As the corporation tax figures were published this week, it once again got me thinking, “Why do those who have so much, want to pay so little?”
Because of this, somewhat bizarrely, I found myself congratulating pop star, Ed Sheeran, for paying his full corporation tax liability on £27 million profits.
Without teaching people to suck eggs, corporation tax is what is paid on profits after all overheads have been considered (salaries, machinery, equipment, computers etc). The amount is 20% and 21% of a certain amount that a business like mine would ever have to worry about.
The amount Ed Sheeran would have paid is around £5million, which is quite large considering Starbucks only paid £3.2million on around £162 million and Amazon carried out an even better trick paying just £4.5 million on £2 billion profits . Facebook paid £15.8 million on £1.3 Billion profits which is an improvement on the year they managed to pay less than me (around £4k).
I would guess that Sheeran still thinks that pocketing north of £20 million for, lets be honest, mediocre songs, is nice work if you can get. He can also satisfy himself that that he has no need to put razor wire around his house for when the pitchforks start coming.
Ed Sheeran has done his bit; he has earned vast amounts of money and made a substantial contribution to the treasurer’s pot in the country that has nurtured and educated him. Even though I am not a fan of his music, I am a fan of his attitude.
He said in a recent interview; “It’s like earn a penny, spend a penny with me. I don’t have much value on it. I have more value on my friends and family. A lot of my money goes to local charities and children’s hospitals. I have enough to be comfortable, the rest can go to helping people”.
What is remarkable is that because I am satisfied that Ed Sheeran has done what is right, I am often labelled a raging socialist or a hypocrite, as many people will claim that I would avoid corporation tax if the opportunity arose and if I didn’t, I am stupid.
The fact is, both are not true. Admittedly I do not have the resources to avoid corporation tax, so I just accept it and pay it, but if I had just turned in a profit of £162 million I think I would almost gloat about paying 30 odd million in tax, because surely, it is something to be proud of.
How more patriotic can you be than giving such a walloping great sum of tax to the country that gave you the opportunity to be filthy rich? How much money do people need and how hated do they actually want to be?
The fact is, as a nation we have almost accepted that tax avoidance is just dandy. I even know some clowns who are impressed by companies and banks that bleed the economy into austerity and take a bail out when there is nothing left.
With regards to individuals like Gary Barlow for instance, there is an argument that sometimes these pop stars and actors don’t know they are corrupting the system with legal tax avoidance, as it is all undertaken on their behalf by accountants.
However, having spoken to my own accountant about these avoidance loopholes, he reliably informs me that whilst an individual may not know how a loophole works, they WILL know that their accountant is operating an avoidance scheme in their favour.
This is because the accountancy firm would need permission to carry out such a complex and potentially damaging act with regards to public relations. Someone legally avoiding corporation tax will be forewarned of the taxation information being available in the public domain.
So, basically, when these individuals are exposed and they plead ignorance, they are playing games with the truth before doing a charity gig to keep their reputation intact and stay on the road that leads them to a Knighthood.
If these people did the right thing, the country would be a nicer, wealthier and more respected place, and those who paid their liabilities would still be rich beyond their wildest dreams, living a fantastic lifestyle.
Ask Ed Sheeran.