Wednesday, 31 August 2016

Apple tax

Isn't "apple tax" the duty they charge on cider?

OK, there is much in the news on Apple and the tax they are due to pay in Ireland, or not. They are appealing. The letter from Apple was interesting.

So not really debating that issue itself much, but more of a general issue I see on companies finding legal means (or are they made illegal retrospectively?) to reduce the tax they pay. As a business, one of the things that bugs me a lot is when people talk of companies paying no tax when in fact they are referring to paying no (or little) corporation tax (in a specific country in which they trade).

The reason that annoys me is that I know, as a business owner, that we pay lots of tax in lots of ways, and corporation tax is just one of those, not even the biggest. My company does a lot of R&D and as a result we manage to reduce our corporation tax quite a bit. Whilst we had spotted this, it really only happened when Alex managed to engage some consultants that are good at this (MPA group). I hope we don't get the same grief from people saying we are not paying our fair share of tax as a result.

At the end of the day companies do pay a lot of other taxes apart from corporation tax, and one of those is VAT. This is where a heated debate arose with my friends on who pays the VAT!

My view on this is pretty clear, and a result mainly of my failed economics module that I did at uni. There are a lot of taxes that relate to what a business does. You cannot argue that Apple, in what they do, have not caused a lot of VAT to be paid. The VAT actually gets paid mostly where the companies trade and sell their goods. The fact companies can effectively divert their corporation tax to other countries, that may charge less, is one of the big gripes people have - tax not paid where the company is making its money, but VAT is where the company makes its money.

Now, the issue I had with my argument is that "VAT is paid by the customer and not the company", as it is added to the price and the company is simply collecting it and handing it over. I do not entirely agree!

Who "pays" a tax?

The issue I have is down to who "pays" a tax. This is not as easy as it sounds!

One simple way to work out who pays a tax is to work out who is better off if the tax did not exist. That shows who exactly has been burdened by the tax, and so who really "pays" that tax in the end.

Now, with VAT, you could say that if VAT did not exist, your iPhones would sell at the ex-VAT price. Apple would be no better off, but the end customers would be. So the end customers are the ones that pay the VAT.

But equally you could say that the market can bear a price for an iPhone, and if no VAT existed then Apple could charge the same final price. The end users would be no better off, but Apple would be. So clearly the tax is a burden on Apple - they pay the VAT.

The problem is that this is hypothetical, unless VAT was abolished and we waited a while, we would never know the final outcome. In practice, it is reasonable to expect that a market price would be found that was somewhere in between, so the VAT ultimately has been paid by final customer and by Apple in some part. The exact ratio is not something we can really know.

What you can say for sure is that Apple are responsible for all of that VAT getting paid. It is, after all, a "Value Added" tax, a tax on the "value add" that Apple have created, and is money going to a government because of Apple and what they do.

Is VAT special?

The other point is that VAT is seen as special because of the way it is accounted, as a separate thing "collected" from the end user and handed to the government. This makes people dismiss it as a tax not paid by the company by by the consumer - not as clear cut as I explain above.

But my argument here is that VAT is not special. All of the above points, where one could expect the price to drop by the tax no longer in play, or one could expect the price to be the same and Apple pocket the amount they would have paid in tax. All of that applies to any tax, whether corporation tax, council tax, stamp duty, fuel tax, employers national insurance, or so on.

However it is accounted for - at an economics level - a tax is diverting money from the profit that could be made and sending it to a government. Without that competition may mean a lower price, or same price and more profit for the company, or more likely somewhere in-between. So both pay in some part for that tax, whatever that tax is.

VAT is not special!

Apple have created a lot of tax at various levels in different countries, not just the corporation tax they may have paid in one country, but all of the employment and property taxes in the country they employ people and the VAT in the countries they sell things. This should not be dismissed.

Tax burdens us all, consumers and businesses. Businesses actually have a legal obligation to act in the best interests of their members, and so try and pay as little as they (legally) can. End users usually have the same incentive.

It will be interesting to see how the Apple case pans out in the long run though.

Tuesday, 30 August 2016

Net neutrality and IPv6

We have new net neutrality laws that impact the way ISPs provide service. These are EU regulations.

