Quote:
Originally Posted by Sir Trev
Companies would alter their ownership structure and would still shunt their profits to the lowest taxation country. All of the large IT companies I have worked for do this - the UK operating (Ltd) company would be owned by, say, the Irish operating country who would "charge" the UK a % of their revenue. This meant the UK made a loss, paid little or no UK corporation tax, and all of the profits were then held in Ireland which at the time had a very low CT rate. This is what all large corporates do. A simple paper shuffling job and some formal board minutes is all it takes to "sell" the UK operating company to, say, Lichtenstein who will then be ones to hold all the profits. Small companies cannot do this and will be the ones that suffer if UK CT rates go up - they'll either go bust, reduce their workforce or just about scrape by. The Treasury may get a little more cash but it may deter entrepreneurs from setting up new companies and the economy may stagnate which defeats the object. It's a very difficult balancing act for successive governments who all try to encourage growth by lowering CT rates while trying to preserve incomes from it. Glad I don't have the headache of setting fiscal policies.
|
Yep I used to work for a company that gave us a share of the UK profits as a bonus. Every thing we exported was sold to a Co in the Cayman Is who then sold it on. I'll leave you to estimate my bonus.