sign the petition

[one_a_day]

My question...

Presumably you'd accept that even if the rates were higher, they'd still be lower than ALL our competitors, therefore making it the better option nonetheless.....yes or no.

NO

[WanChaiMiller]

For the umpteenth time: 'no'.

Surely it's more to do with the cost of relocating, where your markets are, cost of relocating your staff (or find the same quality staff in the new country), retaining staff, cost of the owners emigrating, moving kids and family to a new country, languages you are able to speak, overhead costs....I could go on.

It may well be much cheaper to staying put and paying an extra 5% CT.

[KerrAvon]

Surely it's more to do with the cost of relocating, where your markets are, cost of relocating your staff (or find the same quality staff in the new country), retaining staff, cost of the owners emigrating, moving kids and family to a new country, languages you are able to speak, overhead costs....I could go on.

It may well be much cheaper to staying put and paying an extra 5% CT.

MMM wanted a yes no answer to a question that does not lend itself to such a response.

Given that his logic on the point is fundamentally flawed, 'no' is the best fit answer.

[WanChaiMiller]

So spin it round. If its correct Germany has 30% Corp Tax.....why arent German companies falling over themselves to come here.

[KerrAvon]

So spin it round. If its correct Germany has 30% Corp Tax.....why arent German companies falling over themselves to come here.

For the same reason that I have given to MMM time and time again, which is that Corporation Tax is just one cost to business (arguably it isn't a cost, given that it is a tax on profit, but the effect is the same for the purposes of this thread). A decision about where to operate is a fine one based upon looking at a number of competing factors.

If there is an argument against the proposition that increasing the tax rate reduces the attractiveness of the UK to do business and will therefore lead to lower levels of investment then I am still waiting for someone to give it. As Grist points out, making a change to such a significant factor alters the equilibrium and will necessarily produce a reaction, with none of the possibilities being job/worker friendly.

Many German companies have a British presence, two of them, Siemens and BMW, have warned that they will re-think their presence here if Brexit increases their costs. If there are reasons to believe that they would not react in a similar fashion to increased costs imposed by a Labour government then I’m still waiting for someone to give them.

An increased Corporation Tax rate is bad for levels of employment and investment. It really is as simple as that. With that being the case, why can't a Labour supporter indicate how many job losses they consider acceptable to fund the tuition fee bribe?

[WanChaiMiller]

If you start increasing corporation tax rates in the current economic climate you will see a cut in investment along with many, many smes going bust.

It is the thousands of smes up and down the country that contribute most of the tax take and things are tough out there.

We will turnover £17m this year and make £600k pre tax profit. At 20% that leaves us £480k in retained earnings which is used for working capital and future investment. £480k for a company our size and employees 130 people is a pittance.

Last year, we used our retained earnings to open a branch in the North East. We have employeed 15 people.

We are looking in the future to open branches in Scotland and the South West. If we haven’t got the working capital and retained earnings then we won’t be doing so.

In our industry, 23 companies that have recently filed their accounts are showing a loss. The CT rates don’t effect these but many more have seen reduced profits. An increase in CT would have a further damaging effect on these companies.

There are 5 multinationals in our industry with turnover around £200m per year. I used to work for one. Increase CT rates and they would simply shift profits abroad which is easily done by increasing the price of the product from the factory. I have seen them do it. I have also seen them shift profits to the UK by reducing the cost of the product from the factory.

Any increase in CT rates wouldn’t increase the UK tax paid by these companies but it would harm us.

Investment will reduce the companies Corp Tax liability. Not sure how your compny runs but surely 'working capital' wont come out of nett profit.

3.5% nett profit is ptetty good considering the UK average is below 3% - and other companies in your sector run at a loss. I think Tesco at ther height achieved 3% pre tax profit.

[one_a_day]

Investment will reduce the companies Corp Tax liability. Not sure how your compny runs but surely 'working capital' wont come out of nett profit.

3.5% nett profit is ptetty good considering the UK average is below 3% - and other companies in your sector run at a loss. I think Tesco at ther height achieved 3% pre tax profit.

Where else can working capital come from? If you're running at a loss then you will soon go bust.

Any kind of profit is good in the current economic climate but in our industry 3.5% isn't brilliant. I have worked in this industry since 1999 and consistently achieved 7%.

Investment obviously reduces future CT, whether it is direct through the P&L or via Capital Allowances, but the money for the investment has got to come from retained earnings which has already been taxed. The higher the tax rate, the lower the retained earnings.

[gm_gm]

Corporation tax receipts are less than a third of that collected in income tax, nearly three times less than NI receipts, and well less than half of VAT collections.

If you also consider half the NI is paid by employers its another tax that employers have to budget for at 13.8%, German employers pay less than half that.

We cant adjust VAT due to EU rules, but we can alter Income tax and NI a very small adjustment in certain areas would bring more revenue in and not affect investment

[WanChaiMiller]

Corporation tax receipts are less than a third of that collected in income tax, nearly three times less than NI receipts, and well less than half of VAT collections.

If you also consider half the NI is paid by employers its another tax that employers have to budget for at 13.8%, German employers pay less than half that.

We cant adjust VAT due to EU rules, but we can alter Income tax and NI a very small adjustment in certain areas would bring more revenue in and not affect investment

The UK can adjust vat.

[gm_gm]

The UK can adjust vat.

Sorry, meant to EU have controls on VAT we can adjust but not below 15% due to EU rules, our VAT threshold is the highest in the EU meaning that the masses of receipts we collect is due to scope and consumer spending...year to April £128.2bn compared to £53.3bn in corp tax