Tesco issued a profits warning the other day, so they are in their terms doing badly. That was not the point though. What I said was if they paid more in tax they would have less for wages, which would be clearly the case irrespective of whether you feel that should pay a larger percentage of their income as wages or not. Linking to what has been said on another thread about poor investment in industries in the past, part of the reason for that was as those industries suffered competition too big a portion of their reducing revenues was going in wages, making them increasingly uncompetitive and investment pointless.

So these companies are paying wages out of profits? The staffing costs don't get factored into the price of the goods/services to be covered by turnover?

And you think this "business" thing is a good example of how to run the country?

God help us all!

Yes, that's the point I was trying to make. It's not the individuals taking out loans they couldn't afford that was the [iprimary[/i cause of the crisis, but the banks gambling with this sub-prime debt to try and make a quick few million here and there.

Any company that pays wages out of profits wants its collective head looking at.

On the basis of your comment, if Tesco make a loss, they will automatically have to pay every employee less.

And you've confused revenue and profit in the full original post I quoted.

So the dividend paid to their shareholders would be slightly smaller. I'd say this was a worthwhile sacrifice to ensure that the companies are paying what they ought to be paying in tax, and that their employees are able to live without having to seek help from the state.

A profits warning means they got their forecasts wrong, if they are doing badly I'd like to be a quid or two behind them.



And clearly they wouldn't, the could use a little of their profit to cover this.




Tesco is hardly suffering from under-investment.

They pay wages out of income. Income is constrained by what their competitors charge. If supermarkets sold just one prduct, say milk, and Tesco charged £1.50 for a pint and Asda £0.45 how long do think Tesco would last? If it were simply a case of factoring costs into prices then virtually no business / no industry would ever have gone bust!

He didn't suggest that.

He suggested that they pay their tax bill.

Just like you or I have to do.

Have you edited my post!? I wrote (or intended to!) "...in their terms."

They are suffering from under-investment - or at least they feel they are - as they are talking of spending hunddred's of millions revamping their shabby stores.

They clearly have paid their tax "bill" otherwise HMRC would be taking recovery proceedings.

LOL, you clearly don't understand that supermarkets have a refurb scheduled and any announcement to deflect a less than stellar performance is most welcome. Tesco spend millions on their stores every year, clearly not an under-investment

Yes, of course they must.
I mean David Hartnett has never let a company off has he?

Or Tesco has taken the defence of, we've got more lawyers than you.
Hardly justice.

That's not paying the bill (sic)! It means either the money was not due, it was unclear in law that it was due and so HMRC took a "commercial" decision or HMRC were incoompetent. Or, are you saying openly on this [upublic[/u forum that Tesco deliberately evaded part of it's tax liability?

Wages should be paid from income, which is based on sales. The price of the sales is generally set by including fixed and variable costs in the calculation. When the product is sold, the costs of staff, buildings, rent, rates, utilities should be covered.

Any company that covers rent etc, but not staff in their pricing will clearly need a sale just to pay the people who produce/sell the product in the first place. In your example, Tesco would never be able to pay their staff, as they wouldn't be able to sell any products, let alone make a profit.

Profits can be used as a basis for recruiting more staff, but as I've said, anyone relying on profits to pay staff at the outset is not going to be in business for long.

What on Earth are you waffling on about? It is quite clear that pricing cannot just be an arbitrary mark up on costs, it needs to take account of the market place. That's one of the main reasons why efficient businesses survive and less eficient ones go under.

I am saying that your logic is seriously flawed.
You say that HMRC would be chasing Tesco if they hadn't paid their "bill", therefore they must have paid.
I say not necessarily ... as we have seen a case recently where billions that were due by Vodafone (and had been found to due by the court and were upheld to be due by a higher court ... how much clearer in law do you want it?) were nonetheless written off on the say-so of one man, without reference to tax experts within HMRC or to HMRC's own auditors.

I'm "waffling" about you recommending that companies pay staff out of profits, which is lunacy of the highest order, even for you. For the 4th time, staff costs should be covered by turnover, not profits. Do you think Tesco don't factor the costs of having people work for them into the price they sell things for?

How does a not-for-profit organisation operate in Dallyworld? Presumably on the goodwill of staff who realise that they'll never be paid.

What your Ladybird book of Successful Business Management probably doesn't mention is the fact that a very large number of people on minimum wage, working for supermarkets (which together are the second largest employer after the NHS) are dependent on tax credits (which is paid for by taxpayers, and most of which comes from individuals not from companies).
The likes of Tesco are paying a large proportion of their workforce less than a living wage and "we" are subsidising their profits.

Then the bstrds don't do the decent thing by paying their whack.

So please don't try to make out that they are saving on tax in order to pay their employees, because that's total bollox.

I have never said wages are paid "out of profits" indeed I explicity said the opposite.

As to your points:

1. The Labour party distorting the workings of the free market.

2. Have you evidence they don't pay their true tax liability?

3. I never said any such thing.

You said "If the companies were taxed more heavily that would mean they had less avaiable to pay wages."

In the context of Vodafone and Tesco the tax that they've been "let off" was on profits. They would clearly not be paying the wages from profits, so how would they suddenly have less money for wages if taxed on profits?

Both wages and tax (and dividends) need to be paid by CASH though.

And?

Not if you're Vodafone, then you can get it on several years interest free credit. Or don't you read the papers?