Crickhowell: Welsh town moves 'offshore' to avoid tax on local business

When independent traders in a small Welsh town discovered the loopholes used by multinational giants to avoid paying UK tax, they didn’t just get mad.

Now local businesses in Crickhowell are turning the tables on the likes of Google and Starbucks by employing the same accountancy practices used by the world’s biggest companies, to move their entire town “offshore”.

Crickhowell: Welsh town moves 'offshore' to avoid tax on local business

Finally an initiative on behalf of local businesses, regarding the inequal taxation compared to multinationals.
For years large companies like Google or Starbucks have been legally avoiding taxes through intricate schemes like offshore accounts or by shady government deals like in the Netherlands.
Could this be the start of a nation-wide revolt in order to finally force equal legislation through politics?

The insane thing is that these corporations will employ whole departments of accountants who look through every single rule of legislation to see what tax refunds they can apply for. These departments actually pay for themselves.

In Britain, the tax rules actually run to 17,000 pages of legalese, while in Hong Kong there are only 297 pages.

www.theguardian.com...

a reply to: stormcell
Who are to blaim, multinationals taking advantage or the politicians who provide the means through legislation?
This already has been going on for far to long in my opinion.
Doubt anything will change in the near future, because of strong corporate lobbyists, however initiatives like the one in Crickhowell are commendable.
At least they bring up attention again to this injustice and unfair competition.

originally posted by: stormcell
The insane thing is that these corporations will employ whole departments of accountants who look through every single rule of legislation to see what tax refunds they can apply for. These departments actually pay for themselves.

This is the really sad thing, far more depressing than realized. There are buildings with 10,000 or 20,000 people working in them, and their entire function is just to create paperwork, paperwork that works to keep that company in its position.

Their work will prevent smaller companies from rising up with better service or offers, or entire industries will be held back, and just so this one company and its board of directors can maintain their monopoly. Screw free markets when you can have hundreds of people pen thousands of pages of incoherent doublespeak nonsense.

And it gets deeper then that.

From an outside perspective, humans need: Food, Water, Housing, Healthcare, Entertainment. We have industries for all of this. Then we have services: financial, social, governmental, legal, and its all of these, the buildings with thousands of people in them creating paperwork, but not actually doing anything to support the basic needs of people, humans.

With all the people creating endless amounts of paper waste, just imagine if instead they were doing something productive, to actually support their fellow humans.

Sorry for getting philosophical...

a reply to: Tyrion79

Crickhowell residents want to share their tax avoidance plan with other towns, in a bid to force the Treasury into legislation to crack down on loopholes which allowed the likes of Amazon to pay just £11.9m of tax last year on £5.3bn of UK internet sales.

That is brilliant, go on Wales! It would be fantastic if they start something here and put and end to the disgusting inequality between local traders and multi-national companies.

I've noticed that it is common practice here in Michigan for businesses to locate just beyond the borders of the town or city where they do business to avoid the taxes there. It can get so crowded with businesses outside of town that the old main street business districts have to try to attract traffic and the new areas become the new main street.

It seems true that in order to attract new businesses you need a lower tax base which is something the Republicans are always saying. Perhaps some new zoning laws would help, but I sure didn't like the "trickle down" economics of the Regan era, they are more like trickle up in my opinion.

Good on them. I've been there and it's a lovely town.

About time there was ONE LAW FOR ALL.

a reply to: Tyrion79

Finally an initiative on behalf of local businesses, regarding the inequal taxation compared to multinationals.

Thats hardly the right attitude though is it? We want larger companies to pay thier fair share rather than encourage smaller business to cheat as well.

a reply to: MrMasterMinder
Either you haven't gotten the point of why they do this, or you didn't read the entire article.
It's not that they don't want to pay taxes anymore, it's the only way to force the government to close the loopholes that multinationals exploit. (loopholes that are purposely intended in my opinion)

Crickhowell residents want to share their tax avoidance plan with other towns, in a bid to force the Treasury into legislation to crack down on loopholes which allowed the likes of Amazon to pay just £11.9m of tax last year on £5.3bn of UK internet sales.

