Forum Topic

Christmas Tree sales by Sainsbury's

Am I being unfair to imagine that their insistence on cash only is associated with tax evasion?

Davey Harris ● 2d13 Comments

Should explain that suppliers are having to work harder also and pay extra staff etc., so it's not greed, they have to cover costs, but it's the retailer trying to keep customers happy that usually lose out trying to keep prices at a minimum.

Janice Evans ● 15h

Smaller businesses have to try to keep their regular customers, Christmas and seasonal times they have to buy extra usually at an inflated price, as suppliers prices go up at those times which makes profit margin very tight,it's a lot of extra work but they know their customers will expect thoseitems to be there, quite often some items run at a loss, it's very difficultfor small business and why they are closing at a faster rate than ever before.  They have had to stop stocking large items as people unable to park nearby and purchase them, not everyone want to pay delivery charges.

Janice Evans ● 16h

To your points, Jeremy, there are several things at play.Let's assume there is no whiff of money laundering. I also wouldn't call it evasion rather strategy and there are many legal strategies available to any type of business.Rents will continue to be influenced by the influx of larger and global chains. These businesses can afford to offset an underperforming site - perhaps in Chiswick. This isn't possible for independents who are paying inflated rents in the area thanks to places like Chipotle, Ole & Steen, The White Company, etc. This benefits estate agents and landlords but the independents are left lifting the burden in a way chains are not.As mentioned, you also have the economies of scale that simply aren't available to smaller businesses. Which gets us to public perception. People often groan about the price of a coffee. And the mistake is far too often made that a free coffee at Sainsburys (it was a thing at one point) is akin to a far better quality bean/roast from a local cafe. One serves from a machine. The other a human. Do the math.Years ago, when the plastic bag issue was the topic of the day, I had an argument with a frequent customer who I knew to be smart and considerate. Sainsbury's charged for bags so I mentioned I guess now so should we. He had a conniption saying that I couldn't because I was the independent. So I continued with how for them, bags are a revenue stream seeing Sainsbury's are buying enormous quantities and still charging but I'm paying more per unit and being told by a loyal customer that I can't offset that by charging the same amount per bag. That sort of thinking is insurmountable but pervasive still.

David Lesniak ● 19h

Jeremy, doesn’t what you say in your first sentence completely contradict what you say in the last sentence of the first paragraph?That was one of my immediate thoughts on reading what you wrote!

Andrew Jones ● 1d

None of us are competent to comment on the legality of the tax affairs of businesses large or small. We are entitled to a view on the morality of the way they conduct their affairs. If you believe a sole trader underdeclaring cash receipts is worse that a chain retailer employing a complex corporate struture involving offshore tax havens that is your right. However, often what these large companies do is only legal because their highly paid lawyers know they can usually fend off any challenge from the less able legal representation of HMRC. We've lost two valued independent businesses this week alone. They will probably be replaced by a large chain or shops with an opaque business model which has the whiff of money laundering.

Jeremy Parkinson ● 1d

"Smaller businesses have an in built inherent disadvantage when competing with larger ones"No truer words, Andrew. This inequity comes in many ways. From the silliness of not charging Dominos for the use of multiple bays of parking to park their bikes to economies of scale to increased taxation for entities that can't afford to finagle.

David Lesniak ● 1d

Does it really matter? He’s spreading joy and earning a few bucks

Georgina Flint ● 2d

Well it was just a question. The VAT threshold is (from memory) around £70k a year, so I guess that's quite a few trees, maybe it's all legit

Davey Harris ● 2d

Presumably ( and I don't know from personal experience so I could be wrong) it takes expertise to minimise the tax paid to the absolute legal minimum? Such expertise costs, and if you are a large company the percentage these costs are of your overall tax bill is quite small? For a small business, the cost of advice to optimise the tax paid starts to be quite significant compared to the tax paid?So, while I accept what was said by Lord Tomlin, it's not really a level playing field, is it? Smaller businesses have an in built inherent disadvantage when competing with larger ones

Andrew Jones ● 2d

In the landmark case of Inland Revenue Commissioners v. The Duke of Westminster [1936] Lord Tomlin (The Judge) famously stated: “Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be.” While the Westminster doctrine distinguished legitimate tax planning from illegal evasion, its application has been limited by subsequent legal developments, including the Ramsay principle (WT Ramsay Ltd v IRC [1982]) and the General Anti-Abuse Rule (GAAR) (2013). Modern approaches allow courts to consider the purpose of tax legislation and scrutinize artificial transactions primarily aimed at tax avoidance. The GAAR specifically addresses "abusive" tax arrangements. Despite these measures, the core principle of structuring affairs tax-efficiently within legal boundaries remains valid.

Sam Hearn ● 2d

Thank you, Felicity, for the voice of reason and knowledge.I'm forever astonished at how ignorant people are to the challenges and costs SMEs face.

David Lesniak ● 2d

Yes. There is every reason why an ad hoc seasonal business might not want to set up card payment facilities. The portable terminals can be very expensive and they would need more than one.If you want to be the grinch about how much businesses on the High Road pay in tax you might want to focus on the complex corporate structures that private equity owned companies like Boots used to keep their bill to an absolute minimum.

Felicity Caborn ● 2d

The suppliers are usually the ones to make a phofit on seasonal items.

Janice Evans ● 2d