First off a quick point about net neutrality. The basic idea is that an Internet provider (ISP) should treat different types of traffic and destinations without discrimination. This may seem obvious. It is to us as at A&A, but it is to help ensure we do not go down a slippery slope where you need to be with a particular ISP to get access to certain services or TV channels or web sites, etc. The ISP should provide access to everything in the same way. It may seem far fetched but this has already happened in the US where certain streaming services were heavily restricted via certain ISPs. So in principle net neutrality is a good thing for consumers. The devil is in the details.

Now, one of the things I thought this would help is the deployment of IPv6.

So, again a bit of a summary. Internet Protocol (IP) is how computers communicate on the Internet. The current version, which is version 6, (IPv6) has been around for a couple of decades now, and has started to be used more and more. It is used by big players like FaceBook and Google. But some ISPs are slow to provide access to the current version, IPv6, only offering the older version IPv4. The old version will be with us for a long time still, so you need both. Fortunately it is pretty much all "behind the scenes" for most people, but you do need an ISP that handles IPv6 to make proper use of IPv6.

One of the things that is outlawed by these new regulations is offering an Internet Access Service which does not provide access to the whole Internet. This is good in principle. There is an exception for legally mandated blocks, but not optional ones that the ISP simply chooses to impose.

So, if an ISP decided not to allow access to a specific chunk of the Internet, say China, or a specific type of protocol, say Voice over IP (VoIP), then they would be in breach of these new regulations.

My immediate thoughts when I heard of net neutrality some years ago was that it finally means all ISPs have to offer IPv6. It is not fundamentally difficult to do - and for some it is a long process, but IPv6 has been around a long time now. AAISP have offered it to customers since 2002. We hear BT will roll it out by end of this year.

After all, choosing to exclude a whole chunk of the Internet (all of the IPv6 addresses) would not be treating everyone equally.

Indeed, informal discussions with my lawyer friends would seem to suggest that if an ISP chose not to allow access to a block of the IPv4 address space (e.g. China), then they would be in breach. He even thinks that if an ISP offers IPv6 as well, but chose not to route to a part of that IP address space, they would be in breach too.

However, the guidance notes, not specifically the regulations, says, rather bizarrely, that an ISP offering IPv4 only and not IPv6 would not be considered in breach of the regulations.

To me that is batshit insane. In the example above, an ISP offering IPv6 but blocking all the IPv6 in China, would be in breach. So they could become compliant by blocking more, by blocking all the IPv6 everywhere else as well. That shows how nonsensical the guidance is.

Why on earth have EU regulators pulled their punches here and not simply said that failing to route the CURRENT Internet Protocol version is simply failing to provide an Internet Access Service?

At the end of the day, it is OFCOM that enforces this, and they should consider the guidelines. Maybe OFCOM will have to guts to say no, IPv6 is needed to be an Internet Access Service.

Saturday, 27 August 2016

Man cave: Day 366 - finally done

Exactly a year ago I posted that my garage conversion was finally starting.

Today I finally received the completion notice from the council.

The huge delay was caused by the fact that the project as a whole, for which I contracted BW Reed & Son Ltd, did not, as a whole, meet building regulations.

There were several issue which meant that the builder had to do a lot of work to prove the unconventional way he did the insulation did meet some of the regulations, and that took time.

But the final issue was ventilation - fresh air. To fix meant either a big fan, or windows that opened. The fact I have an outside door, which I can always open to get fresh air, and in internal door leading to a utility room with windows that open, and hence I could leave open to get fresh air, apparently do not count!

The solution I went for in the end was windows that can open. I am unlikely to actually open them, as I have air-con, and it would, most of the year, defeat the point. But they can be opened, and that means we do now have the final building inspection sign off.


