Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
If you went out and bought, say a microwave, for £120 and are a basic rate taxpayer in work under 65 - think of this.
You will have paid VAT on the purchase. It will have been bought out of an income on which you will have paid tax and National Insurance and your employer will have paid NI as well.
To earn the money to buy that microwave results in the taxman getting £92.95 total tax out of you and your efforts.
Imagine as well.... To give you your job that generates the ability to buy that microwave your employer has to generate revenue of £192.95, plus then having to get enough to pay for your workstation, tools or whatever else you need to do your job. Materials have to be paid for, admin has to be covered..... think of just how much money has to be generated by economic activity just so you can buy that microwave.... Your employer then has to make a profit and get some income for himself from that activity.... That is all without any employer pension costs as well....
Brian Dixon
- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
actuly I would have brought one in morrisons for £39,but that's me all over.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
nearly spat my coffee over the screen there brian.
Guest 756- Registered: 6 Jun 2012
- Posts: 727
Thats called industry.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
yes howard why buy 1 microwave at 120 English pounds when can get 3,and have enough change for a coffee.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
Then there's 10% import duty on the microwave, assuming it came from the Far East. Then HMRC get a cut of the profit made by both the retailer and the importer in the form of corporation tax.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
all trifling amounts if we go shopping with brian - an honest version of anthony worrall-thompson.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
But if the microwave was made in the UK, you could add the positives of having a successful employer, with a successful business, employing many employees, who will be earning good wages and passing these wages back into their local community and then they would not mind paying the tax in the first place.
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Guest 698- Registered: 28 May 2010
- Posts: 8,664
I will donate a pint of ale to the first Forumite to name a company still making domestic microwave ovens in the uk.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
not taking any chances are you peter?
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
The whole point is that the domestic manufacturer would have to compete with overseas imports and with the high taxes, red tape and higher wages here the import will be cheaper so the UK manufacturer will go bust.
Try to stop the imports and you will be in breach of trade agreements, action gets taken against our exports, UK inflation goes up because of high import costs and expensive home manufactured products so businesses go bust and people lose their jobs....
The whole point is that we have a global market, we are a trading nation and must trade to survive. We must therefore make sure that our businesses can compete that we do not load them with too much red tape, too high taxes and other costs so they can get out an win business where we can. If we cannot produce microwaves competitively in the UK, then we import them and make other things or provide other services that we can export profitably.
This is how the world works and we must work with it to prosper.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
Businesses' like Google & Amazon you mean BarryW?
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
SWWood- Location: Dover
- Registered: 30 May 2012
- Posts: 261
Sharp still build microwaves in Wales.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
Then I owe you a pint, SW!
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
GaryC - I mean all businesses. large and small. They all have a part to play, they provide jobs and through them tax revenues even if they are fortunate enough to find legal ways of not paying corporation tax.
All of us can take what legal measures are available to reduce our tax bills but if we do something illegal then we deserve to be punished by the courts, whether individuals or corporate.
Would you drive businesses out of the UK with their jobs and investment just to make them pay what you regard are 'their due' even if strictly speaking they are not doing anything illegal? They call that cutting off your nose to spite your face.
As I have said before, the problem here is with our over complex high tax system that is punishing successful people and companies.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
BarryW.
Another copy/paste response.
The only thing I can deduce from #15 is that you agree with the dodgy antics of the likes of Google.
Yes- I agree they provide a service to the UK
Yes- I agree they provide much need employment.
And contrary to what you think, I have no problem with them earning £billions in profit, I want all business to earn a profit, that's what makes the wheels turn and good things should come from that.
I also don't want anyone to be ripped off by being over- Taxed and I certainly agree with you that the tax system should be simplified.
But what I bloody hate, is that they only pay 1% at most or nil Tax if they can avoid it.
That to you is business Acumen.
To me that is Greed.
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Guest 698- Registered: 28 May 2010
- Posts: 8,664
I think there's often confusion between turnover and profit. Companies collect VAT on their turnover and pay it (less VAT they have paid out) to the exchequer. These amounts do not appear in financial statements as P&L accounts are prepared net of VAT. An Internet business with £1billion turnover at a 5% gross profit margin will make a GP of £50m. With staff costs of £20m, property costs of £5m and advertising costs of £15m, they make a £10m net profit. With the main rate of corporation tax at 23%, that's £2.3m for the exchequer- just in corporation tax- and thats without any avoidance strategies. But on a turnover of £1bn they will have collected and paid £200m in VAT, and on a wage bill of £20m, paid nearly £3m in employer NICs. Then probably a quarter of the premises costs (£1.25m) will be business rates. So all in all for each £1b of turnover generated by such a business, about £206m goes to the exchequer. Of which just over 1% is corporation tax.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Very well said Peter. There is an enormous amount of ill-informed attacks on business out there.
GaryC - I copied and pasted nothing - or is that just a way undermining a serious response to which you have no argument at all.
As I said - the priority should be with bringing business and their investment and jobs to the UK and not attacking them because they do not pay enough tax based on your definition of that. I have a blog soon to be uploaded of this very subject.
Good luck to anyone and everyone in making sure they pay no more tax than they have to. We are all free as individuals and companies to protect our assets within the law.
What you call greed is actually using your freedom within the law.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Some good thinking by Charlie here. He makes a lot of sense, but then simple low (and flat) taxes are what I have been saying are needed for years. The same principal must be extended to individuals too, a low flat tax rate in a simple reformed tax system. This is the only answer, not more complexities on top of complexities or high taxes that damage business.
Here it is
http://www.telegraph.co.uk/finance/economics/10076899/Slash-corporation-tax-to-10pc-to-beat-avoidance-says-MP.htmlGuest 655- Registered: 13 Mar 2008
- Posts: 10,247
