Coffee House

Google obeys tax laws, and gives us awesome services for free. Why complain?

23 January 2016

12:06 PM

23 January 2016

12:06 PM

If Google hoped for some good PR in offering £130 million to settle UK tax claims dating back to the Labour years, it was a miscalculation: Labour regards the offer as “derisory” and the BBC is leading its news bulletins the better to sock it to its rival. Why did Google bother? It has run up against the standard anti-business narrative: that the social worth of businesses can be measured only by how much cash they give to the government. In fact, Google provides its services to millions of Britons (worth at least £11 billion, by some estimates) at no cost at all: this is its contribution to society. As for its contribution to the government’s coffers, Google has – from the offset – been following the rules. And for this, it has been lambasted.

It ought to come as no surprise that paying tax has been revolutionised in an electronic, borderless environment world. And yet an awful lot of people are in a constant state of shock that taxpayers adapt. As we have seen with Google, Apple – and even pop groups like U2, fronted by Saint Bono, which moved part of its business to the Netherlands for tax reasons. As Bono explained:-

It’s just some smart people we have working for us trying to be sensible about the way we’re taxed

Google has also hired smart people to plan its tax exposure. The fact that governments, including our own, are still using the term ‘tax avoidance’ shows how little they have understood the issue. We’re in an era of tax competition: governments need to compete for people. And they do. Why is George Osborne offering the lowest corporation tax in the G20? Why is he boasting about his restraint on taxing overseas profits? To try to tempt big companies away from Ireland and other lower-tax countries.

Quite properly, any government will investigate and prosecute companies who break the rules. But if the tax system is addled with loopholes, can it really blame a company — or a stand-up comedian — that (legally) takes advantage of them?

And, anyway, companies can’t pay tax: only people can. Osborne’s steady reduction of corporation tax to 20pc has left companies with more money to hire workers and keep prices low. His policy just might just be related to Britain having zero inflation and record employment.

Google’s contribution to the UK economy is so big that there are serious worries about it screwing up the GDP figures: we’re all paying nothing for hugely valuable digital products and nothing shows up in the economic output. Google’s popularity has made it very powerful – too powerful for my liking. A lot depends on its good behaviour which is, perhaps, why its tax arrangements cause such interest. But the general principle holds: if you don’t like the tax rules, then it’s best to change the rules – rather than blame companies for following them.

Show comments
  • Andrew Mc

    That’s the best sarcastic article I’ve seen in ages! Cheers Nelson.

  • mittfh

    One of the big problems with international companies is that they’re very adept at coming up with schemes to limit their exposure to corporation tax. Perhaps one of the most notable cases is Starbucks, which charges its international franchises significant sums of money in royalties to use the name, plus changes them huge markups on buying products such as the coffee beans – so siphoning the majority of their excess revenue from countries that charge Corporation Tax to those which don’t’ thus ensuring that the franchises is countries which do make net losses.

    Such schemes are perfectly legal and it’s difficult to see how such schemes could be legislated away. Then there’s Ikea, which is actually headquartered in the Netherlands and funnels revenue through a number of subsidiary companies including non-profits (which don’t pay CT) to make determining their CT liabilities as opaque as possible, while some companies consist of a shell holding company with dozens (or hundreds) of subsidiary companies which carry out the actual business (so individually having very low CT liabiltiies, possibly smaller than if they were a single company).

    Of course, such companies are obeying the letter of the law regarding CT, but not the spirit. About the only way to mitigate such practices would be to completely abolish it, as if the companies can avoid paying any CT when the rate’s 20%, they’re not likely to suddenly abolish those schemes if it reduces to 10% or even 1%. However, if the drop in revenue was compensated for by increasing income tax on high earners, it’s likely they’d find some means of minimising their personal exposure to that as well (and/or lobbying very strongly against such changes, including the threat to close their offices in the country planning such a change).

  • Emma Rome

    The problem isn’t that it obeys the rules. The problem is that the rules
    were designed to ensure that big companies have loopholes to exploit.

    Just because something is legal doesn’t make it right.

  • John Partridge

    fraser you idiot

    • Sipu

      I am afraid, John Partridge is right. You really are an idiot.

  • SonOfaGun

    Google snarf people’s information for free, and sell it for money. Google is right now selling an image of your home to all and sundry without asking any of us to sign a building release.

  • Sean L

    “Companies can’t pay tax: only people can.” Eh? What are you on about? A company *is* a person, a legal person. When incorporated a company becomes a juridical person, as distinct from a natural person, and answerable in law as such. Corporation tax is payable by companies, the clue’s in the name. Whether that is also a natural person is beside the point. To pass over such distinctions misses the entire point of company law.

  • King Kibbutz

    My complaint would be that the tax laws need sharpening up if we see the multinationals paying below their weight.

  • rodger the dodger

    To all those cheering Google being forced to pay £130m in back taxes –


    You wait. This government will be raising taxes for EVERYBODY during the next 5 years, no matter what you earn. They’re skint, and they are hunting down every single, f***ing penny.

  • MrBishi

    If any company or individual uses expensive advisers to avoid tax then the rest of us pick up his/hers/their bill.
    We are currently overspending our tax receipts by some £70 billion a year and have notched up £1.5 trillion of debt. Our nice and cuddly tax avoiders are responsible in large part for both our deficit and our debt.
    “Osborne’s steady reduction of corporation tax to 20pc has left companies with more money to hire workers and keep prices low.”

    I think you will find that this money has been scooped into the directors bonus pool.

  • Greenslime

    The rules are garbage and Google is an avaricious international monolith. The job of any CFO or Finance Director is to decrease his/her company’s tax bill, not to exercise his/her moral judgement on what is right or wrong – unemployment would swiftly follow for anyone who got confused about that.

    So Google’s (et many als) finance staff did their job. They worked within the garbage rules to ensure that their company paid no more tax than it was legally required to. They did this legally by working within international tax laws, most of which were signed off by the EU, not the UK government.

    The reason that Labour is bumping its gums about this is that it is desperate to deflect the press away from its day-to-day bumbling stupidity and inefficiency.

    If you want to make Google – and the plethora of other large multinationals who do exactly the same thing – pay taxes which are more in keeping with its profits, either change the law or boycott its services. Keep in mind though the ‘Law of Unintended Consequences’. This is a game of find the opposite end of the spaghetti. Remember that many of these companies employ people so pay employment taxes, use services and maintain a supply chain so are responsible for indirect employment and rent or maintain premises so pay rates and rent, etc.

    • Mr B J Mann

      “Remember that many of these companies employ people so pay employment
      taxes, use services and maintain a supply chain so are responsible for
      indirect employment and rent or maintain premises so pay rates and rent,

      Yes but so do every other company who pay full Corporate Taxes.

      But they pay full Corporate Taxes AS WELL!

      ON TOP!!!

      • Greenslime

        ??? Er, or course.

        • Mr B J Mann

          “??? Er, or course.”

          I take it you meant:

          “??? Er, of course.”

          So why bring up the fact that Google et all pay them as though it excuses not paying corporation tax?!

          The tax dodgers pay employment taxes, are responsible for indirect employment taxes and pay rates, etc, just like the non tax dodgers but don’t pay corporate taxes, often get round council taxes, and sometimes sell their goods VAT free, so gaining a massive advantage over local full tax-paying and VAT collecting rivals, putting them out of business, causing the government to lose their taxes, and the VAT they collect, and having to pay their former staff benefits.

          And remember that the tax dodgers usually employ fewer people locally, so it’s not as if they replace the jobs they destroy.

          • Greenslime

            Yes. It went off in my hand.

            I don’t disagree with any of your points but these companies are exploiting, perfectly legally, international tax agreements. Rather than venting our collective spleens through our moral outrage, we should be demanding change in these laws.

            Like governments of all kinds, companies don’t really have a soul. Their moral compasses are largely non-existent. For governments, things are done for the sake of survival expediency and, for big business, market dominance (aka profits).

            Google’s brand is so powerful that it could upsticks, in its entirety, from the UK yet still do business here and the UK government would then not be able to collect any taxes from the company. Whichever jurisdiction they plonked themselves in would reap all the benefit and would therefore have little interest in wittering from the UK about the moral unfairness of the situation. That is why we have to change the law. That is something that the UK cannot do unilaterally. Nor will the process be quick and, because the EU will no doubt take primacy in any international talks, we will likely end up with another camel!

            • Mr B J Mann

              Don’t get the hump!

          • Arthur Sparknottle

            It isn’t dodging tax to pay according to the rules. It is what any business would do. Dodging tax is criminal. It means you BROKE the rules. The problem we have is that generations of government have made easily circumvented rules – the circumvention is entirely legal. If they want google to pay more tax and all those other companies that offshore their transactions, they simply need to write into the next budget a regulation that says that offshore multi national companies must pay tax on a fixed percentage of their UK transactions IRRESPECTIVE of notional Intellectual Property rights or where the transaction is logged. Ten percent of the gross transaction cost would be about right, since they obviously have costs to run their business. Google’s UK revenue is $5.6Bn, so a shade over half a billion should be about right.

            Of course compnaies never actually pay teh tax, they just put up their prices so their customers do it. There may be unintended consequences in extra costs to Google’s customers.

            • Mr B J Mann

              Yes, governments make it easy for their big multinational friends, even introducing new loopholes for them to take advantage of in the same budgets they claim to be closing loopholes the public have been complaining of.

              But the companies also break rules as well as bend them, as do HMRC.

