Starbucks boycott gaining momentum!

[I1L2T3]

So the pitchforks have come out and Starbucks have been pressured into giving the taxman millions of pounds they are legally not required to pay.

 

How many of us on here are willing to write a cheque to the taxman above what we are legally required to pay.

 

It just highlights that the tax system is not working properly where large corporations are concerned.

 

Smaller companies should be able to plan their taxes to factor in genuine depreciation etc... It's quite possible that they might post a loss because of this and avoid some corporation tax. Nothing wrong with that. The accounts are often simple, everything is onshore, easy to scrutinise by HMRC for evidence of aggressive avoidance. In many cases that kind of legitimate planning is the key to stability and survival for small and medium companies.

 

Then we move on to large corporations that are very clearly making very large profits but avoiding most if not all of their corporation tax, and in some cases even requesting rebates from HMRC. These companies often use a complex web of offshore subsidaries and companies to shift profits around the world to avoid paying taxes. All backed up by an army of tax planners and accountants that smaller companies could never afford. What they do is not always illegal but it stretches the law to the max. The laws need to be tightened up. Simple as that.

[DYKWIA]

How many of us are pursuing aggressive avoidance schemes?

 

But totally within the rules. Have Starbucks broken any Uk tax lawsand if what I'm reading is true, it's not exactly 'aggressive' is it. Seems a pretty straightforwrad method to reduce their tax bill.

 

To quote Will Smith in Bad Boys, "Don't hate the player, hate the game"

 

How many of us would jump at the chance to pay less tax each year.

[I1L2T3]

But totally within the rules. Have Starbucks broken any Uk tax lawsand if what I'm reading is true, it's not exactly 'aggressive' is it. Seems a pretty straightforwrad method to reduce their tax bill.

 

To quote Will Smith in Bad Boys, "Don't hate the player, hate the game"

 

How many of us would jump at the chance to pay less tax each year.

 

The thing about the law is a convenient shield to hide behind. Hiding behind it doesn't take away the fact that when these stories reach the news the companies involved can be badly damaged. They have to consider the extent to which they can stretch the law to their advantage, against the reputational damage that could result if they push too far. Many larger companies recognise they have to pay some CT, even if technically they know they could avoid it completely.

[mikem8634]

So the pitchforks have come out and Starbucks have been pressured into giving the taxman millions of pounds they are legally not required to pay.

 

How many of us on here are willing to write a cheque to the taxman above what we are legally required to pay.

 

Costa seem to manage it quite happily.

 

But totally within the rules. Have Starbucks broken any Uk tax lawsand if what I'm reading is true, it's not exactly 'aggressive' is it. Seems a pretty straightforwrad method to reduce their tax bill.

 

To quote Will Smith in Bad Boys, "Don't hate the player, hate the game"

 

How many of us would jump at the chance to pay less tax each year.

 

Starbucks have been challenged and shamed for behaving immorally, not illegally. No, they have not broken the law but they have proven that they have a moral framework that some UK consumers choose not to support.

 

To continue your Bad Boys analogy - the game allows for a range of behaviours from the immoral to the moral. Costa chooses the moral, Starbucks the immoral.

 

The game needs to change and so do some of the players.

 

I, for one, am comfortable with the level of taxes I pay. I would not jump at the chance to pay less as I would assume that the impact upon essential services and the vulnerable elements of society would be considerable and negative.

[Cyclone]

But totally within the rules. Have Starbucks broken any Uk tax lawsand if what I'm reading is true, it's not exactly 'aggressive' is it. Seems a pretty straightforwrad method to reduce their tax bill.

 

To quote Will Smith in Bad Boys, "Don't hate the player, hate the game"

 

How many of us would jump at the chance to pay less tax each year.

 

If it wasn't legal there wouldn't be an issue, they'd simply be prosecuted and fined in addition to being forced to pay.

 

It is aggressive though, it requires a deliberate and thought out scheme to reduce their UK tax bill to nothing. Within the letter of the law but clearly not the spirit.

[DYKWIA]

It just highlights that the tax system is not working properly where large corporations are concerned.

 

Smaller companies should be able to plan their taxes to factor in genuine depreciation etc... It's quite possible that they might post a loss because of this and avoid some corporation tax. Nothing wrong with that. The accounts are often simple, everything is onshore, easy to scrutinise by HMRC for evidence of aggressive avoidance. In many cases that kind of legitimate planning is the key to stability and survival for small and medium companies.

 

Then we move on to large corporations that are very clearly making very large profits but avoiding most if not all of their corporation tax, and in some cases even requesting rebates from HMRC. These companies often use a complex web of offshore subsidaries and companies to shift profits around the world to avoid paying taxes. All backed up by an army of tax planners and accountants that smaller companies could never afford. What they do is not always illegal but it stretches the law to the max. The laws need to be tightened up. Simple as that.

 

Totally agree but I'm thinking that easier said than done.

[dvp82]

It could be applied only to international businesses (by law), or to only businesses over a certain size...

 

Oh you mean you want HMRC to cherry pick how a business is taxed.

 

Take BA a few years ago and in the days before they got into bed with Iberia and formed IAG. They had a rough trading period and at one point made losses of around £400 but still generated revenue of £1billion+

 

So after making a loss in the hundreds of millions, does it seem fair that HMRC would still come knocking wanting a payment of £20+ million.

[maxmaximus]

Costa seem to manage it quite happily.

 

 

 

According to this In 2010-11, Costa paid around £15m in UK tax yet as twice as many shops in the UK as Starbucks.

 

Costa Coffee a UK-based international group so will be underpaying corporation tax in other countries and paying roughly the right amount in the UK.

 

Starbucks, a US-based international group, will be underpaying corporation tax in other countries (including the UK) and paying roughly the right amount in the USA. So how much tax did Starbucks pay in the USA?

[mikem8634]

According to this In 2010-11, Costa paid around £15m in UK tax yet as twice as many shops in the UK as Starbucks.

 

Costa Coffee a UK-based international group so will be underpaying corporation tax in other countries and paying roughly the right amount in the UK.

 

Starbucks, a US-based international group, will be underpaying corporation tax in other countries (including the UK) and paying roughly the right amount in the USA. So how much tax did Starbucks pay in the USA?

 

Corporation tax is not a tax on the number of outlets so I'm not sure how that is relevant.

 

So, Costa being, as you say, an international group, they could have chosen to create and employ a tax structure as morally bankrupt as that of Starbucks but didn't.

 

I have no idea of Costa's tax arrangements in other countries. How do you know if they are underpaying in other countries? Wouldn't that depend on the relative rates of corporation tax in all the corresponding territories? Do you know if they have any territorially specific tax agreements such as the one Starbucks is shamefacedly arranging now in the UK? Do you have any evidence for any of this?

 

So how much tax did Starbucks pay in the USA? I don't know. What I do know is this

 

in the 14 years since arriving in the UK, the chain has paid just £8.6m in corporation tax.

 

 

- from the article you linked.

[andygardener]

Totally agree but I'm thinking that easier said than done.

 

A fairly easy way to crack down on a lot of it would be to insist cross border transactions been companies in the same group at done at cost.