Formula One pays just £1million corporation tax on £300million profit

[VNA]

F1, which is run by billionaire Bernie Ecclestone, made a net contribution of £945,663 ($1,468,000) in corporation tax in 2011 on revenues of £980m ($1.5bn) – even though the majority of its commercial operations are based in the UK.

http://www.independent.co.uk/news/uk/pol...rnalSearch

[Lawrence]

And?  They haven't done anything illegal.

[DryRob]

And?  They haven't done anything illegal.

Are you a politician?

[Lawrence]

No. If what they do is so bad then the law needs to change.

[DryRob]

I know, I was just being a shit stirrer. I lost faith in the rich doing the right thing years ago.

[rustyrider]

Whoever wrote the article knows naff all about how F1 is organised either.  To make the point that none of the teams pay any tax is irreverent.  The teams are nothing to do with Mr E's empire and don't pay tax because they don't make a profit.  The Ferrari F1 team is a tax write off for  the parent company for instance.  The same goes for the others.  Whatever income they receive is spent on running the team, they aren't in business to make a profit.

At least they are paying some tax, more than you can say for Starbucks......

[VNA]

Whoever wrote the article knows naff all about how F1 is organised either.

Did you read it?  Honest?

To make the point that none of the teams pay any tax is irreverent.  The teams are nothing to do with Mr E's empire and don't pay tax because they don't make a profit.

The article makes it clear that they are separate from the F1 business.  Whether they make a profit or not is up to them, there are certainly opportunities to do so, but again the article makes it clear that they don't pay tax cos they don't make any profit.

But Bernie's UK based business pays only 1 million tax on a 300 million profit.  It is making a profit, and it's making as much as it can.  So that's 71 million quid light on the tax.  Amazing.

And?  They haven't done anything illegal.

Indeed.  But clearly billions upon billions of tax are going astray and our politicians are doing nothing about it.  And they are getting away with it.

Just thought it was interesting that F1 is fiddling the books too.

[dBfazer600]

Such companies have a wider choice on their geographical location as in the average member of the population society do not. Therefore the lower taxable population are by default buggered as they do not have the money capable to employ those with the knowledge of how to bypass their taxation. Therefore  24% of profitable taxation can be made to look like nothing. Although the F1 business have not done any thing illegal in the eyes of the law set by out political establishment. It is time that that not just Starbucks but also all tax evasion corporate business are named and shamed regardless what they bring to our country.

It is down to the Government to bring in legislation to ensure we are all in it together. Yet as with the smoking advertising on their packages it is those who influence you that will get their way.

Money talks, bullshit walks unless your within the circle that influences.

Daz

[cable tie]

Politicians will say its wrong to do so but reality is there doing it exactly the same themselves you just don't no it ! and no one is braking the law with these schemes and these corp bods have an army of accountants and financial advisers to make sure there doing what's financially legal its all mind games give this big press takes our minds from the truth that this country is fooked.

Ask yourself if you could pay less tax every week and it was legal would you not do it  !

The truth being i cannot see peeps jumping up and down because immigrants have been given the rights to live here take our benefits and state pension, most/not all will never work and PAY NO TAX but will get everything in return and a dole chq every week for doing nowt but breathing ...

I can't see no one complaining about this !

[VNA]

The truth being i cannot see peeps jumping up and down because immigrants have been given the rights to live here take our benefits and state pension, most/not all will never work and PAY NO TAX but will get everything in return and a dole chq every week for doing nowt but breathing ...

Not sure what you are saying.  But recent reports have shown we need lots more immigrants if our economy has to have any long term chance of recovery.  The vast majority of immigrants work hard and pay their tax, if they were 'removed' our economy would die overnight.  With an ageing demographic we are going to be stuffed without lots more immigration. 

It is down to the Government to bring in legislation to ensure we are all in it together. Yet as with the smoking advertising on their packages it is those who influence you that will get their way.

Indeed.  But tax dodging for big companies has become even easier since George got his hands on the economy. (not that it was difficult before)  We also seem to have a policy of letting foreign companies take over public services and even major utilities.  Whilst many, thought not all of these do pay their corporation tax, they then tax large amounts of their profit out of the UK.  Of course all that your millionaires cabinet (perhaps it will soon be billionaires cabinet) care about is what they can stuff into their back pockets.

Our economy does not look as if it has any real hope of making any sort of real long term recovery.  It's being set up to fail by a bunch of thieves who are grabbing what they can while they can.

Yup Bernie has been known for his generous political donations in the past.  I doubt if he just started tax dodging yesterday.

Here's another thing.  I can't remember Bernie owns F1 outright or he has a % stake, but he'll also pay himself a salary.  I'd guess it's substantial and that he pays sod all tax on it.  Yup more tax dodging. 

Talking of Starbucks and umm coffee.  I love coffee but I've never touched Starbucks.  If your local family owned coffee shop is a few quid out on their tax returns, you can bet the tax office will actually spend a not inconsiderable amount of money making sure that little business coughs up - same for me too, a couple of quid out and they peruse me relentlessly.  But Starbucks they don't pay any tax. 

Money talks, bullshit walks unless your within the circle that influences.

There is no bigger influence than public influence.  But.........

Meanwhile we have the red tops to keep us ranting about benefit cheats.  Doh!