              If a company continually makes a loss because it pays ridiculous amounts for logos or branding rights then the directors should be done for trading while insolvent and not looking after the companies finances properly.

              If a company claims it doesn’t actually run its business from the UK when clearly it does it should be done for fraud…..

              • Arthur Sparknottle

                Completely agree. I am all ion favour of companies being made to pay a proper amount of tax. If local companies must pay the standard rates of corporation tax, then so must multinationals, and if they try these dodges of which you speak, I’d be in favour of a catch all levy of 10% of their UK turnover. It could be called the Aggressive Avoidance Tax.

  • Chris Hobson

    Imagine where the leftie e-mob would be without nasty american capitalist social media companies.

    • GraveDave

      Imagine where the Rightie mob would be without Murdoch and his press barons managing the lies and mismanagement of the Tory elite.


      Combined print and online readership

      (In brackets print alone)

      Effective owner/s

      Information about effective owner/s

      Political orientation of newspaper/s

      % of combined print and online(Print alone)

      The Sun/The Sun on Sunday



      Rupert Murdoch

      Billionaire. Lives in US.

      Alleged tax avoider.

      Supported Tories in 2010



      The Mail/ Mail on Sunday



      Lord Rothermere

      Billionaire. Lives in France.

      Non-domiciled for UK tax

      Supported Tories in 2010






      Lord Rothermere

      Billionaire. Lives in France.

      Non-domiciled for UK tax

      Supported Tories in 2010



      Mirror/Sunday Mirror/ People



      Trinity Mirror plc

      Public Limited Company

      Supported Labour in 2010



      The Guardian/The Observer



      Scott Trust Ltd

      A company with purpose “to secure Guardian’s

      Supported Lib Dems in 2010



      Telegraph/ Sunday Telegraph



      David and Frederick Barclay

      Billionaires. Live on private island near Sark.

      Alleged tax avoiders.

      Supported Tories in 2010



      The Times/ Sunday Times



      Rupert Murdoch

      Billionaire. Lives in US.

      Alleged tax avoider.

      Supported Tories in 2010



      The Independent/ i/Independent on Sunday



      Alexander (father)and Evgeny (son) Lebedev

      Alexander is a billionaire, ex-KGB and lives in Russia. Evgeny lives in
      the UK

      Supported anti-Tory tactical voting in 2010



      London Evening Standard



      Alexander and Evgeny Lebedev

      Alexander is billionaire, ex-KGB and lives in Russia. Evgeny lives in UK

      Supported Tories in 2010



      Daily Express/Sunday Express



      Richard Desmond


      Alleged tax avoider.

      Supported Tories in 2010



      Daily Star/Daily Star Sunday



      Richard Desmond

      Billionaire pornographer.

      Alleged tax avoider.

      Supported Tories in 2010



      Daily Record/ Sunday Mail



      Trinity Mirror plc

      Public limited company

      Supported Labour in 2010



      Financial Times



      Pearson plc

      Public limited company

      Supported Tories in 2010






      • The Masked Marvel

        Yawn. Murdoch blows with the wind.

    • The Masked Marvel

      Not only that, but where would the left e-mob be without the nasty american capitalist tech companies who make the tools they use to organise their group hate speech and violent protests?

  • Frank

    In so far as I understand it, Google sells advertising in Britain from offices located in London. It then pretends that actually these sales were carried out of behalf of Google Luxembourg/Google Netherlands/etc. Thus it claims that these revenues and the connected underlying profits were not taxable in Britain.
    I do not know whether you have checked with your accountant, but the average British company trying to emulate the above would be quickly nailed to the wall by HMRC. If you want to work the above approach, you need to have all your sale staff occupying offices in Luxembourg / Netherlands / etc!
    The same “cunning trick” is used by Amazon, where all the sales in Britain are wonderfully converted into sales on behalf of a foreign Amazon entity – we will eventually end up with taxation where the click to buy occurs but Osborne has been fudging this issue for years.

    • ButcombeMan

      And many sales by “Amazon Marketplace” coming from abroad are also avoiding VAT.

      Amazon must know this. but facilitates the tax loss.

      HMRC must know this but goes along with it.

    • Arthur Sparknottle

      Osborne has been fudging it? What about the thirteen years of Labour chancellors who fudged it before him. Do you think this issue has just arisen? Lots of companies do this, including well known coffee shop proprietors. Gordon Brown and Alistair Darling did nothing about it either.

      • Frank

        Totally agree, but one did hope for better from a supposedly Conservative Chancellor – which makes his duplicity worse!

  • Theodor_Worzel

    The Guardian, 7 June 2013

    The National Security Agency has obtained direct access to the systems of GOOGLE, Facebook, Apple and other US internet giants, according to a top secret document obtained by the Guardian.

    The NSA access is part of a previously undisclosed program called PRISM, which allows officials to collect material including search history, the content of emails, file transfers and live chats, the document says.

    Although the presentation claims the program is run with the ASSISTANCE OF THE COMPANIES, all those who responded [GOOGLE etc] to a Guardian request for comment on Thursday DENIED KNOWLEDGE OF ANY SUCH PROGRAM.

    Daily Mail, 8 June 2013

    Revealed: Google and Facebook DID allow NSA access to data and were in talks to set up ‘spying rooms’ despite denials by [Facebook’s Jewish CEO Mark] Zuckerberg and [Google’s Jewish CEO Larry] Page over PRISM project

    The Guardian,, 23 August 2013

    PRISM companies include GOOGLE and Yahoo, says NSA

    Business Insider, 13 May 2010

    [Facebook’s Jewish] CEO Mark Zuckerberg and his company are suddenly facing a big new round of scrutiny and criticism about their cavalier attitude toward user privacy.

    An early instant messenger exchange Mark had with a college friend won’t help put these concerns to rest.

    According to SAI sources, the following exchange is between a 19-year-old Mark Zuckerberg and a friend shortly after Mark launched The Facebook in his dorm room:

    Zuck: Yeah so if you ever need info about anyone at Harvard

    Zuck: Just ask.

    Zuck: I have over 4,000 emails, pictures, addresses, SNS

    [Redacted Friend’s Name]: What? How’d you manage that one?

    Zuck: People just submitted it.

    Zuck: I don’t know why.

    Zuck: THEY “TRUST ME”

    Zuck: DUMB F*CKS.

    • The Masked Marvel

      Don’t worry your pointed little head. Zuckerberg and Page are JINOs who would sell Israel down the river to protect their billions.

  • Cobbett

    Google is at the forefront on the surveillance state/anti-privacy…i don’t use it.

    • GraveDave

      You only have had to use it once.

      • Cobbett

        Just got a new PC….also use a VPN. But the main reason they give is targeted adverts…if one thing p*sses me off is unsolicited adverts so they aren’t doing themselves any favours.

  • greggf

    “Google obeys tax laws, and gives us awesome services for free.”

    Do you get such services for free Fraser…..?
    Tell us how ?

    • The Masked Marvel

      Free at point of sale, more or less. It ‘feels’ free when he uses it.

      • Arthur Sparknottle

        He isn’t the customer. he is the product. They sell him or his bandwidth to advertisers who pay and are the real customers. You and he should both know this. If you don’t you should have a keeper to lead you around by the hand.

  • kyalami

    Time we reduced tax law from many thousands of pages to a couple of dozen.

  • T Gould

    The baying anti-money mob isn’t fazed by anything like legality or political reality. I suppose it would be lovely if we could extract money consequence free from huge corporations, but the world simply doesn’t work like that.

    • Robin Blackhurst

      Who rules?

      • Paul Robson

        Would destroy the economy overnight. Literally

      • Arthur Sparknottle

        A lot of impoverished unemployed wretches if you get your way.

  • LoveMeIamALiberal

    The trouble with Google et al is that they can use their multi national status to shift profits around the world to minimise tax bills, an advantage smaller and start up companies don’t have, making entry into the market for competitor firms more difficult – and that’s bad for consumers.

  • douglas redmayne

    We should complain because they can pay more without being incentives ed to deliver less. Fraserburgh Nelson is another of these corporate apologists who should be bog flushed.

  • UnionPacificRX

    130 million pounds is not chump change. and Google is not the only Service Company being audited. Ireland is auditing a few more. I wonder if this would impact the price of their stock?

    • Todd Unctious

      No it is 3% of their last ten years profit.

      • UnionPacificRX

        checked on Google Stock. One article says it will soar from 700 odd dollars to 900 odd dollars. Another article says t has been dead stock for the last year. Mainly that Google is an advertising company and not really a search engine. It is losing on advertising and has to rapidly restructure. I “googled” “Google Stock”
        Taking that into issue this tax hit must bring worry lines on many foreheads.

  • Malcolm Stevas

    Fraser Nelson does well to remind us of the extensive services provided by Google, of which most of us avail ourselves daily. Just the search engine – extraordinarily powerful and useful. I’ve used personal computers for over 30 years: who remembers e.g. WebCrawler, Lycos, Altavista…? Who bothers using the cheesy 2nd-rate Yahoo rather than Google? How about that free email service, the maps? Google can often be annoying, and one keeps a wary eye on this global behemoth; but it’s made a vast difference to us, mostly beneficial. The usual suspects criticise it, since they presume to scorn anything to do with profit-making and hate the corporate world: they are either too young to know any better, or too stupid to appreciate the benefits of capitalism and free enterprise over the ghastliness of Leftism that has wrought such political repression and economic destruction.

