News - HMV to talk with banks due to disappointing performance

[TheAnimus]

Mearly that paying less tax gave them more profit to have faster growth and stronger buying power to push down prices further, over the last few years.

No, it didn't.

Profit that is taxable by corperation tax is money that has not been spent on developing the company. It is money that is going to the stock holders. Also HMV doesn't rely on using profits to grow the company, it relies on securitised investments.

Yes stupid, really stupid, I bow to your superior knowledge.

I'm just sick and tired of this whole tax bandwagon. The lady who was accusing the companies of dodging their tax, some sources are saying is involved in it herself, the labour MP afterall is one of the richest in parliment, with some saying she has a wealth in excess of £50M. Sadly she has stock holdings in her family company which is known to help people do exactly the pratices she is complaining against. I'm sickened even more by the Guardian, which is 'putting its weight' behind certain political groups protesting say Vodafone, when the Guardians owner company did exactly the same dodging with the sale of Auto Trader.

My point is the tax complaints are incorrect. The real time HMV where hammered was due to VAT not been charged by Play.com et al, that loophole has been closed.

Also that you should feel ashamed for saying something, which is so obviously wrong.

[TheAnimus]

Once Amazon starts paying more tax,I wonder if they will be as cheap as they used to be??

As in my big post below, its not really that 'unfair'.

It only effects the equity holders really they will just receive less return on their investment. As Amazon has no difficulty attracting such investment, it won't really change their prices at all.

This whole tax dodging thing is a little out of context. When you consider the Total Taxation, the corperation tax is really not that much of it. As my rough worked example above demonstrates, but we can go a little bit further if people want?

[mcmiller]

The lady who was accusing the companies of dodging their tax, some sources are saying is involved in it herself, the labour MP afterall is one of the richest in parliment, with some saying she has a wealth in excess of £50M. Sadly she has stock holdings in her family company which is known to help people do exactly the pratices she is complaining against. I'm sickened even more by the Guardian, which is 'putting its weight' behind certain political groups protesting say Vodafone, when the Guardians owner company did exactly the same dodging with the sale of Auto Trader.

Whilst I agree that it is hypocritical I dont see how you can use this to justify amazons stance...

[bridges009]

Won't be shedding a tear. Back when I was a teenager with no option to buy online I often had to pay the best part of £20 to buy any semi-obscure albums from them. If you cultivate a customer base who'd just as happily by their ****ing X-Factor CD's from ASDA then you better be able to compete with them.

[TheAnimus]

Whilst I agree that it is hypocritical I dont see how you can use this to justify amazons stance...

I'm not, I'm saying don't complain.

What they are doing is completely legal.

That is the problem. The people who should be "appologising" are the law makers who've allowed such pratices.

Also I think people are really overstating the effect. Amazon's corperation tax payments have had no significant effect on HMV. I would like someone to explain how they do?

Amazon for one order pay what? cheap shipping and logistics to their centre, vrs complex ones to a store, zero time of a sales person, vs at least 30 seconds at the till. The shop has rates, rent, security, electricity, decoration etc. These are all significant costs amazon doesn't.

To talk about amazons corp tax in some way being 'un-competative' is frankly moronic because it excuses the real flaws in HMV model.

[ik9000]

Seems odd - any HMV store I've been in always tends to be packed out. Obviously no-one actually buying stuff, just looking.

exactly. We wander in, find something we like, then find they're charging obscene prices so put it back and calmly walk out the store. And I don't care one bit about HMV. They used to charge £20 for CDs and got hammered when Fopp opened and sold them for £5 a pop (and still made profit). If Fopp hadn't expanded too soon (and banks hadn't been lobbied to reject lending them any more money when the downturn hit) HMV would be gone already with or without Amazon. I've never in recent years found an offer in HMV that hasn't been beatable online or in Fopp (one of the re-launched stores). HMV are just too greedy. Lower prices to Fopp levels and stuff would fly off the shelves. Discount to make profit. Why don't they try it - go all in - as the saying goes, since it looks like they're at a point where there isn't much left to lose.

