Tax and Google

On 2 February 2016, Alphabet (Google's parent company) overtook Apple to become the most valuable company in the world. Valued at over £320 billion it's an absolutely huge company with fingers in a huge number of pies around the world. However, this extraordinary achievement was overshadowed in the UK with Google's ongoing tax avoidance saga.

In a very quick nutshell: Google recently agreed a tax bill of £130million with the UK taxman (HMRC) to cover underpayment for the past decade. No sooner had this been agreed than it was treated as an outrage by many groups. Two major reasons were cited - that it was still an underpayment given the scale of the company's activities in the UK and it was rumoured to be a significantly lower figure than that agreed by Google France with the French taxman.

This past week the head of Google Europe, Middle East and Africa (EMEA) was hauled in front of the UK Parliament's Public Accounts Committee to answer questions question about Google's tax arrangements. Judging from all the press reports it seems it was quite a fierce grilling but didn't actually get anywhere to persuading Google to cough up and pay a bigger bill. There was some bluster and weak attempts to make it look like Google was a nice fluffy company which wasn't trying to avoid paying tax but Google's main argument was more or less "we're paying what we are required to pay by the laws that are in place and we've agreed the figure with HMRC".

The line of defence is pretty robust. However they've gone about it and whatever clever accounting methods and legal practices they've used, they've come to an agreement with the tax collectors/investigators and the company intends to pay that figure. The government can enforce a tax payment - it is not a charity that is raising funds thanks to its donors' better nature. Those who presume to rule in government have set the tax system and it's on them to enforce compliance. If the tax system is complicated enough that sharp accountants can find loopholes and legally avoid paying tax then that is a problem with the tax system not with the company that's trying to reduce its' tax burden.

If the government is unhappy with its tax receipts it can change the tax system - though it will then have to live with the consequent effects on how businesses and people change their behaviour, for example by moving their trading centres to different countries. Changes are starting to happen - there are now moves within the EU to clamp down on the avoidance privileges enjoyed by international companies who have been using the different tax systems in different countries to their benefit. And since the whole EU is being coordinated together on this companies can;t simply hop from one country to another to get around the change. Seems to me like a good move and a far more effective way to ensure companies pay an acceptable* level of tax than lecturing them on how immoral they are for avoiding tax.

* Acceptable to the tax collectors. Whatever level they do pay someone somewhere is going to be unhappy!

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Air Strikes and Politics

Last week saw a flurry of activity, discussion and comment in the run up to the UK government vote on whether we should bomb ISIL in Syria. Once the vote had been announced we saw several days of intense media coverage of the goings on at Parliament and predictions which MP was going to vote which way and what that significance might be for the various party leaders. Outside of the Whitehall circus, everyday folk were talking and forming opinions on which way the vote should go.

In the end, on Wednesday 3rd December, the House of Commons overwhelmingly decided to proceed with an air strikes campaign and the UK rode to war once more.

The situation in and around Syria is ridiculously complex with numerous different groups fighting against each other while sponsored by countries who are working with each other to end the conflict (in theory). Without access to detailed intelligence and awareness of our military capability I just don't know where I stand on the question of should or shouldn't the UK be bombing ISIL. My heart tells me war is never a good thing but my head tells me sometimes war is necessary. Islamically speaking the killing of non-combatants (civilians) is forbidden in war which would make the decision seem easy but it's not quite so simple - bombing an oil field or a road or other piece infrastructure may be a reasonable target that isn't likely to cause any direct death and will degrade the enemy's capability and if you can find . I'm glad I don't have to make the decision.

What I do know though is that Parliament decided that on the back of whatever information they were given the best course for the UK was to begin air strikes. Immediately after the vote there were all kinds of reaction, ranging from celebration to outrage and from sorrow to shock.

I don't think going to war should ever be a cause of celebration and those who would celebrate should read Wilfred Owen's World War One poem Dulce Et Decorum Est (pasted at the bottom of the page in case you don't want to click).

Sorrow is an understandable response - reading the last stanza of the poem will induce sorrow in anyone (and if it doesn't then read it again carefully). The horror of war, especially in its modern form, means the decision to send men to kill and to die should not be taken lightly.

Shock and outrage I can also understand though I think in this case these reactions could be due to a misunderstanding of what the UK government is meant to do. The UK government's (or any other government's) first responsibility is to protect and promote the UK citizens' short and long term interests.
When close allies (in this case France) have been directly attacked and there is a high likelihood the UK is also going to be attacked, that first responsibility means the government has little choice but to join whatever bandwagon has been started to destroy/debilitate the attacker.
Not joining in with the anti-ISIL campaign would leave the UK wilfully damaging its relations with its allies and key trading partners. And if ISIL were then to mount a Paris style attack on the UK the fallout against whoever was in government and "had done nothing" would be the end of that government's credibility with the people and to whom would they look for solidarity when they showed none with their allies when their allies wanted it?

In simple terms - my friend is having a fight with that kid nobody likes - I should help him and join the fight so he stays my friend. It sounds very playground-ish but, except for the obviously far greater stakes when dealing with international geopolitics, I really don't think it's all that far from the truth.


Dulce Et Decorum Est (Wilfred Owen)

Bent double, like old beggars under sacks,
Knock-kneed, coughing like hags, we cursed through sludge,
Till on the haunting flares we turned our backs
And towards our distant rest began to trudge.
Men marched asleep. Many had lost their boots
But limped on, blood-shod. All went lame; all blind;
Drunk with fatigue; deaf even to the hoots
Of tired, outstripped Five-Nines that dropped behind.

Gas! GAS! Quick, boys! – An ecstasy of fumbling,
Fitting the clumsy helmets just in time;
But someone still was yelling out and stumbling,
And flound'ring like a man in fire or lime . . .
Dim, through the misty panes and thick green light,
As under a green sea, I saw him drowning.

In all my dreams, before my helpless sight,
He plunges at me, guttering, choking, drowning.

If in some smothering dreams you too could pace
Behind the wagon that we flung him in,
And watch the white eyes writhing in his face,
His hanging face, like a devil's sick of sin;
If you could hear, at every jolt, the blood
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, incurable sores on innocent tongues, –
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie; Dulce et Decorum est
Pro patria mori.