    • jeremy Morfey

      Indeed. Do you remember the Pearce Report? This extended the valuation of goods and services beyond the purely financial and considered social and environmental benefit and costed it.

      It is ironic that the politician who commissioned this revolutionary and somewhat socialistic approach to fiscal accounting was not a Socialist, nor even a Labour Party member, but was none other than former Conservative Party Chairman, Lord Chris Patten.

      Maybe with all these corporations, we should offset the benefits they provide nations and societies within these nations against taxes from profits they make as a side-effect of their activities, and then come up with a net tax bill that reflects the net amount they take out of society in profit?

      Taking a strict money system, it may well be that Google continues to be grossly undertaxed here. However, taking into account the social benefits of a wide range of services they provide for nothing, which would otherwise have to be paid for, then we might well be getting closer to the amount they are actually offering in lieu of tax.

      I would like to see the sums.

    • LG

      One of the most naive posts I’ve read in a long time.

      • Malcolm Stevas

        Coming from someone who combines almost complete ignorance of the facts surrounding “gun control” with a breathtaking confidence in making unfounded assertions on the subject, this is mildly amusing.

      • Todd Unctious

        He can usually do even better than this. Malcolm is a simple, take it at face value, snob.

    • GraveDave

      Yawn… ..

  • Robin Blackhurst

    The problem with google is that it enables Jews to know and control the minds of we goyim (cattle) to an even greater degree that the Jew controlled pre-internet media.

    • jeremy Morfey

      Of course they’re going to try it on, but we know them well enough to be able to argue back on their own terms and keep our minds free and uncontrolled by anyone. I actually like the Jews – I love their music and their sense of humour, and feel they contribute a great deal to every community where they settle on equal terms.

    • Malcolm Stevas

      Ah, those Jews! Until the Internet and online discussion forums emerged, I was unaware of the number of lingering anti-Semitic paranoiacs still extant.

    • Paul Robson

      Who is this loony ?

      • Michael990

        A moslem, along with his friend ‘Theodor_Worzel’, one suspects.

    • Mow_the_Grass

      Another g’dam piece of excrement – looking for an excuse for its loser life,
      Yeah everything including but not limited to global warming – is all about (got to do with ) tem jooooooos.
      0,2 percent of the world population – and the jooooooos control everything.
      The logic works with ten year olds and those suffering serious mental impairment.
      Now where do you fit in?

    • The Masked Marvel

      Yep. It would be fine it was gentiles running it, righ?

  • Robert Crabtree

    Google does not give free services. UK advertisers pay Google about 5 billion a year.
    This goes to Ireland, then to the Netherlands, and then to Bermuda and is not taxed. This is 5% of our balance of trade deficit.
    Out of €18.3 billion revenue in Ireland google only paid about €41 million tax.
    These loopholes could be closed in a day or alternatively google should be treated the same as an entertainer who comes here and pays 20% of his fee in tax.

    • David B

      We don’t tax revenue we tax profit. Understanding this point is the first essential step in beginning to understanding tax

      • Robin Blackhurst

        We don’t tax revenue we tax profit. Understanding this point is the first essential step in beginning to understanding tax.

        And the the first essential step in beginning to understanding tax evasion.

        • Span Ows


        • David B

          Not even close!

          simple question – if you sell your house for £100.000 did you make £100,000 profit.

          To avoid any doubt the answer is NO! The profit is £100,000 less the cost to buy it in the first place!

          A company pays tax on the selling price less the cost to produce the product or service (including wages).

          If Google turnover £5bn but have £4.99b of costs they pay tax on the £0.01. Revenue is irrelevant and a ratio of tax to revenue is misleading.

          It is a principle dating back thousands of years. The problem with the tax debate is most of those with an opinion fail to understand the basic principle – tax is paid on profit!

          • Alex

            It’s quite simple, work out the ratio of sales to profit and tax sales by country on that basis.

            And sales are taxed – when it’s the plebs buying. It’s called VAT.

            • David B

              It’s not simple. – costs vary by country because of things like minimum wage, energy prices, etc!

              Second we are talking about corporation tax, not VAT! That is a different (tax well it’s actually duty collected by customs arm of HMRC). Very difference rules apply.

            • Brian Jones

              VAT does not go to the seller but to the government , in fact all VAT registered companies are unpaid tax collectors.

          • Robin Blackhurst

            The problem with the tax debate is most of those with an opinion fail to understand the basic principle – tax is paid on profit!

            It is not a “basic principle”, it is a choice. In the case of dateline corporations, it is a choice that enables them to evade (yes) tax.

            • David B

              Taxable profits are calculated in accordance with international accounting statements (IAS) and the c14,000 pages of UK tax code.

              The article was spot on, if you don’t like the result form the proper application of these rules then change the rules don’t complain about the result.

              But remember we imposed higher energy prices on companies and now we can’t afford to make steel in this country. Don’t complain if higher tax means companies don’t want to employ people or sell their products here!

              If that sounds silly look at why Usain Bolt does not run in the UK.

              • Robin Blackhurst

                then change the rules


                • David B

                  So you accept Google followed the rules and did not evade tax!

                  Next will you accept the loss of jobs when companies move to lower tax jurisdictions

                  Every decision has a consequence!

                • Robin Blackhurst

                  A non occupied government would give google a choice: Trade here and pay tax according to our laws (on sales), or don’t trade here. Why do you think google would choose not to trade here?

                • David B

                  What tax does any company pay on its sales? I have studied and practiced as an accountant for 30 years and I know of no such tax.

                  Companies pay corporation tax on their profits. VAT is only levied on the final consumer of products. Google levies VAT on its U.K. sales and passes it over to HMRC after deducting VAT it pays out to others.

                  As the majority of Google’s sales are to other VAT registered companies then any VAT charged by Google will become input VAT by those companies and deducted by them in their returns.

                  We don’t have a sales tax in this country VAT is a duty levied on the final consumer only!

                • Robin Blackhurst

                  I have studied and practiced as an accountant for 30 years and I know of no such tax.

                  A government that ruled in the interests of our people would introduce such a tax, and enforce payment.

                • David B

                  Only a government that wanted to destroy investment and employment you mean

                • Umkondo

                  Not entirely true. VAT is levied on any value added throughout the value chain. Businesses the difference between inputs and outputs. Many businesses do not deal with individual consumers. So company A supplying company B will collect and pay VAT. So will company B when supplying company C. So will company C when selling to an individual. VAT is effectively another income tax as well as being an end user sales tax.

                • David B

                  You are describing the administrative activity rather than the principle and macro effect. When think about tax start from the point it is a small number of simple rules complicated by a large number of very complex exemptions.

                  In your example company A pays £100 for a product from the producer.. The seller levies 20% vat. Compang A now has a cost of goods of £100 and an amount of £20 to reclaim from the government. Company A sells to company B for £200 and levies £40 of VAT. That means company A pays £20 to HMRC (40-20) and has a profit £100 on which it will suffer corporation tax.

                  If company B sells to a consumer for £300 plus vat of £60 they pay £20 to HMRC in Vat (60-40) and have £100 profit. The final consumer suffers the full £60 vat, but HMRC received 3 lots of £20 from each of the producer, company A and company B.

                  This is off course complicated by goods and services that are zero rates (like food) and exempt (like insurance). It also is affected by services the company is assumed to have consumed (eg entertaining) which it is not allowed to reclaim

                  Now these rules get complicated by reality, but in principle the consumer suffers vat and the business act as collection agents

                • Paul Robson

                  Against EU law

                • Paul Robson

                  No, simplify them. Loopholes exist in complexity. Mostly Browns

          • Todd Unctious

            VAT is paid on purchases , as is most Excise duty. National Insurance is paid on earnings. Income tax on income. CGT is paid on gains. Only corporation tax is paid on profits.

            • David B

              Vat is levied on the final consumer, who is nearly always individuals going into shops to by goods and services.

              All business pay National Insurance. It is called Employers NIC and it is levied at a rate of 13.8% on TOP of all employees wages and salaries. It is disclosed on the payslip of all employees.

              Corporation tax is paid by companies. Self employed people pay income tax. The rules for calculating profits is identical and is covered in schedule D case 1. Profit is used because that is the income of a business. Sales or turnover less expenses is what belongs to the owners.

              Capital gains tax is paid on sales price less cost

              At least try and do some reading to understand the subject. Clearly you do understand that a business has cost to pay before an owner earns any income

      • Todd Unctious

        We should move to a turnover tax levied at 4%.

        • David B

          Stagflation to follow immediately

        • Paul Robson

          You have to be insane.

        • Hayekian

          No, we should impose limits on how much debt interest and intellectual property costs you can offset against your tax liability.

          • Todd Unctious

            That too. If companies could not set debt interest off against tax then they would carry much less debt than the current £2,000 billion

    • Robin Blackhurst

      If the government was not occupied, dateline corporations would be taxed at fixed rate on sales in our country.

    • Hayekian

      They couldn’t be closed in a day as long as we remain part of the EU… and this is another reason why so much of big business is in favour of our membership

    • Todd Unctious

      Funniest thing happened today. The Sunday Times voted FrasercNeldon one of the top twenty journalists in the UK. P!us even funnier o e of the 500 most I portsnt people in Britain. I am still nursing my ribs from the laughter thereby induced.

  • Liberanos

    If Google go on blatantly obeying our tax laws like this, who knows where it will end?

    • Robert Crabtree

      With a VAT rate of 25% and 0% corporate tax.

