You've probably heard about how big corporations can have such a 'privilege' to avoid taxes and get away with it. Just wondering, what's your opinion about it?
Perhaps just like any other people, you'd say, “I always pay my taxes in the full amount, on time. How could they do that? They are cheaters!” You'd also probably say, “That's rich people's game. Rich people steal from poor people by paying fewer taxes.”
Bitter, you'd probably put the blame on rich people and big corporations. But this article may change your mindset. Read on.
The so-called “loopholes” that seemingly available to rich people and big corporations do exist; however, we must clarify that such “loopholes” are also accessible to an average person and a local small business. And unlike what many told you to believe, such loopholes are legal.
So, instead of being bitter, furious and feeling injust, let's step back and ask this question to yourself: “If they can do it, how can I do it, too?” It sounds challenging, but if you find the right information and consult with the right consultant/lawyer, you'll learn that it's not that hard to do what the big corporations do.
Case study: Unique tax protest by the residents of Crickhowell, Wales, United Kingdom
Here's a recent, prominent example: The Powys tax rebellion in Wales, United Kingdom.
Led by traders in a Welsh town Crickhowell – owners of the local coffee shop, book shop, optician, bakery and salmon smokery – the Powys tax rebellion's members discovered the loopholes capitalized by multinational corporations to avoid paying taxes in the UK. In short, they want to take the entire town to “offshore”.
The local business owners and residents of Crickhowell, just like you, are furious knowing that big companies can get away with not paying their corporation taxes (e.g. Caffe Nero, GBP1.2 billion in sales, zero corporate tax).
To illustrate the inequality: A local trader found out that he paid seven times more corporate tax than Facebook's GBP 4,327 in the UK last year.
More “name shaming” facts: Starbucks paid GBP 8.6 million in corporation taxes – in total since 1998. Amazon UK paid GBP 11.9 million in corporation tax on GBP 5.3 billion in UK revenue. Google paid GBP 11.6 million on GBP 3.4 billion in UK revenue. The list can go on and on.
In essence, they do want to pay their taxes in all fairness sake – but they want everyone to pay their fair share. Why? It's simply because, in the current setting, local businesses are the ones that shoulder the UK tax burdens while big businesses get the leeway.
So, in a unique tax protest, instead of getting angry and do nothing, they decided to take smart action: Trying to mimic what Starbucks and co. can do with their taxes.
How do they manage to do it?
Starbucks, Google, and Facebook hire expensive lawyers to manage (read: minimize) their tax returns. The local businesses and residents in Crickhowell do it with the help of experts, as a part of a BBC2 documentary, titled The Town that Went Offshore. They crafted a DIY tax plan to HMRC, a department that is responsible for handling taxpayer's affair in the UK. The response is positive, as everything laid out is legal.
What's the impact?
The documentary will be screened in 2016; so until then the impact is yet to be known, but logically speaking, the DIY tax plan submission to HMRC will have one impact that UK's government can't afford to overlook: If they don't act, DIY tax plan submission done by the residents of Crickhowell could catch fire and followed by other towns as well.
As interesting as the documentary will be, what the town of Crickhowell is doing raised one important conclusion: Unlike what many would want to convince you the otherwise, everyone can go offshore legally.
Setting up an offshore company, opening an offshore bank account, investing offshore, protecting assets offshore, and taking advantage of offshore tax benefits are also accessible to an average individual or local business. And yes, just like what the residents of Crickhowell have found out, they are perfectly legal – until your local Government says the otherwise.
If you are intrigued in learning more about the possibilities, talk to us (free consultation.)