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npower has paid no corporation tax in 3 years 
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npower faces customer anger as petition calls for full payment of taxes:
http://www.guardian.co.uk/business/2013 ... x-petition

So, despite ever-increasing power bills, they have avoided paying any corporation tax in the last 3 years through clever accounting. Completely legal, apparently. :roll:

Quote:
We've not paid corporation tax because we've been investing hundreds of millions to keep the UK's lights on

So, since when has investment meant paying no tax? Investment should come out of your vast profits surely (of which must be significant considering the increasing prices we're all paying)?

EDIT: Petition signed (for all the good it'll do)... https://secure.38degrees.org.uk/page/s/ ... s#petition

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Thu Apr 18, 2013 4:09 pm
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Capital investments have always been tax deductible. The Guardian's own tax avoidance scheme is far worse than the one they are complaining about in this story. Let me know when there is a petition for the Guardian to end its rampant hypocrisy either by shutting up or paying its own taxes.


Thu Apr 18, 2013 4:52 pm
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I'm curious - I've googled for 'Guardian tax avoidance' and I'm just getting Guardian articles about it.
Got a link?

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Thu Apr 18, 2013 5:01 pm
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steve74 wrote:
Quote:
We've not paid corporation tax because we've been investing hundreds of millions to keep the UK's lights on


So let me get this straight, them simply doing the job we are all paying them to do is enough to justify them not paying any tax? Since when is that a thing? Isn't 'keeping the UK's lights on' pretty much the absolute minimum we expect an electricity company to do?


Thu Apr 18, 2013 5:54 pm
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ProfessorF wrote:
I'm curious - I've googled for 'Guardian tax avoidance' and I'm just getting Guardian articles about it.
Got a link?

your powers of google-fu fail you :D
link
link
link

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Thu Apr 18, 2013 6:05 pm
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bobbdobbs wrote:
your powers of google-fu fail you :D
link
link
link


:) Cheers

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Thu Apr 18, 2013 6:08 pm
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TBH, I didn't know about the Guardian either, but others are reporting this story - I just couldn't face posting a link to one of the tabloids! From what I've read, the Guardian have reduced the amount they paid - I suppose they at least paid something, unlike npower.

So, just so I understand this correctly, if a company makes £XX million profit but says it's investing that back into the company, it doesn't have to pay any tax? I thought you had to pay tax on those profits, regardless of what you do with what's leftover.

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Thu Apr 18, 2013 6:31 pm
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I'd be pretty miffed if I were taxed on the money I spent on the monitor I just bought.

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Thu Apr 18, 2013 7:49 pm
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tombolt wrote:
I'd be pretty miffed if I were taxed on the money I spent on the monitor I just bought.

Err.. you were. More than once, probably.


Thu Apr 18, 2013 7:57 pm
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steve74 wrote:
So, just so I understand this correctly, if a company makes £XX million profit but says it's investing that back into the company, it doesn't have to pay any tax? I thought you had to pay tax on those profits, regardless of what you do with what's leftover.
The money a company invests in capital and plant is unrelated to the profit or losses it happens to make at the same time. The idea of investments is future (taxable) profits.

However, tax codes across the entire developed world allow such investment in the future to be offset against current corporation taxes in order to encourage that sort of activity; because it is that type of investment that drives economic growth and generates future taxes, jobs and all those other good things we like so much. Once a company stops investing and starts living off the rent from its former investments, they are expected to pay lots of tax, and don't get any more offset. Whether that is how it works out is a separate question.

It's important to understand that tax policies (when done right) are not only about raising revenue. They are also supposed to provide incentives for public goods (like investments that increase productivity) and to suppress bad things (like smoking).

This looks a lot like an instance of lots of people getting arsey about a perfectly reasonable use of a pragmatic and sensible tax break. I mean FFS, these guys are actually spending the money they are claiming back to build great big industrial things. Pret-A-Manger probably uses the same tax benefit to claim back money they spend fitting out sandwich shops with aluminium decking; aren't we whinging about the wrong guys here?


Thu Apr 18, 2013 8:41 pm
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jonbwfc wrote:
tombolt wrote:
I'd be pretty miffed if I were taxed on the money I spent on the monitor I just bought.

Err.. you were. More than once, probably.


I don't know, I won't be paying corporation tax or income tax on it and I shall be reclaiming the vat, so not sure where the tax would be coming from.

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Thu Apr 18, 2013 9:01 pm
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This also ignores transfer pricing and "management fees' that can eliminate any remaining profits. Plus the fact that many companies will borrow excessively so can offset their interest against the profits and then the funds will be moved offshore where they will not be taxed. The Glaziers do this to Man United's accounts. The non payment of taxes will mean that taxes will fall on the average person rather than the rich as they will get paid offshore and so outside the UK tax system. So you can expect an increase in the tax burden over time on the average worker.

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Thu Apr 18, 2013 11:06 pm
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