  • The Masked Marvel

    It’s not free, Fraser. Google manipulates your search results, tracks your habits, collects your private information and scans your email (if you use their service) without your consent. How many lawsuits is it now? Not to mention the real negatives of what is nearly a monopoly. They are also a major military defence contractor these days. Feel comfortable with that?

    • Robin Blackhurst

      They know the public mind better than any other entity, and the mind of any individual user they care to examine better than himself, his wife or his shrink. They have the power to control minds with chosen search results. And they are Jews. Feel comfortable with that?

      • The Masked Marvel

        Ah, we get to the real issue with your last sentence. So is Facebook’s Zuckerberg, equally untrustworthy, and equally in bed with the Obama Administration and pushing Progressive causes. What do you think the solution should be?

        • Copyright101

          Google wasn’t the first search engine and it wasn’t the best yet somehow it dominates the field now. Facebook wasn’t the first social networking site and it was pretty unremarkable when it was new, now it dominates the field. The ability to outlast and outspend rivals seems to have helped.

          • The Masked Marvel

            “Somehow”. LOL. Nothing to do with its better algorithms or being the first one to have a serious ad network or anything.

    • Sausage McGuffin

      Indeed. I have as little to do with Google as I can practically manage. In terms of revenues they are essentially a media/advertising company on the scale of news corp, with a technology arm. The power and inflence they have is huge. Paying taxes is only the tip of the iceberg for controlling this monster.

    • douglas redmayne

      He is probably in their pocket but if not ge is part of the money nexus of which they form a greater part so he would sick up to them. He is execrable.

    • Paul Robson

      You have a point, but it’s irrelevant to this – Google’s actions may have been “morally wrong” but they weren’t “legally wrong”.

      You really don’t want to give politicians the option of making laws based on what is “morally right”.

      This is one of Brown’s constructions…… betcha.

      • The Masked Marvel

        No, pretty sure some of Google’s actions are legally wrong.

        • Paul Robson

          Probably some tiny things. But not this. What important thing is legally wrong ?

          • The Masked Marvel

            By “this”, I assume you mean taxes. I’m not referring to that at all. I agreed with Sergei Bryn when he said that if you want Google to pay more taxes, change the law. I’m referring to many other not very tiny things Google does. And Facebook, and now Twitter.

      • Todd Unctious

        Luxembourg is an international disgrace. Morally bankrupt, fiscally corrupt. It should be shamed and drummed out if the EU.

    • Jack Fletcher

      You don’t have to use it.

    • Hayekian

      The irony is that most of these tech companies are led by people with a “progressive” agenda. When it comes to mass immigration or extending benefits these companies are at the forefront of the media clamour. How strange that when it comes to paying for it all their enthusiasm disappears.

      • The Masked Marvel

        It’s not ironic, really. The people who run the tech companies aren’t engineers. And massive wealth at a very young, inexperienced age tends to give people messianic complexes, which is one element of Progressivism.

      • tjamesjones

        I’m late to this party but I recognise all the tunes. I had forgotten how vapid they are. Who on earth is enthusiastic about paying taxes? What shareholder would want managers who are enthusiastic about paying taxes? If you don’t like the tax laws, vote for a politician with some better ideas.

        • Hayekian

          Nobody cares about the shareholders these days, their holdings are generally too small to cause a serious revolt and the asset allocation and voting decisions will generally be proxied to a fund manager. That’s why there is such a massive principal agent problem and crap CEOs are taking home millions.
          On the preaching, It’s the hypocrisy that I object to, when Bono is running his earnings through Holland to avoid tax but in the same breath calling for more foreign aid it makes my blood boil.

          • tjamesjones

            those principal/agent concerns are valid, but not particularly relevant in Google’s case, where the founders are still massive shareholders and strongly motivated to maximise shareholder value. and this definitely includes minimising the tax bill, which means booking as much activity as possible in the lowest tax regime available. it’s just so much cant by everyone to complain about this. who tries to pay more tax than they have to? and the “little guy can’t pull the tricks google pulls” isn’t that strong an argument: google employees in the UK are subject to all the same laws as everyone else and pay their income tax and NI like the rest of us. corporation tax is a relatively small part of the pie (8% or so I think).

    • Tamerlane

      You pay for that? They saw you coming.

    • njaohnt

      I guess you use Google with their consent, too.

      • The Masked Marvel

        I use other search engines, or ones which include Google in aggregate. Your point?

        • njaohnt

          Well then you don’t get value from Google and they don’t from use.
          I have given Google as much consent to use search traffic data from me as they have given me to use their website.

          • The Masked Marvel

            You can be sure they are doing things without your consent as well.

  • grutchyngfysch

    This is the problem with multi-national companies in an era when every nation state is broke. We look at Google and see pounds signs, the French see euros, and the U.S. sees dollars (which not coincidentally is where the bulk of Google’s tax is actually paid). We can try and imagine a “fair” system where profits are taxed in the country in which they are generated – but how on earth do you determine that practically?

    So every state tries to “close the loop” and get the “full” tax bill landed into its exchequer, by which “full” means enough money to cover the state’s diabolical handling of its own finances.

    • jeremy Morfey

      We have hear the major drawback of global free trade, and one that has not really been answered by the economists nor by the political theorists. There are easier ways to get your professorships, such as parrotting Adam Smith conventional wisdom.

      Where we had the dreaded protectionism, every nation state could levy excise on goods or services coming in and place restriction on their movement, as well as the movement of people in and out who may be tempted to smuggle. Global free trade made smuggling much less of an issue, trade between nations much easier, travel much simpler, and the range of goods and services available to buy much greater for all. We forget sometimes the fabulous selection of items we take for granted in our local supermarket didn’t exist even as recently as the 1970s, and the online shopping choices have only been open to us during this century.

      On the other hand, control over sovereign wealth was actually possible then, which it isn’t now.

      One option is to have a world economy, with one harmonised taxation and trading system, expanding the idea of Margaret Thatcher’s ‘Single Market’ she imposed throughout the EU, which is decided centrally, but administered by directive in all nation states. Any UKIP member though can say what trouble that brings, that Soviet-style centralism is too easily corrupted, and that we cannot even expect Greeks and Germans to want the same fiscal systems, so that democratic control has to give way somewhere.

      Is there an alternative? I much prefer lots of markets, ideally one in every village, where each niche market can be tailored to local customs, traditions and circumstances. From this, the diversity of trade that is the whole point of it is enhanced, as is competition. How then do you tax it? Without taxes, there isn’t the revenue for public services, and without co-ordinated public services we descend to the law of the jungle, or Syria if you want an example.

      I do think that if there is to be global free trade, there also has to be a tax agreement, so that a fair distribution of tax revenue is arrived at wherever trade crosses national boundaries, even online. How can this be administered? Maybe the answer is a transaction tax, with a 50/50 split between incoming and outgoing tax jurisdictions, each time anything of value is transferred over a national boundary. This may require the valuation of intangibles, such as advertising intelligence, which is Google’s stock in trade. Eventually, this must be simplified by treaty agreement, so we don’t get the daft situation of crossing four frontiers from, say, Amiens to Aachen. I also think that there could be a threshold, below which it is not economically viable to enforce – say only transactions over £10,000 in value need be declared. This would bring in Google, Starbucks and Amazon while leaving the French corner shop nipping into Belgium for a crate of beer alone. Very tight definitions need to be made to avoid the big corporations splitting their transactions into packages below the threshold, and reassembling them once over the frontier.

      Most companies would set up shop locally, employ local staff and pay local taxes. This would then spare them having to go through transaction tax at all. But Google cannot then run its British operation from Ireland, unless the Irish and British Governments agreed how to tax the operation, and without such an agreement, it would default to a Transaction Tax as I described.

      • Paul Robson

        Nice idea but probably impossible in practice

    • Paul Robson

      The problem is the halfwits want, at the same time, to keep money earned by British companies abroad. Can’t have both ….

      And they’ve forgotten EU law.

      • Hayekian

        The problem too surely is that companies and individuals with vast wealth want the British state to protect their assets through the criminal justice ind intellectual property systems but don’t want to pay for the costs of the system. In the long term this is unsustainable. Maybe I’m missing something but few international companies are using the mainland UK with its high tax rates as a means of avoiding paying higher tax in other jurisdictions. You are however right about EU law and it’s a shame we don’t see the left wing EU defenders who criticize tax avoidance acknowledging that the EU is the enabler of this.

  • RationalSpeculation

    If Osborne’s policies “might just be related to Britain having zero inflation”, how come it’s so low in other countries which suffer the misfortune of not having him as their Chancellor? Or is he responsible for overcapacity in the Chinese manufacturing sector leading to the devaluation of the yuan and the Saudi decision to enter a price war with the U.S. frackers? Oh, and the ongoing troubles in the Eurozone, presumably they result from his policies too…

    • Paul Robson

      Because there is more than one reason for zero inflation. As an (extreme) example, no-one has any money, or no-one can buy anything.

  • jeremy Morfey

    If the money is not going to be extracted from Google, then it will be piled onto Council Tax, or added to our ever-bloated borrowing requirement (both public and domestic). You takes your money and you makes your choice.

    • Paul Robson

      It’s 200m, makes little difference

  • FrankS2

    If Google’s services are free, how did it get the income to make it liable to millions in taxes?

    • victor67

      Mainly advertising.

      • sidor

        And the advertising isn’t taxable.

        • LG

          Depends in which tax jurisdiction you declare the profit.

          • sidor

            Saudi Arabia? Liberia?

