Tag: tax

Government about to damage IT investment with tax reform

Posted on January 10, 2020 by - News

The government’s  IR 35 reform is going to seriously damage the IT industry according to Simon Winfield, UK and Ireland MD at global recruitment firm Hays.

The government has refused to delay the April start date of the reforms and is only going through token London-centric consultation exercises which it appears keen to ignore.

Winfield warned: “If they are undertaking additional consultation now until mid-February and the reforms are coming into effect from April, there simply isn’t enough time to give this the attention it so desperately needs,” he said.

He said that introducing the new laws on 6 April will counter any investment in this area. A number of industries are suffering from niche skills shortages and these reforms could worsen these gaps. The IR35 reforms will hit technology harder than any other market and introducing them will counter any investment in this area.

Changtel boss disqualified for 13 years

Posted on March 10, 2017 by - News


taxman sheet musicFormer owner of Changtel Solutions UK Jason Tsai has been barred from being a company director for 13 years after being caught participating an VAT fraud.

Changtel owed millions of pounds to HMRC, after the outfit participated in transactions which related to the fraudulent evasion of VAT between 29 June 2007 and 10 December 2010.

The fraud involved batches of high-value components shipped between companies in different parts of the EU. The fraudsters charge VAT on the sale of the goods but do not pay this back to the relevant governments and then in most cases disappear or shut up shop.

Between 2007 and the close of 2010, ETL was involved in 107 wholesale transactions, 79 of which HMRC claimed were traced back to “defaulting traders”, incurring tax losses of at least £15.6 million.

A further 25 were tracked to defaulting suppliers, via a contra trader, and those defaulting traders incurred tax losses of £5.4m to HMRC.

“Tsai caused or allowed ETL to wrongfully claim input VAT of at least £19.5 million from HM Revenue and Customs in relation to the [fiscal] 2007 to [fiscal] 2010 VAT periods,” the IS document stated.

Changtel was finally wound up in 2015, but before this Changtel sold several assets to Entatech in 2013, another company with links to Tsai. These transactions were disputed by HMRC.

Entatech itself was sold to Stevinson Capital in 2015, which reached a settlement early last year. Tsai is not involved with the business since.

Italians about to charge Apple with tax evasion

Posted on March 24, 2015 by - News

iconItalian police are about to finger the collar of the fruity cargo cult Apple which owes the Italian government nearly a billion dollars in unpaid tax.

Italian prosecutors have wrapped up an investigation into allegations US tech giant Applefailed to pay corporate taxes to the tune of $964 million.

The investigation apparently now has enough evidence to ask a judge to drag Apple kicking and screaming into a court room.

The investigations, covering the period 2008-2013, involve two managers from the Italian subsidiary of Apple operations and one from its Irish-based subsidiary Apple Sales International, the sources said.

The probe claims that by having profits generated in Italy booked by the Irish subsidiary, Apple reduced its taxable income base and saved just under 900 million euros in the period, the sources said.

Apple said it was one of the largest tax payers in the world and paid every euro of tax it owed wherever it did business. Although that is a stretch of the truth. It might be obeying tax law by funnelling funds through Ireland or Luxemburg but it is certainly not paying every cent it should be paying.

It said the Italian tax authorities had audited Apple’s Italian operations in 2007, 2008 and 2009 and confirmed it was in full compliance with the OECD documentation and transparency requirements.

“These new allegations against our employees are completely without merit and we’re confident this process will reach the same conclusion,” it said.

Tax authorities have pledged to crack down on domestic and multinational companies in moves that could help shore up stretched public finances and sort out the country’s financial problems.

Google reorganises in EU

Posted on February 27, 2015 by - News

330ogleThe search engine also known as Google is restructuring its European businesses to cope with the fact that the EU might want it to be a little more reasonable on privacy and anti-trust issues.

Google merged its two European regional divisions claiming it needed to “meet the challenges of tougher regulation across the continent”,

The internet giant is merging its northern and western European division with the unit covering southern and eastern Europe, Middle East and Africa.

The move will simplify the organisation, both for commercial reasons as well as to work more effectively with business partners and policy makers.

The tax-friendly Dublin will still remain as Google’s Euro-base, and the reorganisation will not result in job losses, the source said.

Google has been given a good kicking by European Commisioners for its tax avoidance antics and tendency towards what the EU considers playing fast and loose on privacy matters.

