[gregsq]

You don't seem to understand VAT. Consumers pay VAT on goods and services ( some exceptions ). Without further financial activity, these receipts are simply forwarded and paid to HMRC.

For purchases that included a VAT component, ( and that is or should be all orders ), the amount paid to VAT is deducted. If the balance is positive, the entity pays HMRC. If the balance is negative ( for instance, when making a loss on expenditures vs income ), HMRC pays you.

In other words, it's entirely possible that HMRC pays Google. Customers, ( or those not VAT registered ) always pay the tax.

[jsnell]

I understand VAT just fine. Meanwhile you don't seem to be responding to anything that I actually wrote.

The exact specifics of VAT accounting don't matter to the question of whether selling Nexus 4 to the UK from Ireland is sleazy tax optimization or not. I think it clearly isn't, and have argued why not. If you disagree, could you perhaps address that point rather than bicker about the exact VAT semantics?

[gregsq]

I'm not trying to bicker. I'm merely pointing out that VAT is completely irrelevant to tax on profits. It needs to be left out of the conversation as it never forms a liability for a VAT registered entity. It's only connection to ethics as far as I can see is to the question of whether a VAT registered entity should arrange accounts so that a continuing pattern of running a loss account leads to payments from HMRC instead of the other way around. But of course in practice this makes no difference. Some other VAT registered entity will pay it instead.

This is important to clarify. There seems to be an idea here and elsewhere that VAT forms part of a companies liability. It doesn't.

As to arranging a lower tax rate on what are liabilities, then I will agree in the main. Ethics as pertaining to corporations are codified. They are a little subtle, but generally they resolve around the best interests of the company. This doesn't imply, as I'm sure you know, that the only consideration is profit. Shareholders are or should be also interested in larger concepts of value.

The fact is that the tax code in the UK provides for decisions that lead to the, in my view, somewhat hypocritical criticisms from these companies interrogators. It is grandstanding on well established and ordinary mechanisms of accounting. It ignores the history of the British isles in allowing tax havens like Jersey to prosper, and completely discounts the philanthropic activities of some of these companies, in particular Google.

Sorry if you thought I was having a go. It wasn't my intention.