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PostPosted: Wed Feb 11, 2015 03:20 
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Speed camera firm pays peanuts in tax
Paid just £12,000 in tax - despite £35 million turnover

By Emma Woollacott, Feb 10, 2015 Updated: February 10, 2015 8:08 AM

facebooktwittergoogle+pinterestemail - B3FC68 gatso speed camera showing flash. Image shot 08/2008. Exact date unknown.
Alamy

British drivers are never happy to have to fork out for a speeding ticket. But it seems that the company supplying the traffic cameras doesn't much like contributing to the country's coffers either.

Accounts filed with Companies House show that RedSpeed International has paid just £12,000 in taxes since 2006, despite pulling in £35 million in turnover.

The figures were obtained by the Daily Mail, which says that the company has earned a staggering £35 million since 2006. It supplies digital traffic cameras aimed at catching drivers who speed or run red lights.

Based in Kidderminster, Worcestershire, RedSpeed recently won the contract to supply and maintain 600 speed and red light safety cameras for Transport for London (TfL).

Since 2006, says the Mail, RedSpeed International has turned over more than £73 million, including £35 million in the UK, but has paid less than £12,000 in taxes here.

In 2013, it turned over £9.3 million, with more than £3.3 million coming from the UK. Despite the fact that pre-tax profit was £1.09 million, it paid no UK corporation tax - although it did pay nearly £19,000 in foreign corporation tax.

Nor did it pay any UK corporation tax in 2012.

The row comes as Labour hints that it plans to increase corporation tax from 21% to as much as 26% - the Conservatives plan to cut it to 20% in April.

But some might say the level's comparatively unimportant when so many large corporations manage to avoid or minimise their tax.

Last month, for example, an investigaation by the Sunday Mirror revealed that Apple, Facebook, Amazon, Google, Ebay and Starbucks made £14 billion between them last year in the UK - but paid just 0.3% of that in tax.

Richard Murphy, of Tax Research UK, has calculated that the total amount of tax that should be paid in the UK but isn't is now a staggering £122 billion a year.

"The tax gap matters because at £122 billion a year the tax gap is only a little less than the annual budget for the NHS. It is also big enough to cover the entire UK education budget with more than £20 billion left over," he writes.

"That should make this issue one of the highest priorities on any politician's agenda. The troubling fact is that this does not appear to be the case at present."
It seems very strange that large companies manage to avoid paying large tax bills when the Country is meant to be so short of funds? The fact that these Companies in particular are with-holding it for whatever reason is just leaving a very bitter taste!
Perhaps they feel they think they are above such matters?

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PostPosted: Wed Feb 11, 2015 09:14 
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I don't understand this article. A company with a foreign parent adjusts its finances to make its profits in the jurisdiction with the lowest corporation tax rates? This is normal (and legal) business practice.

The UK has reduced its corporation tax rates to 21% (to be 20% next year) in order to attract foreign companies to put their parent companies here. These businesses will "import" profits to the UK to minimise their tax bill. This is legitimate competition between governments to further their economic plans.

Moral outrage is misplaced here. It's up to governments to change the rules if they don't like it.

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The views expressed in this post are personal opinions and do not represent the views of Safespeed.


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PostPosted: Wed Feb 11, 2015 12:44 
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Company tax payable is based on profits though, not income or turnover, is it not? A company could have a huge income/turnover, and still make a loss and eventually go out of business. Now there's a thought.... :twisted:

Best wishes all,
Dave.


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PostPosted: Wed Feb 11, 2015 14:40 
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A company like Redspeed is highly likely to be claiming R&D tax credits for developing novel technology. If you have many engineers etc. then the reliefs can pretty much wipe out your corporation tax bill. I should think the writers of this article would not have researched this possibility to any extent.

The Government introduced these reliefs to promote R&D in the UK. This non-payment of tax is not only legal but is seen as a benefit to the economy. Should companies refuse to claim it out of moral compassion?

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PostPosted: Wed Feb 11, 2015 23:21 
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Be nice to get an expert opinion from one of our resident Accountants on this.

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Drivers are like donkeys -they respond best to a carrot, not a stick .Road safety experts are like Asses - best kept covered up ,or sat on


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PostPosted: Mon Feb 16, 2015 03:39 
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malcolmw wrote:
I don't understand this article. A company with a foreign parent adjusts its finances to make its profits in the jurisdiction with the lowest corporation tax rates? This is normal (and legal) business practice.

The UK has reduced its corporation tax rates to 21% (to be 20% next year) in order to attract foreign companies to put their parent companies here. These businesses will "import" profits to the UK to minimise their tax bill. This is legitimate competition between governments to further their economic plans.

Moral outrage is misplaced here. It's up to governments to change the rules if they don't like it.
Thanks chaps that's most interesting. It's not an area that I am familiar with so that explains it. Thanks :)

I totally appreciate the R&D to help offset the profits into (even) losses ... But aren't the Industry Scam Companies for the most part, buying in cameras? So where might their R&D be?

The courses might involve a small amount of r&d. And perhaps there is some too for camera traffic management scams, (congestion and pollution 'reason' (excuse)) to verify placement effectiveness.
These Companies all, surely ought to all be answerable to FOI requests as they are in essence acting 'for the Gov', to apply governance, similar to how a Council might?
Even if these Companies and businesses all became non for profit this would still leave the flood gates open for them to all gain (substantially) from the existence of the flawed automated enforcement policy. So it's still a bad scheme and still all wrong.
If the 'profits' all went on very well-trained Trafpol it would still be questionable.
[We need to see scams totally removed and proper and intelligent road safety policies restored. Making drivers and riders responsible for their actions with proportional enforcement and sound scientific engineering solutions to roadways will see a fall in KSI figures.]

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