In response, Google has argued that for Europe to remain competitive in global markets, it needs to form a single digital market instead of relying on national regulations in its 28-member states that often act to protect local industries.

It appears that Google is pinning its hopes on former British Olympic rower Matt Brittin to sort out the mess. Brittin led Google’s northern and western European division and will head up the combined Europe, Middle East and Africa operation while Carlo d’Asaro Biondo, formerly head of the other regional unit, will take on a strategy role.

D’Asaro Biondo is a former media suit who worked for Lagardère, AOL Europe and computer services company Unisys, will continue to work from Paris.

He will manage Google’s strategic partnerships in the region, which include working to deepen ties with newspaper publishers, telecom operators and carmakers.

Brittin has packed his executive bag and headed to Brussels to argue the company’s case that it serves as a growth engine for European business, especially for small and medium-sized enterprises, because the Internet helps create a level playing field. But then again so do monopolies only the bloke owning the level playing field makes a fortune renting it out for others to play on.

Microsoft sues the US taxman

Posted on November 25, 2014 by - News

MSlogoSoftware giant Microsoft has sued the US taxman as part of a move to find out about a law firm hired by US tax authorities in a review of how the software company books sales between subsidiaries.

Vole claims the IRS entered into a contract this year with Quinn Emanuel Urquhart & Sullivan, which specialises in litigation. The agency is paying Quinn Emanuel more than $2 million in connection with its examination of Microsoft tax returns between 2004 and 2009, the court filing said.

Microsoft wanted more information, but the IRS had not fulfilled a Freedom of Information request seeking the complete Quinn Emanuel contract and other documents.

“Government agencies, funded by citizens, have an obligation of transparency under the Freedom of Information Act,” Microsoft said in a statement.

At issue are how multinational corporations value goods and services moving across international borders from one of their units to another. These cash transfers frequently reduce a corporation’s global tax costs.

The IRS has scrutinised technology companies, including Microsoft and Amazon over how they account for such transfer pricing and it appeared to using Quinn Emanuel.

That outfit represented the Federal Housing Finance Agency in high-profile lawsuits against financial institutions, including Goldman Sachs Group over the quality of mortgage-backed securities they sold before the financial crash.

It seems a little odd that Microsoft, instead of being concerned about a potential IRS investigation is going to court to find out who the taxman is hiring as his lawyers.

 

Verizon paid its CEO more than it did the taxman

Posted on November 18, 2014 by - News

taxman sheet musicIf you want to know how silly the tax avoidance of US companies has become, you only need to look at Verizon.

It paid its CEO Lowell C. McAdam more than it paid the in U.S. federal income taxes.

According to a study compiled by the Institute for Policy Studies and the Center for Effective Government, which has been denied by Verizon, it was one of seven companies paid their CEO more than they paid in tax,  including Boeing, Ford, Chevron, Citigroup, JPMorgan Chase & Co and General Motors Co.

The study said the seven companies, which in 2013 reported more than $74 billion in combined U.S. pre-tax profits, came out ahead on their taxes, gaining $1.9 billion more than they owed.

At the same time, the CEOs at each of the seven companies last year was paid an average of $17.3 million.

The Institute for Policy Studies and the Centre for Effective Government, the study’s co-authors, said its findings reflected “deep flaws in our corporate tax system.”

Verizon insisted that it paid $422 million in income taxes in 2013. “We do not provide a breakdown between federal vs. state in that total; however, I am confirming for you that the federal portion of that number is well more than Verizon’s CEO’s compensation,” a spokesman said in an email.

Boeing said its 2013 global tax bill was $1.6 billion, though all but $5 million was deferred due to development and production investments. A spokesman said current tax expense and cash taxes were likely to rise as 787-jet deliveries ramp up.

Both automakers Ford and General Motors said their current U.S. tax bills are reduced by tax loss carry forwards stemming from severe losses suffered a few years ago.

Energy group Chevron said its 2013 current U.S. federal income tax expense of $15 million “was much lower than normal” due to several factors. Echoing other companies, Chevron stressed it pays taxes worldwide.

Either way it appears that there is something wrong with the US tax system, which seems to focus on taxing the poor and middle class while the rich and corporates avoid paying.

Bono sells Robin Hood image to defend Apple

Posted on October 13, 2014 by - News, Opinions

bono-cash-facebookSuddenly it is hard to use the words “credibility” and “Bono” in the same sentence.