            • LG

              I have no idea how those companies treat the taxation of advertising. Hope that helps.

      • FrankS2

        The adverts aren’t free, then? Hooda Thunkit!

        • Paul Robson

          No, but that’s not the value of Google referred to. It is services for information

  • LG

    As of 2014, Google had 54,000 employees world wide.

    So, Fraser, maybe you’d like to reassess Google’s contribution to UK society, since it certainly doesn’t involve 200,000 jobs?

  • LG

    Google has 200,000 jobs in the UK? Really? Who’d of thought it.

    • Span Ows

      Not ‘has’, helped create, from the success of the businesses advertising on Google.

      Plus – apparently – 400K jobs across Europe that are directly associated with Android app development.

      • LG

        So, an advertising virtual monopoly gets the credit for the success of all the businesses it charges for advertising? So, those businesses wouldn’t have been even more successful if the on-line advertising wasn’t more competitive, by having more search engine competition?

        • Span Ows

          Who knows. I’m only stating what is quoted in the other article (linked by Fraser) that has all the figures: I am presuming they don’t “get the credit” so much as contribute a certain amount There are all sorts of other jobs, revenues and benefits:

          Of course I am sure someone has checked these figures 🙂

  • sidor

    There is a fundamental logical inconsistency in all the public discussions about the internet monopolies. The same people who welcome market competition as a driving force of the economic progress seemingly don’t mind when this competition is completely blocked by a single dominating global-scale monopoly, like Google or earlier emerged Windows. How much taxes an international monopoly pays in a particular country is just a question of semantics: it can easily present its books so that the taxable profit is negative.

    • Atlas

      neither are or were monopolies, Windows competes with Mac OS.X and Google with Bing.

      • LG

        A monopoly in the business sense doesn’t mean there are no other competitors. A market position which is so dominant is an effective monopoly. A bit like the big six energy companies.

        • Tom M

          …..or the biggest monopoly of them all, the Government.

          • Brian Jones

            A lot of people seem to be calling for a monopoly rail system in the UK. or is a nationalised monopoly somehow different?

      • sidor

        MS payed 1 billion for violating the ES anti-monopoly legislation. It can obviously afford to pay tips. In the US, the numerous attempts to persecute it for the monopolistic behaviour eventually failed: they have unlimited recourses for lobbying the politicians.

        You didn’t get it about Mac: they use their own software for their own hardware where MS cannot physically reach.

        • Hamburger

          It was only as a result of anti-American sentiment in the EU.

          • sidor

            And the similar legal action in the US was a result of anti-MS sentiments of foreign agents?

        • jeremy Morfey

          When my Sony Vaio laptop died three years ago, I acquired a secondhand Macbook Pro, One of the first things I did was to install Parallels Desktop, and Windows XP as a guest OS. So now I can run XP and my beloved legacy software on my mac as well and as speedily as I did on my old Vaio.

          I’ve not been able to do this on later PCs, because they are infested with later inferior versions of Windows. MS must be cursing me though!

          • sidor

            So, Windows managed to expand to the Mac territory. No limits to the growing monopoly. Thanks for supporting my point.

            I still don’t understand why do you need that crap: I have been using Mac’s Unix for many years without any need for the MS software designed for the housewives.

            • jeremy Morfey

              Mostly because I have Picture Publisher 8, Paint Shop Pro 9, Cool Edit Pro 2.1, idiot Solitaire to soothe my brain death, and Explorer which is better than Finder. All of these are only available using Windows XP or earlier, and nobody has improved on them in fifteen years. Macs are even talking about doing away with local removable storage, which is a no-no as far as I am concerned. I simply do not trust the cloud, and I find modern smartphone-ready interfaces impossible to live with. I like to see everything on one page, not to have to constantly swipe from one page to another because of too much blank space on the screen and huge tiles that offer me nothing I need, but cannot get rid of. I must say that Mac’s later offerings are an improvement on Windows’.

              I am still deciding about El Capitan (OS X 10.11). Stories about unpredicable deletion of mail, crashes with Preview, and that abysmal Disk Utility revamp, as well as major surgery required to upgrade is putting me off for now. You may guess that I’m still happy with Snow Leopard, which most reviews argue is Mac’s XP, and nothing since has improved on it. I’ve even managed to get Trim support onto Snow Leopard, so that just leaves lack of security updates being the only reason to upgrade.

              • sidor

                Let me explain the situation with the software by comparing it with the engineering market, say, 70-80 years ago. The dominating producer of ball bearings was Sweden. Imagine that an American company, like Ford, bought that producer and thereby restricted the ball bearings available in the market to its own standards. That is, the European carmakers wouldn’t have been able to use these bearings without complying to Ford’s standards. In this way, Ford would have got a huge advantage in the market.

            • Brian Jones

              Who’s a clever boy then? Millions of incredibly intelligent people use MS software.

          • Paul Robson

            virtual box does the same thing and is free and win,Mac,linux

        • Mr B J Mann

          Did you actually mean persecute?

          Or should that have been prosecute?!

          • sidor

            It’s a fine point of terminology for me as a layman in law. As far as I remember the Congress was trying to legislate dismembering MS into a set of independent companies. In that sense, using the word “prosecution” is somewhat ambiguous since it refers to a legal action within the limits of an existing law. Please correct this interpretation if you find it wrong.

            • Mr B J Mann

              I see. So you’re saying that if a school has a problem with a gang of bullies in one class and it tries to split them up the school is persecuting the bullies?!

              • sidor

                Let me explain my point using your example. If the school is doing the described operation within the perimeter of law according to the court verdict, this is prosecution. Otherwise it would be persecution which can be legally challenged. The US Congress doesn’t constrain itself by the existing laws since it can produce whatever law it finds appropriate. It can restrict rights of whatever group by its decision, like it was during Mccarthyism.

                • Mr B J Mann

                  And let me explain my point:

                  MS continually broke competition, copyright and other laws.

                  And each time they were found guilty they repackaged their scam tactic slightly until stopped in the next trial.

                  That is p!ss taking by MS, prosecution of MS by the law and persecution of distributors, competitors and consumers by MS.

                • sidor

                  That is true. That is why prosecution of a giant like MS by the existing law always fails. It has to be done in a different way, by issuing a dedicated legislation specifically killing that company. It is technically easy, but practically impossible due to corruption among the legislators.

                • Mr B J Mann

                  PS I take it that you also believe that MS has been subject to repeated “persecution” by the EU?!

                • sidor

                  You are free to take it whatever way you like. I explained the meaning of what I said. I don’t see where you disagree with me, except that both the EU and the US can legislate a particular company any way they like (I call it legally persecute). It is actually good because the company lawyers can always find loopholes in the existing law. My statement is purely hypothetical and doesn’t describe any real situation.

                • Mr B J Mann

                  Except that neither the US nor the EU persecuted MS.

                  They allowed them to exploit their monopoly position and get away with persecuting the competition, distributors, and consumers for far too long under existing laws that apply to everyone.

                • sidor

                  You just confirm what I said. Corruption among the US legislature. I would suggest a very simple law: as soon as whatever company has reached the limit of 1 billion it should automatically be divided into 2 independent parts.

      • Mr B J Mann

        Only yesterday I overheard someone say they were going to “Bing” the meaning of “monopoly”!

    • HJ777

      In a free market, you only achieve a monopoly position by being better than the competition – indeed this situation may be desirable provided that there are no artificial barriers to entry.

      Economic history shows us how hard it is for companies to maintain monopoly positions unless protected by government (either deliberately or inadvertently).

      • sidor

        Let me indicate a clear logical inconsistency in your conjecture: a free market isn’t free any more after an emerging monopoly happened to control it. It is of course true that any market competition results in a monopoly, which is known to anyone who played Monopoly. In a rigorous mathematical manner, this was proved by Morgenstern and von Neumann. The economic history perfectly supports this analytical inference.

        In simple terms, the beauty of “free market” is like the beauty of a girl who is a little bit pregnant: this transitory state can only be observed within a limited interval of time.

        • HJ777

          You are making the mistaken assumption that a player can ‘control’ a market because it has achieved a monopoly. In fact, in a free market without artificial barriers to entry it can only achieve and then maintain that position by responding to market needs better than its competitors do or could. If this ever changes it will either not achieve a monopoly in the first place or will not be able to maintain it – competitors and alternatives will arise if it does not respond efficiently to customer demand. Therefore a company in such a position does not ‘control’ the market.

          “In a rigorous mathematical manner, this was proved by Morgenstern and von Neumann.

          You have misunderstood their theory. I suggest that you read a little more.

          Now please show me examples of where a free market has led to monopoly that was successfully maintained indefinitely.

          • LG

            “has led to monopoly that was successfully maintained indefinitely.”

            The point is not whether monopolies can maintain themselves indefinitely, it is whether they should be allowed to exist at all.

            During the period in which a company (or companies) has a monopoly, they tend to extract excessive profits and/or provide poor service – because of a lack of effective competition. The period in which the monopoly persists may be short or extended. Free markets need effective competition to perform properly. Monopolies prevent the operation of the free market for as long as they persist. That’s why successful free market economies take a dim view of monopolies and cartels.

            • Hayekian

              “During the period in which a company (or companies) has a monopoly, they tend to extract excessive profits and/or provide poor service”
              but surely in doing so they create the conditions that lead to their own destruction?

              • LG

                Yes. But in the interim the consumer is being ripped off. Possibly for many, many years, depending on the specifics of the barriers to entry of that particular industry. Sound regulation as to acceptable market share would forestall the problem in the first place.

