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back to article Oracle, Dell, CSC, Xerox, Symantec accused of paying ZERO UK tax

Tech giants Oracle, Xerox, Dell, CSC and Symantec paid no corporate tax in the UK last year despite pocketing nearly £500m from public-sector IT contracts, it was claimed last night. According to a study undertaken by Charlie Elphicke, Conservative MP for Dover, the five US behemoths banked taxpayers' cash and had a combined …

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  1. Anonymous Coward
    Anonymous Coward

    Why do they keep on talking about "sales" and then rambling on about Corporation tax, surely VAT is the tax directly associated to sales? So are they or are they not paying VAT?

    Corporate Tax I thought was on actual profit, after paying down as much profit as possible?

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    1. Antony Riley
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      VAT?

      VAT is only payable at the point of sale.

      Online sales use the VAT of the source country (EU to EU).

      I.E. Resellers pay VAT, and any VAT these companies do pay is going to mostly be in the country the item is sold from. Also services in the UK do not attract VAT (e.g. support contracts).

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      1. Antony Riley
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        Re: VAT?

        Furthermore, if the end customer is a VAT registered business they will claim any VAT back, not to mention that their UK operations will claim back VAT on anything they buy, it would surprise me if the VAT man actually paid these companies money rather than the other way around.

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  2. Demosthenese

    Morals and the Law

    The moral person requires no laws, for he knows what is right and acts acordingly. Laws are put in place for the immoral and the wicked to force them to behave in a minimally acceptable manner. Those bleating that they obeyed the letter of the law and thus have done no wrong are clearly members of the latter groups rather than the former.

    It is time to reach for a bigger legal stick with which to beat the wicked back on to the right path.

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    1. magrathea
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      Re: Morals and the Law

      "The moral person requires no laws, for he knows what is right and acts acordingly. Laws are put in place for the immoral and the wicked to force them to behave in a minimally acceptable manner."

      How does this concept map to the amount an individual should give to the government? Taxation has to be only a matter of 'the rules' because normally there is no culturally accepted requirement to hand over large amounts of cash ...just because

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      1. Anonymous Coward
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        Anonymous Coward

        Re: Morals and the Law

        "How does this concept map to the amount an individual should give to the government? Taxation has to be only a matter of 'the rules' because normally there is no culturally accepted requirement to hand over large amounts of cash ...just because"

        once the govt (national, regional and local) proves beyond doubt that it isn't wasting a single penny, not overpaying people (ie not a single manager who is earning more than min wage without proof he can do a "hands on" job), and not a single over-billing "outsourcing" firm involved,(Crapita) comes to mind), then the handing over of cash should happen immediately.

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  3. Anonymous Coward
    Anonymous Coward

    Money laundering

    The companies are just laundering their profits, the same as drug dealers. Looking at the actions of Barclays, HSBC and HBOS, the British banking system is fully behind them.

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  4. Anonymous Coward
    Anonymous Coward

    Taxing global profits

    A Kitemark will make precious little difference. This is a problem caused by trying to tax global companies on just their UK operations, and you can't blame them for trying to do whatever is LEGAL to minimize their tax liabilities.

    One solution would be to make some big changes to tax law (for example outlawing the unrealistic transfer pricing which is the mechanism used by many of these companies to transfer profits to low tax jurisdictions). I would also stop the use of royalty payments as a mechanism for transferring profits as it so easy for a company to say that it's intellectual property is 'owned' in a tax haven and have bloated royalty payments sent there. These should always be taxed in the country where the revenue is earned. And I'm sure may quite small UK companies do this too, it's not just the big multinational corporations.

    But these kind of changes may take years to put into effect, particularly if they require changes to international treaties . A more radical approach would be to offer companies the choice to either pay tax on just their UK business (as now), or to pay tax based on their global profits, taxing a percentage of their global profits in proportion to their UK revenues. Companies could be given an incentive to use this new approach, for example by having differential tax rates (eg 40% using the old approach and 20% using the new approach). This would encourage companies to move quickly across to a 'global' approach to tax while not breaking international treaty obligations as there would still be the option of doing it the 'old' way - at least until the rest of the world could catch up with this new global approach to taxation.

    And a company which had no operations outside the UK would be able to submit the exact same accounts as UK-only and as global accounts, so could very easily use the more advantageous global tax rate.

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