The U2 popular beat combo  artist  has done his best to champion all the right causes over the years. He has been a significant leader in the fight against poverty, and has helped to create the ONE Campaign, DATA, (RED) and EDUN, a clothing company which is striving to stimulate trade with poverty stricken countries. He has been nominated for the Nobel Peace prize three times for his efforts to help the poor.

This is why the U2 frontman stepping in to defend Apple’s method of screwing up the tax system of Europe is particularly hypocritical and nasty.

Bono is currently in a business partnership with Jobs’ Mob so having him stand up this weekend and defend Apple’s right to save a bob or two by shafting the health and welfare policies of the EU damaged any lefty street cred that the former 80s rocker might have had.

The U2 frontman believes large companies that avoid paying billions in taxes bring prosperity, rather than harm the economic growth of the country. Unfortunately, Bono, they do not.

Apple has paid an average tax rate of 2.5 percent over the past five years, despite turning over a profit of around $109 billion. This is a fraction of Ireland’s standard tax rate of 12.5 percent.

While Ireland was busy making its deals with big technology companies like Apple to act as a tax haven, the country was going through its biggest debt crisis ever. Apple might have provided jobs in Ireland, but its impact on the Irish economy has been minimal.

Bono said that Ireland was a tiny little country, which did not have scale, and our version of scale is to be innovative and to be clever, and tax competitiveness has brought our country the only prosperity we’ve known.

“We don’t have natural resources; we have to be able to attract people.”

Because of its generous tax allowances, he added, Ireland has reaped the benefits of “more hospitals and firemen and teachers because of the tax policies.”

Now this is a bit of rubbish from the bloke who was nominated for a Nobel Peace Prize in 2003 for his campaign to alleviate world debt. Tax avoidance schemes rarely help the economies of any nation and take away cash from countries that need the cash.

Ireland might not have attracted the likes of Jobs’ Mob, or Google, or other tax avoiders, but it would have had a fair taxation system. The other countries in the EU which Apple was avoiding paying tax would be able to afford betters health care standards, teachers and firemen.

 

 

Microsoft keeps its cash offshore

Posted on August 25, 2014 by - News

bahmasSoftware giant Microsoft is storing pots of cash away from the US government tax man.

According to disclosures in the company’s most recent annual filings with the Securities and Exchange Commission Redmond is sitting on almost $29.6 billion it would owe in US tax collector if it bought $92.9 billion it has stored in its off-shore bank accounts.

The cash would amount to almost the entire two-year operating budget of the company’s home state of Washington.

Microsoft insists that it is not avoiding tax and that the money it keeps out of the US is “reinvested outside the US.

However, it does look more as if the company is using tax shelters to dodge the taxes it owes as a company domiciled in the United States.

Microsoft’s SEC filing is turning up just when the US government is under pressure to do something about the fairness of U.S.-based multinational corporations using offshore subsidiaries and so-called “inversions” to avoid paying American taxes. Such manoeuvres although often legal threaten to reduce US corporate tax receipts during an era marked by government budget deficits. However if US politicians do anything about it, they are almost certain to lose all their campaign contributions from big corporates.

 

Oregon wakes up to deal with Intel devil

Posted on August 22, 2014 by - News

satanic pactIt seems that people are starting to add up the cost of their tax sweeteners with Intel and they are not liking the numbers they are seeing.

Blue Oregon  has reported that Chipzilla has  asked for, and may well get their second dose of 30 year “tax certainty”,

This means that Intel does not have to pay Oregon income taxes for 30 years. But that was not enough, it is negotiating with Washington County Commissioners and the Hillsboro City Council on getting the same low property taxes they’ve had for the last 20 years as well.

There were a few people who do not think this a good idea and the Washington County Commission’s and the Hillsboro City Council’s open comment periods saw tax payers ask elected representatives a few questions about why Intel  was being allowed nearly a tax free life.

Of course, the elected representatives are unlikely to agree with the taxpayers, and seem certain to pledge Intel 30 years’ worth of tax breaks. They will say that Intel is promising to keep at least 17,500 Oregon employees for the next 30 years and will invest $100 billion in the region during that time.

However, those pesky tax payers with their slide rules point out that Intel is not promising anything as part of the deal and even if it was, it stinks for local tax payers who will have to fund Intel.

Intel said that it needs all these tax breaks to fund new equipment because their equipment costs are rising. However, the taxpayers point out that money really should be spent on public services and not giving Intel some state supported gear.