And as an aside, business is business. Success in one generation doesn't mean you have a right to be there when the market moves on. Innovate or die. Ask the steam train manufacturers.

[mcmiller]

I'm not, I'm saying don't complain.

She's doing it on the behalf of the UK public so whilst she maybe being hypocritical she still has to do her job.

What they are doing is completely legal.

That is the problem. The people who should be "appologising" are the law makers who've allowed such pratices.

Youre correct whilst theyre following the letter of the law they are certainly not being moral after all when someone steals from starbucks or one of their stores burns down they still expect the police and fire service to help. *correction/edit* council tax pays towards fire and police forces.

I personally think that companies should be forced to contribute to society, if they wont do so willingly.

Also I think people are really overstating the effect. Amazon's corperation tax payments have had no significant effect on HMV. I would like someone to explain how they do?

Amazon for one order pay what? cheap shipping and logistics to their centre, vrs complex ones to a store, zero time of a sales person, vs at least 30 seconds at the till. The shop has rates, rent, security, electricity, decoration etc. These are all significant costs amazon doesn't.

To talk about amazons corp tax in some way being 'un-competative' is frankly moronic because it excuses the real flaws in HMV model.

Agreed I'm not really sure how much of a real difference amazon paying very little makes to their prices.

[TheAnimus]

She's doing it on the behalf of the UK public so whilst she maybe being hypocritical she still has to do her job.

Her Job... Which she isn't and hasn't been doing. If I had the power to say make a law against, hypothetically speaking, tax avoidance. And I didn't. But got money from people avoiding such thing. I wouldn't be hypocritical, I'd be worse than the people doing the loophole. Much worse.

Youre correct whilst theyre following the letter of the law they are certainly not being moral after all when someone steals from starbucks or one of their stores burns down they still expect the police and fire service to help. *correction/edit* council tax pays towards fire and police forces.

I've said it soo much lately, VAT. Its a bloody great, fair tax. Hard to doge legally and ilegally.

Thing is we agree that it has negligable effect on HMV the amount of corp tax amazon are paying. I also hate how the Guardian has directly blurred the distinctions between taxes. I for instance pay no cigerate tax because I don't smoke. No one should be complaining that I'm not paying tax because I'm not applicable for one tax. I still pay NI, Concil, Vat, Income, CGT etc.

[mcmiller]

If youre trying to say that she gets to decide the law, then youre quite clearly mistaken. In her role she maybe able to suggest what changes should happen (i would need to check) but there are a whole series of processes which need to happen before the law gets changed.

Unless Im mistaken the only person who pays VAT is the end consumer... how does this make up for companies paying little corp. tax?

[j.o.s.h.1408]

That's all I ever do if I go into a HMV!

What a lot of you are forgetting as well is that the approach we all have towards music is changing all the time, HMV don't stock the sort of music I am into for example. Everyone is developing very individual music tastes and the top 40 charts are probably only bought by 10% of music buyers maybe less, but being number one in the charts no longer means everyone knows who you are anymore like it used to 20 years ago. Don't forget we are also lazy and the ability to download (legally or illegally) is not going to help matters.

It's even easier with spotify

[PmanUk]

Problem is I used to work for a credit insurance company and for the last year they have been marked as "Distressed"

Ie: the insurance company withdrew cover and was waiting for them to fail.

They are rarely wrong

[TheAnimus]

If youre trying to say that she gets to decide the law, then youre quite clearly mistaken. In her role she maybe able to suggest what changes should happen (i would need to check) but there are a whole series of processes which need to happen before the law gets changed.

My point is she complains about it, outrages about it, does it herself, does nothing to stop it despite being the ones who would say table an early motion?

Unless Im mistaken the only person who pays VAT is the end consumer... how does this make up for companies paying little corp. tax?

Who pays for the corp tax, unless I'm mistaken, its the end consumer. The same end consumer that pays the VAT, the NI for the staff, the wages for the staff, the staff NI, the staff income tax, the...... list goes on a bit. It is thoroughly disingenious to look at just corp tax, as ulimately a foriegn company (Amazon is NOT english) that simply trades here remotely would pay even less.

