (Category: Felonious) like Capita from bidding on, being awarded, and subsequently hugely ballsing up large-scale projects.

I posit to you the alternative assertion that you claim you want to minimise your tax burden while being entirely willing to parasitically make use of infrastructure and services funded by those of us who don't have a problem with contributing via taxation to the society in which we live. In which case, I'm primarily wondering why you haven't moved to the USA, their particular brand of "freedom" and economic policy would appear to be entirely in keeping with your philosophy.

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Re: Wonder how much tax HMV paid

forgot VAT, which HMV were billing UK customers at 20% and paying to HMRC at 20% while Amazon etc. are billing customers in UK at 20%, yet paying to Belgium at a much lower rate and pocketing the difference...

Which would be a compelling argument if VAT was not charged where the sale was actually made, i.e. here in Blighty. It's like that all over the EU in order that the single market actually works. In any case the standard rate of VAT is actually lower here than in Belgium and we have far more zero-rated categories than most of Europe to boot. What you actually mean is:

I heard something about corporation tax recently but didn't understand it so made up a different story to complain about. Who cares that it isn't actually true.

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Anonymous Coward

Re: Wonder how much tax HMV paid

Yes, you're so right. And if only there was a group of people in a high position in our country who had the power to control things like this, such as by changing tax laws. Sigh.

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Re: @Reading Your E-mail

> So explain to me how hiring expensive accountants to find ways of evading tax law is not the same as murderers hiring expensive lawyers to find ways of evading criminal law?

Erm, murder is against the law. How about that for a start?

You really are a cretin.

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Re: Wonder how much tax HMV paid

>"...Only Kerry Packer didn't make any big donations to charity..."

Wrong. Kerry Packer made lots of donations. The NSW Ambulance Service defibs are the one example that everyone knows about - but that aside, he gave regularly to hospitals in and around Sydney for years.

(Note that you may be confused here; the Kerry Packer quote is enclosed in - funnily enough - quotation marks. The bit about donating any extra cash to charity rather than funding the Government was my own suggestion, although I am sure KP had similar sentiments)

If you are going to invoke serial self-promoter Dick Smith why don't you mention his stunt from 2008 when he wrote to the ATO ( in an open letter, which seems to be the only way Dick can say anything ) saying that he intended to "do a Packer" on his tax from then on as he was sick of government waste? Even he seems to agree that it is better to control his excess funds and channel them where they will do some good rather than blindly hand them to the taxman.....

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Re: Wonder how much tax HMV paid

>Wrong! I for one run a business that in no way seeks minimise it's tax liabilities - although it could.

So:

1) You don't claim operating costs as an expense?

2) When you make a cross border sale within the EU, you write to the Tax Office in the other state offering to pay any differential tax that they would have collected had you been based in their jurisdiction?

3) You pay your employees out of your after-tax profits rather than claiming their wages as a deduction against your profit?

No?

I didn't think so......

That's all minimisation of your tax liability.

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Re: Wonder how much tax HMV paid

They pay 20% VAT on their sales though, unlike Amazon's Channel Islands based Indigo Starfish which sold CDs and DVDs until the VAT loophole was closed and the Luxembourg based Amazon MP3 store which pays 3% VAT.

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Re: @Reading Your E-mail

"Erm, murder is against the law. How about that for a start?"

If you get away with it on a legal technicality relating to your arrest (as the OP was suggesting) then it isn't. Which is the point.

Tax avoidance may well be legal, the question is really whether it is ethical and a great many people think it is not.

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Re: @Reading Your E-mail

"find ways of evading tax ", is against the law. What has been discussed here is paying the legally required tax according to the law of the land. There is no right or wrong amount, just correct or incorrect. This is not a moral issue, it is a legal issue. If you want to make it a moral issue I suggest that you look at living in a theocracy. I understand there are several in the middle east that would provide examples of what it's like.

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Re: @Reading Your E-mail

"find ways of evading tax ", is against the law. What has been discussed here is paying the legally required tax according to the law of the land. There is no right or wrong amount, just correct or incorrect. This is not a moral issue, it is a legal issue.

Evading tax is illegal, however the point here isnt clear cut evasion, it is dodgy tax minimisation approaches.

For example, if you set up a parent corporation in a low-tax country then transfer your companies assets and claim it charges you an inflated price to use the brand / assets, you can claim this as a cost of doing business and legally minimise your tax burden in the UK. This is not against the law, it is just often a complete fabrication with no purpose other than to avoid tax.

This allows you to - as others have said - take advantages of the things paid for in the UK by taxpayers (roads, healthcare, policing, fire brigade, educated workforce etc) while not paying into the tax system yourself.

Legal but immoral.

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It was only a matter of time

A slimmed down HMV may work, but I'm not sure. The assaults of the supermarkets and online are getting pretty powerful.

Has anyone set up a "dead pool" of companies - or even types of companies - yet?

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Re: It was only a matter of time

Somebody had an accumulator on Jessops, HMV and Thatcher.

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Anonymous Coward

Re: It was only a matter of time

Yes, Hedge funds always have a dead pool: The current top ten shorted shares by hedge funds are (by % of shares out on loan):

1. Home Retail Group - 21.4%

2. W H Smith - 15.6%

3. Weir Group - 15.2%

4. Ocado - 13.9%

5. Carpetright - 12.2%

6. JKX Oil & Gas - 11.1%

7. Dixons - 10.2%

8. Thomas Cook - 7.9%

9. Premier Foods - 6.1%

10. Admiral - 6.0%

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Anonymous Coward

Re: It was only a matter of time

My money's on WHSmiths being next... haven't bought anything from them (or had a need to) for utterly yonks. I mean, what do they actually sell that you can't get from a supermarket or Amazon or one of those cheap book outlets (that also do stationary and art supplies). And odd, anchronistic, chain...

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