All up it is fairly likely that Intel will get its way and the tax payers will not even get a discount on the State backed products they made.

 

Fresh claims of Google tax evasion flourish

Posted on May 20, 2013 by - News

Google the OgleCompanies have once again come under the scrutiny of the tax man with claims that some are using the lower 12.5 percent corporate tax Ireland has to offer to dodge paying large amounts to HMRC.

Over the weekend, Google was hit by fresh claims of dodging tax after an ex employee grassed it up to the media, while UK retailer Marks and Spencer is also facing claims of tax evasion over its online sales.

Google whistleblower Barney Jones worked for the company for four years, ending his time in 2006. He claims he has 100,000 emails that expose an “immoral” tax avoidance scheme used by his former employer.

According to Jones, Google managed to “pull the wool” over HMRC by diverting British profits through Ireland to a Bermuda tax haven, following claims that the company had only paid £7.3 million in corporation tax last year despite having a UK turnover of £3 billion.

He told The Sunday Times that he won contracts with major companies to buy advertising space in the UK but the deals were “closed” by staff in Ireland in a “smokescreen” scheme.

Peter Barron, Google director, external relations said in a statement: “As we said in front of the Public Accounts Committee, it is difficult to respond fully to documents we have not seen. These questions relate to Google’s business in the UK going back a decade or more and don’t change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.”

Marks and Spencer is also going to be investigated. Over the weekend reports emerged that the squeaky clean family brand had turned to Ireland to avoid tax, with accusations that goods shipped to Europe from the UK were invoiced to an Irish subsidiary at lower rate.

According to The Guardian, which has seen an internal M&S document, the company’s structure saw it shipping goods from the UK, but using an Irish transaction to Marks & Spencer (Ireland) Limited.

Marks & Spencer  of course, refuted the claims – saying Ireland was used to host the website as it was the largest international market for M&S, and therefore the logical host for the EU site.

Barclays slashes jobs to appease fat cats

Posted on February 12, 2013 by - News

fatter catBarclays has announced that it will be handing out the pink slips to around 3700 of its 140000 staff.

The P45s will be handed to 1,800 bankers in the corporate and investment section, while 1,900 staff at the company’s retail and business banking arm will also face the axe.

The move, announced by the company’s new chief exec Antony Jenkins, forms part of a cost cutting strategic exercise- codenamed “project Transform” – which fat cats hope will see the bank’s total cost base reduced by £1.7 billion to £16.8 billion in 2015.

The bank is also moving to try and appease the public and shareholders claiming that it will close down the controversial tax planning business. It has also set aside £1.6 billion to compensate customers sold payment protection insurance (PPI) and £850 million for people who were sold interest rate hedging products.

And it’s also ensuring it doesn’t get caught up in a fat cat bonus barny, claiming that its
staff bonus pool was down 16 percent in 2012, with the average bonus it paid last year fell 13 percent to £13,300.

Over at the investment arm of the bank, while the average bonus paid to staff fell 17 percent  to £54,100.

The strategy arrives as the bank announced its  latest financials, which showed a rise in profits by 26 percent to £7.05 billion.

HMRC moves to clamp down on fat cats

Posted on January 17, 2013 by - News

FAT CATHM Revenue & Customs (HMRC) has decided to take its crusade to clamp down on affluent tax dodgers one step further.

The tax man has announced that it will be ramping up its investigations, hiring an extra 100 inspectors to its Affluent Compliance Team.

Created in 2010, as a result of £917 million in funding – presumably from tax payers’ cash- this team already has 200 eagle eyed spies and does what it says on the tin – targets wealthy Britons living in the UK who may be concealing money from the Revenue.

The HMRC said that it was now adding to its team as a result of a £5 million investment in September last year.

To be in with a chance of gaining a position in the team, the HMRC says applicants must have external experience and appropriate qualifications for inspector and lead case director roles.

With the announcement the watchdog has also said it’s expanding its search, targeting those who are sitting on a fortune of £1 million to £20 million, from the previous start figure of £2.5 million.

Fat cats with annual earnings of more than £150,000 are also being scrutinised.

Overall the amount of people that fall into these categories make up around 300,000 of the British population, HMRC claimed.

Since the unit opened the HMRC said it’s been successful in raking in the cash, claiming that by the end of December 2012 the department had brought in an extra £75 million in tax, which was “well ahead of expectations”.

It now has set itself a target of £586 million by the end of 2015.