What people are wanting is some strange division of where profit is accumilated. Take a fruity fondlejab, design, apparently in Califronia, manfactured in a sweatshop in china, with South Korean, Tiwanese parts. The BOM for one is less than half its RRP. Who takes what cut of the profits? Apple have made billions from the UK market, yet they pay no corperation tax, its *outrageious!* Obviously I'm taking the piss here. But hopefully the exercise shows, where should the profit be made, where should it be taxed, is not trivial, and in fact that value added taxation, is the only way to really tax such a company.

The point is, again, that corp tax will have had so very little impact on HMV's troubles. Virtually no impact at all.

In case you can't tell, I think we should just abolish corp tax, NI (both kinds, talk about a tax on jobs!) have much more VAT, not delinate between CGT and Income. We should also either abolish tax credits (yes, tax someone, then pay it back, thats not going to de-value their money is it!) or use the concept (ie people don't earn enough always for their needs) and go flat rate with tax, with rebates only via credits etc.

Corperation tax for HMV is of pretty much 0% consiquence (look HMV have paid NOTHING) compared to my suggestions there.

[TheAnimus]

They are rarely wrong

Because they can also be self-forfilling.

[ik9000]

My point is she complains about it, outrages about it, does it herself, does nothing to stop it despite being the ones who would say table an early motion?Who pays for the corp tax, unless I'm mistaken, its the end consumer. The same end consumer that pays the VAT, the NI for the staff, the wages for the staff, the staff NI, the staff income tax, the...... list goes on a bit. It is thoroughly disingenious to look at just corp tax, as ulimately a foriegn company (Amazon is NOT english) that simply trades here remotely would pay even less.

What people are wanting is some strange division of where profit is accumilated. Take a fruity fondlejab, design, apparently in Califronia, manfactured in a sweatshop in china, with South Korean, Tiwanese parts. The BOM for one is less than half its RRP. Who takes what cut of the profits? Apple have made billions from the UK market, yet they pay no corperation tax, its *outrageious!* Obviously I'm taking the piss here. But hopefully the exercise shows, where should the profit be made, where should it be taxed, is not trivial, and in fact that value added taxation, is the only way to really tax such a company.

The point is, again, that corp tax will have had so very little impact on HMV's troubles. Virtually no impact at all.

In case you can't tell, I think we should just abolish corp tax, NI (both kinds, talk about a tax on jobs!) have much more VAT, not delinate between CGT and Income. We should also either abolish tax credits (yes, tax someone, then pay it back, thats not going to de-value their money is it!) or use the concept (ie people don't earn enough always for their needs) and go flat rate with tax, with rebates only via credits etc.

Corperation tax for HMV is of pretty much 0% consiquence (look HMV have paid NOTHING) compared to my suggestions there.

There is however a problem with this. Financial services do not, generally speaking, pay VAT on trading profits IIRC (though this is not my field so I could have this completely wrong.) If so then Corp Tax etc in such cases is very relevant (and is presumably why the government is so desperate to appease those companies - it wants the revenue from them)

[TheAnimus]

There is however a problem with this. Financial services do not, generally speaking, pay VAT on trading profits IIRC (though this is not my field so I could have this completely wrong.) If so then Corp Tax etc in such cases is very relevant (and is presumably why the government is so desperate to appease those companies - it wants the revenue from them)

Good question! I don't know the answer. As it stands corp tax has worked quite well with the demon financial services industry.

The issue is this, anyone, from any country can trade the NASDAQ say (this is a techie forum after all!), in the maybe via ADRs, but it can be done, by someone in say Grand Canaries. So how do you tax them. If they are not based on your soil. You can't, at all.

If someone is based in the UK however you could tax their earnings. That is more than the alternative!

[ik9000]

but if you tax earnings and not company profits rich folk set up a company - pay themselves sweet FA - less than the minimum for income tax, then the rest goes in company shares, trust funds, etc and the net tax they pay is less than joe-average's 25% income + NI hit. It's this sort of horse crap the government needs to address far more than amazon deciding to have its head office somewhere overseas.