                If the Big 6 energy companies were the Big 16, they would be less likely to be able to sustain their virtual cartel position and would have to compete properly – on merit. It would also increase the pool of top management within the industry, helping to keep down CEO pay inflation.

                • Hayekian

                  In the end this is a left right issue which boils down to your confidence in governments to make things better. I think we both agree that monopolies are generally not good but there is also a lot of evidence that regulation leads to barriers to entry that protect incumbents and that regulators are prone to regulatory capture. You only have to look at that documentary at the weekend ( ) on the fair tax town to see regulatory capture of HMRC has already occurred for a lot of large businesses.

          • Alex

            No because capital is not freely available to new entrants. Plus the law of deeds and property will entitle a company to those assets which are the means of production, after which they will not let go of them at any price below their future productive capacity, so nobody will buy them.

            Mises Institute essays are laughably sophomoric. There’s a reason they don’t get published in proper academic journals.

          • Mr B J Mann

            But you are making the mistaken assumption that a player won’t ‘control’ a
            market once it has achieved a monopoly. In fact, in a monopoly the dominant player cam create artificial barriers to entry and then
            maintain that position without responding to market needs better than its
            competitors do or could.

            Try looking up the history of Microsoft.

            From what I’ve read Gates scammed IBM and Intel into thinking he had just the operating system to go with their new PC, then went and scammed the OS from a friend.

            Once he was in the monopoly position he forced distributors to put his OS on every computer they sold if they wanted to sell any PCs with his monopoly OS, so making it uneconomic for customers to busy an alternative OS, even if it was better.

            When that was ruled illegal he forced every distributor who wanted to sell IBM/Intel/MS PCs, or standalone versions of his OS, to buy a license for his OS for every computer they sold.

            Until, eventually, that was ruled illegal.

            Similarly he ripped off the original of the Netscape browser and gave it away “free” with every copy of his OS, which just about everybody bought, so the developers couldn’t profit from their invention until years (decades?) later when they finally won their court case.

            When Apple brought out their graphical interface and mouse he told everybody that they had rushed out a bodge job and MS were working on a far superior system but weren’t quite ready to release it because they wanted to get it right, when in fact they had nothing and were, again, ripping off someone else’s work for their profit………..

    • Paul Robson

      Why is it then that Microsoft (and to a lesser extent Apple) provide virtually everything Google do ?

  • MichtyMe

    Hmmm, ‘we all pay nothing’ how wonderfully charitable, is Google registered with the Charities Commission.

    • Zalacain

      That is a senseless comment. Google is a business that makes money in several ways, but mostly from advertising. Just like some TV channels, should ITV become a charity?

      • MichtyMe

        Just pointing out that the ‘we all pay nothing’ is a senseless comment. Someone, somewhere, at sometime has to pay.

        • LG

          He must have meant the comment in the article, not yours, which is perfectly sensible.

  • Mrs Crewe

    I saw John McDonnell on BBC spouting off about Google. He was complaining that they weren’t paying enough back taxes, however during the period we are talking about they were paying the taxes they were legally required to pay. Change laws all you want about how much tax is due but you can’t make those laws retroactive. Where would it stop? How many years into the past shall we make the demand for? What if we made other laws retroactive? How about the changes in the way union members had no choice about the contributions they had to pay to the Labour Party? Yes let’s make that retroactive and demand that Labour refund all that money that was taken from workers without their choice. And the closed shop changes in the law, when you had no choice about being in a union. That too, we’ll have back all the money taken from staff by unions. The changes in boundaries made by Tony Blair’s govt to increase the number of labour MPs in the House, right we’ll retroactively appeal that, all those new labour safe seats are gone and the MPs will have to repay all income and expenses to the public purse.
    Once again John McDonnell has shown us that he has the financial acumen of a sponge and intellect of a brick.

    • Alex

      Like the retroactive law clawing back benefits from those forced onto the workfare scheme?

      • Mrs Crewe

        Please cite the law

        • Alex
          • Mrs Crewe

            Wikipedia oh then it must be true sheesh.

            • Alex
              • Mrs Crewe

                This act does not make it lawful to claw back benefits as you so hysterically say. It meant that the govt did not have to repay benefit claimants when they had been sanctioned for not complying with the benefit conditions. So no not retrospective.

                • Paul Robson

                  Technically correct, but @Alex is right, I think. What they are doing is legalising the actions taken against benefits claimants retrospectively.

                  It is rather like committing a crime, then conveniently changing the law so it isn’t a crime.

                  Personally I think it stinks – not because of the merits or demerits of the claims, but because it is retrospective.

                  Allowing Politicians to do such things is a very bad idea. We cannot allow ourselves to be convinced it is okay “in this case” because it appeals to prejudices about Google, Benefits Claimants, or anything else. That way lies fascism.

                • Alex

                  You seem quick to defend not just slavery but unlawful slavery. I guess some things are just more important than the rule of law, aren’t they?

                  Wikipedia: “The Court of Appeal rul[ed] that the work placement system was unlawful
                  because Parliament had not given the DWP lawful authority to impose such
                  schemes and because the people involved were not provided with
                  sufficient information about it. The Court of Appeal quashed the Jobseeker’s Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011”.

                  It is on this basis that the sanctions were unlawful. It is not the repayment that was at issue but the sanctions themselves. So the government did not, as you assert, just say “this law means we don’t actually have to repay despite the fact we got it wrong” (although that would have been almost as egregious).

                  Instead, per subsection 5, it said:
                  “a notice given for the purposes of regulation 4(1) of the 2011 Regulations (requirement to participate and notification) is to be treated as a notice that complied with regulation 4(2)(e) (information about the causes of failing to participate) if it described an effect on payments of jobseeker’s allowance […]”

                  And similar provisions in subsections 3 to 10 to ensure that the information given to claimants about the scheme was now retrospectively to be considered sufficient to render their sanction for non-participation lawful.

                  In 10:
                  “The penalty provisions are to be treated (notwithstanding the amendments made by the 2012 Regulations) as having effect after the relevant time as they did before the relevant time [when the 2012 Regulations came into force], in relation to a failure to comply with the 2011 Regulations or, as the case may be, the Mandatory Work Activity Scheme Regulations that occurred or began to occur before the relevant time.”

                  (Refer the Jobseeker’s Allowance (Sanctions) (Amendment) Regulations 2012 sec 8:
                  “Regulations 7 (good cause) and 8 (consequences of failure to participate in the scheme) of the Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011(1) are revoked.”

                  Thus, the 2011 Regulations, sec 8:
                  “(1) Where […] a claimant (“C”) has failed to participate in the Scheme […],

                  (2) In the case of a jobseeker’s allowance […] C’s allowance is not payable for the period [of 13 or 26 weeks] specified in paragraph (4) or (5) […]”

                  did not apply from the date of the 2012 Regulations, until the retrospective Act under discussion.)

                  In 12, to sew it up:
                  “A penalty imposed on a person before or after the coming into force of this Act for—
                  (a) failing to participate in a scheme within section 17A(1) of the Jobseekers Act 1995, or
                  (b) failing to comply with regulations under section 17A of that Act,

                  is to be treated as lawfully imposed if the only ground or grounds for treating it as unlawfully imposed is or are removed by subsections (1) to (10).”

                  In what world is this not retrospective legislation?

                • Arthur Sparknottle

                  Oh no – not that old chestnut again. Obliging people being paid by the government -long term to attend a work experience as a condition of continued payments by the taxpayer is NOT slavery. Only a propagandised fool could suggest it was. I and my sons should not be obliged to continue having half of our earnings robbed from us in order to subsidise no-hope wretches who are long term unemployed UNLESS they are really trying all avenues to equip themselves for employment. Perhaps you don’t pay much tax? My middle son who is 31, comprehensive school educated, paid £95,000 to HMRC last year. In order to get that tax, he works 250 days a year, 0700 to 2100 or later and lives in hotels all over the planet. I think asking people to attend a few weeks of work related training or work experience in a supermarket after six months of free funding by we tax-payers is perfectly reasonable. The money they are paid by the government does not come out of the air. OTHER PEOPLE HAVE TO WORK FOR IT.

                • Alex

                  It’s unpaid work that you have no choice but to do. Call a spade a spade for heaven’s sake.

                  It’s inhuman that your son feels he has to work so many hours for someone else’s profit. But he can’t choose to do that and then turn around and whinge about tax: it’s the same for everyone, so the price of goods and services adjusts and he is at no disadvantage compared to everyone else in the country (apart from tax avoiders, I suppose).

                • kevinlynch1005

                  It’s hardly inhuman. He’s chosen that lifestyle for himself.

                • Alex

                  And the taxes will have formed part of that calculus – so why the whinging?

                • Arthur Sparknottle

                  What is it about Government’s absolute right to impose conditions on their long term handing out a giro cheques to unemployed people that you don’t get?

                  As in any other transaction, they are ENTIRELY at liberty to insist on some conditions to that handing over of money – such as six months to find a job THEN requirements – come to a job club OR do a month at Tescos.

                  Your use of the term slavery is ridiculous. Slaves are not free to walk away. Slaves are owned as property. If an individual on the work programme wishes, they can decline and walk away. Some do. The sanctions of stopping payments are just the government RIGHTLY declining to keep giving money to people who don’t understand the nature of a contract (we give you money – you do what we say) or don’t want to comply.

                  If you can’t use the language properly and don’t understand that a free person is not a SLAVE, how can I take you seriously?