In above example Amazon only paid 0,0022452830188679 % taxes on their total sales last year.
In comparison, if for instance your income is £2000,- a month, this would mean you only have to pay less than £4,50 in taxes at he end of it.
Now wouldn't we all like that now?
As the past has shown, politicians won't do anything about the inequal taxation, indeed they only facilitate the large corporations in helping them create said loopholes.
One could even say, that current governments are actually subsidizing multinationals by relieving them of taxation.
So in order to put an end to this, local businesses are resorting to this tactic, which is in fact just as legal as the way multinationals get away with it.
Or are you saying you agree with how the situation is, as it is now?

Jo Carthew, who runs Crickhowell’s Black Mountain Smokery, which sells local artisan produce, with her family, said: “We were shocked to discover that the revenue generated by hard-working employees in these British high street chains isn’t declared. We do want to pay our taxes because we all use local schools and hospitals but we want a change of law so everyone pays their fair share.”

I hope this has cleared it up for you now.

a reply to: boncho

From an outside perspective, humans need: Food, Water, Housing, Healthcare, Entertainment. We have industries for all of this. Then we have services: financial, social, governmental, legal, and its all of these, the buildings with thousands of people in them creating paperwork, but not actually doing anything to support the basic needs of people, humans.

With all the people creating endless amounts of paper waste, just imagine if instead they were doing something productive, to actually support their fellow humans.

I agree. The outragious ever-growing bureaucracy we see today is counter-productive and only serves to make the rich even richer, while the poor remain where they are.
Politicians exactly know this, that's why they always promise to reduce bureaucracy in their upcoming election programs, however always fail to do so after being elected.
And every time people seem to fall for these false promises, or at least that's the way the media portrays it anyway.

At the end of the day, which person gets more satisfaction or sense of accomplishment out of his work?
The construction worker who just finished building a house, or the administrator after having pushed piles of paperwork from one end of the desk to another.
I apoligise if I'm sounding a bit condescending, because I do realise that we also need people working administrations, however I do think that the balance of the scales are a bit off to one side in this.
Not to mention the huge gaps in the amount of salaries between different professions, only justified by having higher educations.
(As if anyone can do the job of a wellrounded, but "lowly" educated carpenter nowadays... lol)

a reply to: Tyrion79

So you seriously think the company suddenly had a board meeting and said 'hey guys what can we do protest about the big companies avoiding taxes?' and someone came up with the idea to copy them to get exposure?

Or did a company decide to just doge paying their taxes by copying what the bigger companies do?

Either way you now have less companies paying their taxes which is not good for the economy.

a reply to: MrMasterMinder

Either way you now have less companies paying their taxes which is not good for the economy.

I agree and that's exactly the reason why the government should change legislation in order to remove tax evasion for everyone, including multinationals.
Imagine what it'll do for the economy, once all the multinationals started paying their equal share in taxes.

originally posted by: MrMasterMinder
a reply to: Tyrion79

So you seriously think the company suddenly had a board meeting and said 'hey guys what can we do protest about the big companies avoiding taxes?' and someone came up with the idea to copy them to get exposure?

Or did a company decide to just doge paying their taxes by copying what the bigger companies do?

Either way you now have less companies paying their taxes which is not good for the economy.

Yes, so lets hunt down and penalize the small companies who may contribute thousands to the tax fund of government overspending and ignore the large corporations who avoid paying millions and even billions in taxes.

What difference does it make? Unless there is fair treatment, people will do what they need to thrive and survive. Go after them all or none....no exceptions, exemptions, loopholes, no special treatment.

originally posted by: MichiganSwampBuck
I've noticed that it is common practice here in Michigan for businesses to locate just beyond the borders of the town or city where they do business to avoid the taxes there. It can get so crowded with businesses outside of town that the old main street business districts have to try to attract traffic and the new areas become the new main street.

It seems true that in order to attract new businesses you need a lower tax base which is something the Republicans are always saying. Perhaps some new zoning laws would help, but I sure didn't like the "trickle down" economics of the Regan era, they are more like trickle up in my opinion.

Thanks for the info. The inner city rot started with the Intestate Highway System. People didn't have to live near their jobs anymore. Government intervention, in this case the interstate highways, always has side effects.

The trickle down got soaked up by the 50% to 95% taxes we pay.

The dollar has lost 95% of it value since 1913.