Next step would be to work out who to blame?
  • The builders, BW Reed & Son Ltd, were engaged to do the garage conversion, and in that to meet building regulations. They arranged (and I paid for separately) a number of contractors to do things like electrical work, windows, flooring, decorating, etc.
  • The electrician put in power sockets, network sockets, and so on. The builder thinks it is his fault as he should have quoted for and insisted on a suitable fan.
  • The glazier is aware of some building regulations (such as secondary exit from bedrooms), and the council say that a glazier should be aware of regulations as they have to comply when simply changing windows. The glazier was not aware of the fresh air requirement.
I've asked the glazier if he thinks he should have know building regulations. I may ask some other glaziers. Changing the window cost £585, actually the same as the original window installation. So this is a straight extra cost for the mistake that somebody made. I may even try asking the CAB.

Wednesday, 24 August 2016

How many times do we have to explain it?

Now the French and Germans are at it - wanting to ban true end to end encryption. See article.

It is not complicated - such things can never work as intended and can only harm normal people.

Please spend 4 minutes listening to me try, once again, to explain it - and tell people.

Drones and police

Interesting story today from a friend...

He too has a new Phantom 4, and was practicing flying in the fields that back on to his house a few weeks ago before he went on holiday.

He was not videoing, and whilst it has a camera he was only using to control and monitor the aircraft, so the CAP722 3.7 exception means it is not a surveillance aircraft at that point. Well, we think so anyway. He was being careful, not flying over people or houses. Indeed, much of the field is not even within 150m of a congested area so surveillance aircraft would be allowed anyway.

He just got back from holiday to find a card from the police asking to talk to him. He was worried it was about the drone, and indeed, after about 4 hours of chasing them, the right person finally managed to talk to him and explain that it was.

Well, sort of.

Someone had complained to the police that a drone nearly flew in to their conservatory. It was not even my friend's drone, but someone else's in the road. They found the kid with the drone and he said my friend had one too, so they went to speak to him as well (and he was on holiday).

They told him (and the kid) to just be considerate. They explained that they get a lot of complaints about drones and there is nothing they can do about it. They even confirmed that if the kid had flown in to the conservatory and broken it, that would be a simple civil matter (no intention of causing damage) and would not even involve the police.

This is good in some ways, not so good in others, and raises some interesting questions...

1. Why did they not simply tell the complainer that "there is nothing they can do about it" rather than wasting time tracking down two other people and talking to them? I am sure they would have managed to say that had it been a ballon or a paper plane.

2. Why did they not actually know that some of the drone flying is illegal, e.g. surveillance over or within 150m of a congested area without CAA approval? They told my friend he was fine to fly his drone if he is considerate. It is even in an ATZ, though for sub 7kg drones that is not a factor.

3. Why are people so hyped up over drones - why not talk to each other if something is causing annoyance in some way instead of wasting police time?

Anyway, good news that they were not being arses about it - that is perhaps the important message here. My friend has now been briefed on all of the relevant rules to make sure he is flying legally anyway. Rumour is that next year the rules should be simplified, and for low altitudes be much more relaxed - I do hope so.

Sunday, 21 August 2016

Help to Buy ISA

The scandal is reported in The Telegraph.

Now, I can understand why the government don't pay the bonus until completion - else people could cash the ISA and get the bonus as part of buying and then back out and keep the bonus. Makes sense!

What makes no sense to me is why, even with that caveat, that cannot work. The whole process of buying a house means various fees, and a deposit, and then a mortgage that gets actually paid on completion. I can understand the deposit being handed over on exchange, else you could find people don't have it on completion. But why can one not "hand over the ISA" at exchange too. Some legally binding commitment that on completion the ISA is cashed and used as a whole, with the bonus, at completion. After all the mortgage itself is like that, not actually paid until completion but all part of a legally binding process set up at exchange.

I am shocked it is not simply a signature on a suitable contact at exchange that gives the solicitor the ability to cash the ISA with the bonus at completion to make up with the mortgage the purchase price.

This cannot be beyond the wit of the legal profession, surely?

360 degree images

I wondered how you make one, and I googled, and the advice was to use the Google Streetview App.

So I had a go - here is the video


This is what the image looks like flat!

And this is what it looks like on Facebook


P.S. Yes, that video, I know. I should have pointed it so I was in the middle, and should not have had auto focus, especially when the microphone was sat on the camera and pics up the focus motor noise. It was done badly and I was buggered if I was going to do all that again. I hope it conveys the message though...