                  My son whinging? He doesn’t have time. It was me that was complaining – not him. He tips up almost £380 A DAY to HMRC – on the dot, exactly as required by law. He knows and understands his obligations to society. It’s a pit that people like you and SOME of the people who after months and months of free money from tax payers don’t seem to understand their obligations to the people who work hard to get them that money.

                • Alex

                  Why should they be? I suspect you are against big government in other areas. And unemployment is due to economic conditions, not essential characteristics of unemployed people – or I wonder what it was they put in the water during the 1980s to suddenly make everyone so lazy.

                  Remove conditionality – that’s the way to save money on benefits.

                  I earn too much to claim any benefits myself, so I’m not sure what you are on about with your last sentence. I don’t believe in income tax, however: it should all be taxes on unused land and so forth.

                • Arthur Sparknottle

                  While I would agree that economic circumstances IN SOME LOCALITIES (let’s say the Redcar Steel Plant or the one in Wales) can create a temporary unemployment fiasco, it is not typically the case. New National Insurance numbers are being given out in huge numbers – many hundreds of thousands every year to migrants from abroad and these people in the main get work. If they can get work, so can anyone who isn’t a hopeless case. I don’t think the work will always be what the individuals unemployed want, or at the salary they used to earn – BUT they have a duty and a responsibility to support themselves if it is at all possible. The lack of THAT understanding among some people is a fundamental problem, not economic conditions except in special circumstances like where a major industry like steel is overwhelmed by cheap steal dumped by China.

                • Alex

                  Oh, there are more jobs. But they don’t have enough hours to live on. I can create a million zero hours jobs tomorrow if you really want to massage the figures.

                • Arthur Sparknottle

                  That’s a lie too. The ONS data shows that average weekly hours worked in this country has been rising steadily since 2010 from 32 hours in 2010 to 33.25 in 2015. See source here:


                  In any case if hundreds of thousands of foreign workers come here to live every year, and they do, then the wages are at the market rate and are attracting large numbers of people to fill the jobs. If you want higher wages and more hours for British workers, then we must leave the EU which has a wide open pipe for keen foreign workers to enter the market and reduce conditions through over supply.

                  Your problem Alex is that you don’t actually know the data, and I suspect that you don’t want to know it either. Look to the independent ONS for your information instead of the Daily Mirror and the Guardian’s more lunatic idealogues like Owen Jones.

                  Here are some ONS links for you on employment statistics. Deal in facts not sound bites and lefty headlines.


                  I am perfectly happy to criticise Cameron and Co when they are wrong. I’m a pragmatist, not an idealogue. Whatever works is what I want. Capitalism has brought billions out of utter poverty and misery across the world. Socialism in practice ruins their prospects. Just look at the performance of China since they abandoned Mao’s ways.

                • Alex

                  Yes, that is unsurprising, we are in the upswing of the business cycle. You need to measure jobs from peak to peak or trough to trough. I will wait until the next recession to assess it all but I maintain that austerity from 2010-13 in particular really held back the economy – look at the jobs stats from back then as well, when the economy should have been recovering.

                  It has nothing to do with Mao, please try to be a bit more sophisticated with your terms of debate.

                • Arthur Sparknottle

                  Did you look at those ONS links? The economy held back? Have you looked at the performance of this economy and the others in the G8? I just provided evidence that your remark that there were no jobs, and that any jobs there were are part time, are BOTH completely false. If there are any headwinds for this economy, they are blowing from Europe and China, not from Westminster old chap. My reading of the 2010 dip is that while other economies shed jobs in the recession, here employers and the workforce came to a compact that it was better to reduce hours a bit rather than throw people out of work. This was probably a good thing for most people – less pain all around. Some folk never learn either the meaning of words or lessons from other country’s failures: This economy NEVER had austerity in 2010 – that was Labour’s slogan – comprehensively rejected by the voters too, and the lesson of indebted and free spending southern European nations and their catastrophic difficulty in obtaining funding seems to have been entirely missed by folk like you. Their refusal to show willing in reducing the difference between what their governments could collect and what they were spending, meant MUCH higher unemployment and far more pain. Look at the performance of Spain, Greece, Italy, Portugal and France both then and now. We are FAR better off which is why we have so many young southern Europeans and French working here. London is now France’s third city in terms of how many French are working there. Only Paris, and Lyon have more French workers than London does. Holland’s hopeless leftist policies sent the economy into a dive.

                • Mr B J Mann

                  So how come the government can renege on the state retirement age for NI payers?

                  But not for, say, the pension benefits of civil servants who haven’t paid more than a fraction of the cost of their public service pensions, and which neither the government, the public sector, not the public, can even begin to afford?!

                • Arthur Sparknottle

                  I’m not certain how much civil servants pay for their pensions, but police pay about 21% of gross salary and their employers pay more than that. These payments are deferred pay and direct contributions. GPs pay 21% of their gross income to their pensions and teachers who get worse pensions than them pay 7% while their employers pay 14% THROUGHOUT their working lives.

                  What is more – ALL of these public sector workers have had their previous retirement ages revised upwards. This is certainly true of doctors, nurses and teachers anyway. Teachers used to gain full retirement benefits at 60; it is now 65. As for the NI pension – the changes now being talked about were publicised fourteen years ago.

                • Mr B J Mann


                  Who, and since when, in the police, paid around 21% gross into their pension?

                  And I should hope their employers do pay more:

                  A police (and firemen’s) pension costs about 40% of salary.

                  The last time I heard they were whinging about paying 17%.

                  But that was only the highest paid on 40% tax, so less than half the cost (and their “employers” DIDN’T pay the rest, unless you mean us, the taxpayer).

                  And, until April of this year, they will STILL be getting the 1.4% National Insurance rebate.

                  So a higher rate taxpaying cop or fireman might be “paying” 17% into his pension (rather than the 6 or 7% he was paying when younger, GROSS, balanced by a 1.4% NI rebate).

                  But it’s only 10.2% NET.

                  Less THE 1.4% (age points) NI Rebate is 8.8%.

                  For a benefit that ACTALLY costs 40% of salary.

                  So your point is?!

                • Arthur Sparknottle

                  You’re just jealous. You should have been a fireman. You had the choice. Bummer that you made the wrong one. None of my three sons have any pension. They are saving up to buy property to rent out.

                • Mr B J Mann

                  Yes, I’m jealous like I’m jealous of muggers, I had a choice, bummer that.

                  So what if the whole country had chosen to work for the council?!

                  Bummer that!

                  They chose less pay and more pension, now they want more pay but to keep their original pension rights!

                  Incidentally, they probably signed up for around 5k salary and 2,5k pension if they want to quote their contract!!!

                • Mr B J Mann

                  And as for deferred pay, the “deal” was you got short hours, fantastic job security, unbelievable sick pay and holiday conditions, early retirement, etc, etc.

                  In exchange for which you got paid slightly less than someone working longer hours, with no job security, not as good to no pension, terrible sick pay and holidays…….

                  Now the public sector get (often a lot) better pay and STILL get vastly better pensions, albeit reduced for NEW entrants.

                  And please no rubbish about how when “adjusted” they still get paid less.

                  They do that by comparing a big, monopoly, no competition, guaranteed revenue, no risk council or Whitehall ministry with a successful company that has reached the same size:

                  Then they say, look, that company whose managers have successfully braved the risks and faced the challenges and successfully grown the company to the size of that council, and get rewarded appropriately.

                  So the “managers” and “Workers” of the similarly sized council should get the same pay?!?!?!

                  No, they should get the same pay as a similarly sized company that is having to slash wages because they are going bust, or of a charity that makes the same profit (zero) and doesn’t filter all the donations off into staff pay and perks, but pays a wage commensurate with its public service ethos!

                • Mr B J Mann

                  And just to put your reply into it’s full perspective:

                  “teachers who get worse pensions than them pay 7% while their employers pay 14% THROUGHOUT their working lives.”

                  Pay attention at the back, there:

                  7% + 14 = 21%

                  Cost of Teacher’s Pension = 30%

                  Shortfall in Contributions = ~ 1/3 !

                  (And before anyone mentions growth: that’s the CONTRIBUTION required THROUGHOUT their working lives!)

                • Mr B J Mann

                  As for:

                  “As for the NI pension – the changes now being talked about were publicised fourteen years ago.”

                  So what?

                  That’s NOT what I and many others signed up for around 40 years ago!

                  So we’re back to the original question:

                  If a bankrupt state can renege on it’s state pensions:

                  Why can’t it do the same for the public sector pensions it can’t afford to pay for?

                  Not for entrants to new future schemes.

                  Not for future benefits from future contributions in existing schemes.

                  But for benefits already “earned” but not funded.

                  After all, it can manage to do that with soldiers who have risked their lives for their country, but then there’s bu gger all of them.

                  Thought you’d signed up for 20 years and a (actually pretty crap pension compare to the police and fire services) pension?

                  Tough, we’re getting rid of you after 19 years and 364 days!

                  Funny how they feel safe doing that to a few hundred soldiers.

                  But not half a million, or whatever it is now, people who’ve corrupted a couple of generations of kids into PC illiterate innumerates unable to think for themselves or even have a robust discussion without running for a safe space?!