[rustyrider]

It's not tax dodging, because tax dodging is illegal.  It's paying extremely knowledgable accountants probably an awful lot of money to work their way round the tax laws so none are broken but the minimum amount of tax possible is paid.

If I could do it I would and I suspect you would too.

[VNA]

It's not tax dodging, because tax dodging is illegal.

Yes it's tax dodging, it's a way round paying 24% corporation tax.
72 million tax due, only 1 million paid.

No loopholes are not illegal, that's why they are loop holes. 

It's paying extremely knowledgable accountants probably an awful lot of money to work their way round the tax laws so none are broken but the minimum amount of tax possible is paid.

It's actually paying the same accountants who have done work for the government as consultants.  A of money?  Well sure but it's a tiny % of the 72 million saved.    It's a scam from one end to the other.

And of course everybody knows the loopholes are there, what they are, and indeed how they can be closed down.  But guess what, nothing happens.

If I could do it I would and I suspect you would too.

 
Well sure nobody wants to pay more tax than they can.  And I guess it's hard to blame companies and individuals from skipping tax if they can legally do so, but that's hardly the point is it.

I'm paye, I can't dodge my tax.  I can't dodge VAT, or a dozen other taxes I could mention.  I'm sure there is something I've dodged at some point (hey I paid my joiner cash!), but lets face it, the little men don't get to dodge tax.  And it's the little man who will make up the big man's shortfall.  And the shortfall is getting bigger and bigger and bigger, as fewer and fewer of the big boys pay any tax.

Of course it's not just a shortfall.  Stuff that needs to happen - infrastructure etc - it just doesn't happen.

[DryRob]

You could get around PAYE by leaving your job and starting up work as an independent contractor but you loose all employment rights like sick pay, redundancy, holidays and all that. The same would be true of VAT as you could put a lot of your stuff down as a business expense but if you wound up, you would loose everything. Don't know what business rates are like though and you'd need an accountant.

[VNA]

So following that logic, everybody who's ranting about benefits and all the stuff they get should;

leave their job and live off benefits!  Have kids left right and centre I guess.  Work for cash on the side.  Buy a 150 inch telly.

[Tiberius Onklevaart]

Don't be ridiculous Andy














A telly can only go to 60 inches by law

[VNA]

Sorry.

Bloody tax dodging bastards.

[DryRob]

Where did I mention benefits? I was just suggesting a way to get around paying PAYE and the possible consequences of doing so.  I doubt that you could do it for most jobs anyway and why bother? You'd probably end up with the same in your pocket at the end of the week but loose all employment rights.

[rustyrider]

There are advantages to not being on PAYE and becoming a self employed sub contractor to your employer but as said, you'd lose most of the advantages of being an employee.  I'm on PAYE for the day job but am also registered as self employed for contract work I do as a sideline.  I have to fill in a tax return where I put in my income from my PAYE employment from the day job and then have to account for the income from the contract work.  The advantage there is that I can claim against tax any expenses I incur as a result of the self employment.  When I visit a customer to do the work, I can claim 45p a mile as a business expense, any tools or specialist clothing I buy to do the work, I can claim as an expense.  So, unlike the day job, I am not taxed on the full income, only the profit after the expenses have been taken out.  BUT, I also have to pay self employed National Insurance contributions on top of what I am paying through PAYE although if my self employment earns me less than £5k a year I can claim an exemption on this.

If I was to take out a loan to buy equipment that I need to do the work, I could claim the interest on that loan against tax.  This is how I understand F1 does it.  They take out a loan to provide operating capital and the interest payments on that loan are claimed as a legitimate business expense so they are not taxed on that amount.  The fact that the loan comes from another, legally separate, company within the same group is irrelevant but it does mean that the money all comes out of the same bucket and doesn't actually go anywhere.

There's a big difference between tax evasion, which is illegal, and tax avoidance by playing the system which isn't.  As I previously said, we would all, even VNA, do it if we were in a position to, it's just that most of us aren't.

[VNA]

If I was to take out a loan to buy equipment that I need to do the work, I could claim the interest on that loan against tax.  This is how I understand F1 does it.

And fair enougth.  But,

The fact that the loan comes from another, legally separate, company within the same group is irrelevant but it does mean that the money all comes out of the same bucket and doesn't actually go anywhere.

Exactly.  So Bernie borrows the money for his right hand pocket out of his left hand pocket.  So if he swaps the money over in his pockets he doesn't have to pay any tax!

Now that sucks big time.  But will our government close down these loop holes  (umm no).  And if no big companies are paying their corporation tax, well where is the money going to come from.

Or is it simply the case that people in the UK want a tax system where the less you earn the more you pay.  As that is what we have.

Don't you think Bernie should be paying some tax, maybe even his fair share?

[rustyrider]

It's a loophole that would be virtually impossible to close.  A limited company is a legal entity and has the same status in law as a person.  So if one limited company loans money to another, it's just the same as if I was to loan you some money, we are completely separate legal entities and there is no way that anyone could say that we aren't.

I'm not happy with the way tax works either and if there was a legal way of reducing what I pay I would.  I had a good year last year with the day job.  I got paid additional allowances due to the Olympics and was also recognised for doing a good job by getting a bonus.  That put me very close to the 40% tax rate on what I was paid for the day job.  I also had a very good year on a private contract but I'm only going to see 60% of what I was paid for that.  Where's the justice in getting paid less for working bloody harder and doing a good job?