Tuesday 24 January 2012

Unintended Consequences

So, folks, it's time to ask that awkward question again: if tax is such a benefit to society, and if business is not taxed "enough" according to "the left", how do we explain this complaint from the fantastic RaspberryPi project:

I’d like to draw attention to one cost in particular that really created problems for us in Britain. Simply put, if we build the Raspberry Pi in Britain, we have to pay a lot more tax. If a British company imports components, it has to pay tax on those (and most components are not made in the UK). If, however, a completed device is made abroad and imported into the UK – with all of those components soldered onto it – it does not attract any import duty at all. This means that it’s really, really tax inefficient for an electronics company to do its manufacturing in Britain, and it’s one of the reasons that so much of our manufacturing goes overseas. Right now, the way things stand means that a company doing its manufacturing abroad, depriving the UK economy, gets a tax break. It’s an absolutely mad way for the Inland Revenue to be running things, and it’s an issue we’ve taken up with the Department for Business, Innovation and Skills.


So, if this project to bring low-cost computing to the masses, to provide disruptive and innovative technology to the world, to generate a remarkable potential manufacturing opportunity in Britain, creating jobs, bringing money in to the country from around the world, and yet the stupidity of the tax code is denying all this from happening.

Why does this happen if tax is such a boon to society?

5 comments:

ReefKnot said...

Knowing the perverse way these things are sometimes resolved in UK, I wouldn't be surprised to find the authorities simply levy import duty on these items thus eliminating the tax anomaly.

fatman said...

Under Mandelwotsit the Department for Business, Innovation and Skills went bust.

Anonymous said...

High tax in Sweden, doesnt seem to be damaging them too much!

JuliaM said...

" It’s an absolutely mad way for the Inland Revenue to be running things..."

I'm not sure I'd put much faith in a company that doesn't seem to have realised that the 'Inland Revenue' hasn't existed since the Reign Of Gordon The Mad...

ChrisM said...

"Anonymous said...
High tax in Sweden, doesnt seem to be damaging them too much!"

Way to miss the point. It is not just the level of taxation that is important, but how the tax is distributed. Sweden has very low corporation tax for example as this is very damaging, but high income tax is this is less damaging.