                • Arthur Sparknottle

                  I don’t know what you are raising here about the services pension. Do you have information about a soldier whose entitlement to pension hinged on a twenty year minimum service period who was made redundant at 19 years and so many days? If so that’s a very shabby way to go on. Pensions are usually paid on a pro rata basis for service completed. Any contributory pension would certainly be. Most soldiers by the way do nothing like twenty years. My nephew is a captain in an infantry regiment. He has done about ten years I think and has given notice of his intention to leave. He has done three tours in Afghanistan of VERY fierce daily contacts with insurgents. I’m glad he is out of that – frankly.

                  As for the NI pension. It has not been reneged on; the starting age has merely moved up a couple of years. This is because we are all living longer. In 1945 most men croaked about five years after they got it. Now they are still around after ten years…. It is obvious what will happen to the qualifying age, and as I said – the information was made available about fourteen years ago when Labour was in power. I start my pension next March. My wife’s deadline was moved up seven years to 67.

                • Mr B J Mann

                  You should read the papers more if you’re not aware of the shoddy way they’ve been treating soldiers coming up to 22 (not 20, as I should have said earlier) years, or ask your nephew.

                  Basically if you’ve done your FULL 22 years you’re entitled to pension payments immediately (like a fireman or policeman after 30 years).

                  But if they get rid of you a day early……….

                  As for the rest, as the average teacher dies at 85 are you now saying it would be OK to delay paying them their teachers pension until they were 80?

                  As long as they announced it now for a 2030 start!

                • Mr B J Mann

                  There’s those getting free funding.

                  But how would your son feel if he was laid off, couldn’t find work through no want of trying, having paid just a decade of NI, plus tax, never mind 40 and perhaps even being over the retirement age he’s paid his NI for, and being sent to stack shelves INSTEAD OF job hunting?

                • Arthur Sparknottle

                  Well – since he works contract never longer than one year long and often six months, which can be cancelled at one month’s notice, he faces that problem about every six months and has to line up a new contract with a new multi-national. In the last eight years he has worked for a giant multi-national confectionery company, an aero engine manufacturer famous for making top range cars, a giant sugar corporation, an under-sea pipe-line laying company, waste management and others. If he is ever sick he will get no pay and no mercy.

                • Mr B J Mann

                  So he’s a high flying deep sea saturation confectioner and cake icer c u m drain unblocking chauffeur?!

                  Clearly a man of many talents!

                  Or perhaps just a tax accountant?!

                • Arthur Sparknottle

                  No – he walks into multi-nationals and reorganises their supply chain management and data so that they can keep track of their costs and ordering. I missed British Gas off the list. Companies like these have massive inventories of expensive parts and can not afford to have large amounts of stock lying about sinking money and at the same time, when they need their stuff, they need it now. By organising how these processes run, he can save them millions. I was surprised to learn that Rolls Royce still keep stock for the Merlin Engines that powered Lancasters, Spitfires and Hurricanes as well as parts for their Trent Engines which power half the airliners in the world. British gas have inventory for a huge range of gas boilers and can get a special washer or bit of twisted pipe to your gas fitter installer by tomorrow morning. Oil pipeline companies run massively expensive ships, pipes, and under-sea machines. The world we take for granted is extremely expensive and complex and most of us have no clue about what goes on behind the scenes to enable our lives to carry on as they do. Sugar corporations like Tate & Lyle have massive plant all over the world. Supply chain there can involve several massive trains a day in plant in the States turning up with thousands of tonnes of corn for conversion to sugar in giant mash tuns, or sugar beet farms in Slovenia, Poland and elsewhere.

                • Desperate Dan’s Porridge

                  More hysterical rubbish.

          • Paul Robson

            Didn’t bother to read it then. This legislation (correctly, as no retrospective legislation should be allowed for the reasons @bethvaughan:disqus gives) has been found unlawful itself.

            • Alex

              Of course it has been found unlawful, it’s patently counter to every human rights convention going. It is the action of a tin-pot dictatorship.

              However, Parliament is sovereign, and the act remains in force, despite the courts finding it unlawful.

              • Paul Robson

                It’s under appeal. I think it’s wrong. Full Stop.

                Now, can I clarify your position. Given you obviously think this retrospective law is wrong, presumably retrospective action against Google (or anyone else) is wrong as well ?

                • Alex

                  Let’s note first that there was a retrospective Finance Act against tax avoiders in 2008. (We see the priorities of Labour versus those of the Tories, maybe.) Although this one was upheld in a test case. And there is precedent for it with tax, it was also done in 2006 and 1987. No precedent for benefits.

                  I think it is wrong even when it’s Google – and certainly with the above Acts which seemed to focus on rich individuals – but I hope you’ll forgive me for shedding fewer tears over large corporations particularly than over penniless unpaid workers.

                • Paul Robson

                  I agree. I just find retrospective legislation worse. I hope BEPS will stop some of it. Unfortunately we do not have the clout take on the US. It won’t make a big difference , even Richie only thinks 200m annually. No dent in 100bn.

            • Alex

              Of course, it being a matter of utmost importance to claw back every penny from unemployed young people, the thing was rushed through parliament with approval from both parties and before it could be scrutinised by the parliamentary committee on human rights, which don’t apply to those subhumans without work.

              • Paul Robson

                You seem confused. I agree with you (basically). My point is that I am consistent about it. Retrospective law is wrong.

                If something was legal when you did it, you cannot be sanctioned for it by changing the law.

          • Desperate Dan’s Porridge

            Utter rubbish. This law did not permit the reclaiming of benefits paid out previously but to establish previous actions as lawful.

    • dickhut

      I fear you are being unkind to sponges and bricks.

    • Ipsmick

      And let’s make the Conservatives return all those millions to their donors. If people join unions they assume that they’ll be donating to a party that, nominally at least, is on their side.

      • Mrs Crewe

        So you are saying that the unions are only interested in helping the Labour Party? And here was me thinking they should be representing the workers regardless of their political opinion.

      • P_S_W

        “If people join unions they assume that they’ll be donating to a party that, nominally at least, is on their side.”

        I’m assuming you’re talking about Labour here, and that wasn’t part of my thinking at all when I joined a Union.

  • Ralph

    It always strikes me as odd that we criticise those who use legal tax planning methods and not the politicians, mainly Labour ones, who created the system.

    • telemachus

      Now Ralph
      You obfuscate
      Jeremy is at the forefront of calling these corporate criminals to heel
      Osborne is so intimidated by them that with each potential loophole busting statute(created of course for public opinion consumption) he gives them due notice so that they can reorganize and avoid the trap

      • Mrs Crewe

        Britain contrary to your wishes is not a fascist theotocracy law making should be clear and transparent. I thought any fool knew that.

      • Ralph

        To do anything Jeremy has to win an election and there is more chance of Tom Watson becoming a decent human being than that.

      • davidofkent

        Jeremy is at the forefront of nothing. He is in opposition and has no power to do anything except waffle. Our taxation regime is far too complicated and so we can expect accountants to find loopholes which the Treasury closes as fast as it can. Tax avoidance schemes have to be presented to HMRC to check their validity. I realise that you don’t understand anything about these things, but trying to impress us with Jeremy Corbyn is really rather silly.

      • Roger

        Not criminals. If you have evidence of Law breaking then take it to the Police.

        The FD of a company has a duty to minimise taxes within the Law and last I looked such were not responsible for Social Services or the Church.

        Take care as UK companies have been consolidating profits into the UK for generations. Nothing new here only the scale. Easy solution; drop VAT and introduce Purchase Taxes.

    • victor67

      You may have missed it but the Politicians serve the interests of the big companies.

      Look at the cosy relationship between HMRC and the big accounting firms. No sweetheart deals for small business and self assessment.
      Just by saying what they do is legal does not make it right or in the best interests of society.
      What would happen to the country if every business aggressively avoided tax and located their companies offshore ?

      • Ralph

        Hopefully the heads of the politicians who allowed that to happen would be placed on poles at each end of London Bridge.

        Back in the day you could carry the tax code in a briefcase, now you need a supermarket trolley. That expansion and the loopholes, planned or not, is the fault of politicians.

        • victor67

          But look who funds the Tory party and New Labour. Why do you think Boots CEO was lobbying for the Tories. They know they will implement policies that are favourable to their current structure and tacitly condone their offshore arrangements..

          While our politics are not quite as bad as the US.The Tory party is effectively the political wing of the FTSE 100 companies.At their conference there are more lobbyists than delegates.

          • Paul Robson

            Boots doesn’t exist ; it’s part of Walgreens.

          • Brian Jones

            Perhaps the people to blame are the overpaid tax accountants at HMRC who have been working on reducing legal tax avoidance for decades. Tax avoidance is legal and we all do it if we find a legal way of doing it as the Millibands did with their house.rather than taking the high moral ground politicians should be pressurising HMRC to tighten up the rules.Even Alistair darling was complaining about tax avoidance when he was chancellor.

    • Todd Unctious

      The Tory party are in the pay of the CoLC and their network of tax havens. They exist only to do their bidding. What a surprise that Fraser , who works for the tax haven based Barclay’s, extols the joy of tax avoidance.
      Google pays its chief executive more than it pays in tax. Google earns £4,000 million a year from the UK and pays barely £12 million a year in tax. That is 3%.

      • Mr B J Mann

        Ooooohhhhhhh, how can Google earn £4,000 MILLION a year from the UK when be pay NOTHING for its services?

        Fraser says so!

      • Copyright101

        The average Google user is not a Google customer, the average Google user is the product that Google is selling to its actual customers.

        • Mr B J Mann

          Yes, but the actual customers then charge the average user!

  • Klint

    Nothing’s free. We ‘pay’ Google by tacitly providing it valuable information with our browsing habits.