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Avoiding tax - tips

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Recently read about amazon paying 1 million in tax & processing UK sales in Luxembourg. Seems like a sound Business idea. Does anyone know any "clever" accountants so I can do the same?

 

TY

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You don't need an accountant. There's a 'travellers' camp near Doncaster. Just move in.

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You don't need an accountant. There's a 'travellers' camp near Doncaster. Just move in.

 

I'm looking for tips. I wanna pay 0.01%

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I'm looking for tips. I wanna pay 0.01%

 

Is your product digital, like an E-book or summat?

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get yourself a business and pay your workers in shares. thats how amazon does it.

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get yourself a business and pay your workers in shares. thats how amazon does it.

 

No it isn't. Not even remotely.

 

Set up your primary business in a tax haven. Set up subsidiary businesses, owned by this business in countries you want to operate in and a few tax friendly countries.

License certain things, like brands, to the companies in tax friendly locations.

Supply materials through same companies.

Companies in the end countries, ie UK, purchase permission to use the brand and other IP, they also purchase supplies from the tax friendly companies.

 

Result is minimal profit in the UK, corporation tax is levied on profit.

Profit is high in tax friendly countries, but they're tax friendly, so corporation tax is low, and anyway from the UK point of view, not being paid to the UK.

 

Profit is then repatriated to the parent company, or perhaps not (see Apple as a US based company not repatriating HUGE amounts of cash to avoid attracting US tax).

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No it isn't. Not even remotely.

 

Set up your primary business in a tax haven. Set up subsidiary businesses, owned by this business in countries you want to operate in and a few tax friendly countries.

License certain things, like brands, to the companies in tax friendly locations.

Supply materials through same companies.

Companies in the end countries, ie UK, purchase permission to use the brand and other IP, they also purchase supplies from the tax friendly companies.

 

Result is minimal profit in the UK, corporation tax is levied on profit.

Profit is high in tax friendly countries, but they're tax friendly, so corporation tax is low, and anyway from the UK point of view, not being paid to the UK.

 

Profit is then repatriated to the parent company, or perhaps not (see Apple as a US based company not repatriating HUGE amounts of cash to avoid attracting US tax).

 

Which is why higher corporation tax rates don't work. All it does is encourage companies to do exactly what you suggest.

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Absolutely, it's quite difficult to do anything about really. The only way is through international cooperation, but countries are in effect in competition with each other to attract the business of these multinationals.

 

We could obviously alter our accounting rules as we wish, but it's really quite hard to rule out as an expense a legitimate purchase from abroad and a scheme to just move profit to a favourable tax area.

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Absolutely, it's quite difficult to do anything about really. The only way is through international cooperation, but countries are in effect in competition with each other to attract the business of these multinationals.

 

We could obviously alter our accounting rules as we wish, but it's really quite hard to rule out as an expense a legitimate purchase from abroad and a scheme to just move profit to a favourable tax area.

 

If you cant beat them join them.

 

---------- Post added 08-08-2018 at 10:24 ----------

 

apparently you need about 250k turnover upwards to have access to these tax avoidance mechanisms.

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Absolutely, it's quite difficult to do anything about really. The only way is through international cooperation, but countries are in effect in competition with each other to attract the business of these multinationals.

 

We could obviously alter our accounting rules as we wish, but it's really quite hard to rule out as an expense a legitimate purchase from abroad and a scheme to just move profit to a favourable tax area.

 

And if corporations had to pay corporation tax on the same profits in every country where they trade, they'd go bust!

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And if corporations had to pay corporation tax on the same profits in every country where they trade, they'd go bust!

 

Not sure why, if they were making a profit then after paying tax they'd just have a slightly smaller profit.

Unless you meant pay tax on the global profit, which clearly wouldn't be workable.

 

---------- Post added 08-08-2018 at 14:00 ----------

 

If you cant beat them join them.

 

---------- Post added 08-08-2018 at 10:24 ----------

 

apparently you need about 250k turnover upwards to have access to these tax avoidance mechanisms.

 

As a private individual you can't avoid paying income tax though without becoming non resident in this country.

So even if you offshored your service company profits (and HMRC don't like that), you'd find it impossible to draw any personal income unless you also offshored yourself.

Hence why Lewis Hamilton lives in Monaco.

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Recently read about amazon paying 1 million in tax & processing UK sales in Luxembourg. Seems like a sound Business idea. Does anyone know any "clever" accountants so I can do the same?

 

TY

 

you will need a significant turnover to make it worthwhile, a friend looked into Andorra setting up something, no chance only the very big companies with multi million or billion turnovers would make it pay.

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