As the Guardian reports this morning, UK Uncut is planning to target Starbucks on 8 December.
I think Starbucks the ideal target for protest: no one need buy from it and a boycott can be both visual and effective.
But, as I have said before, whilst I will strongly support peaceful protest I never condone violence. As a result I hope all such demonstrations will be peaceful, a hope that extends to the actions of the company and police as well as those taking part.
Starbucks tax policy is irreconcilable with corporate social responsibility. They're not alone but as Barclays were the company to target in the 70s on apartheid so Starbucks are the company to target on tax. Change has to come and his is one way to achieve it.
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Buy me a coffee!
How much tax does Starbucks pay from its sales income in National Insurance, Income Tax, Business Rates, VAT, Insurance Premium Tax etc etc.
Sales are not profits and whilst we have profits tax rates et too high, business owners will domicile themselves elsewhere to avoid it.
You want to collect more tax – cut tax rates.
Utterly spurious argument
There is a tax on profits
It has clearly been avoiding it
Low taxes do not change avoidance behaviour – as is well researched – they eventually compete for subsidies
Your arguments are, respectfully, an excuse for abuse
If I was a locally owned coffee shop producing considerably better and cheaper coffee than Starbucks (not hard) who pays all the taxes you quote in addition to taxes on any profits I would be pretty aggrieved that by playing tricks with offshore companies that Starbucks are able to gain an unfair advantage.
Employees pay NI and Paye and VAT is well known as open to abuse.
So let Starbucks domicile itself elsewhere. I don’t care.
As it is it uses other countries to avoid paying corporation tax.
Then we will just have Costa which does pay. It’s better coffee too.
Every company collects VAT and pays National Insurance for its workers, assuming that it pays them enough for them to pay NI.
It’s not the company that pays income tax, it’s the individual.
There is now an epetition to make Private providers of Public services to be subject to the Freedom Of Information Act. At the moment you cannot find out about companies that own our NHS services and where the money comes from and goes to.
Anything to do with the NHS should be out in the open.
How much tax has Branson avoided or evaded? The same with Circle and Careuk.
As well as the multinationals we also need to spare a thought for all our home grown private equity companies who transfer profits Jersey vehicles through high yield debt and pref shares. And then just remember all those donations to the Tory Party from private equity owners and also remember that Michael Fallon MP, who is now the Business Secretary used just such a structure to invest in Just Learning a private nursery company in which he used to have an interest.
For Starbucks though, it is interesting to note that if you add back all of the interest payable to group companies and all of the royalty payments, they still make heavy losses per their UK accounts. Presumably, the price they are buying coffee for is easy to establish as there’s a ready open market for this and any avoidance on setting the price too high can already be combatted by HMRC correctly applying the existing transfer pricing rules. For Starbucks at least all of its UK sales are recorded in a fully taxable UK enitity (which is not the case for Apple, Facebook, Google etc).
And you’re ignoring transfer pricing on their coffee…
But ask a simple question – if they are really heavy loss makers then why are they opening 300 more stores?
I mention the price of coffee in my last post.
I guess they are opening 300 which they hope to be profitable. They shut 65 loss makers in 2010 alone per their 10-K.
Yes, starbucks is an ideal choice. Those that buy from there are used to paying high prices for puerile coffee, largely because of the name.
As such a minimal annoyance will be visited upon those who are busy working, and maybe those that have time to drink overpriced flavoured dark drinks can reflect upon their waste ?
As for the company and police just standing-by and enjoying the scene: Not A Chance. The police have to be seen to be clamping down on “civil unrest” because their jobs depend upon it. No arrests and G4S may be given “civil unrest policing”
Like you Richard I hope that the protests will be peaceful. I can’t help thinking that David Hughes’ idea (@groovyfokker) of handing in a written protest will have more effect than just boycotting the stores though.
Details are here
I would be there on 8 December (no hardship to boycott, being a non-customer) but that would require me to overcome feelings of hypocrisy as I arrange my own affairs to avoid tax too, being a keen ISA investor.
As we know (from a former LCJ), taxpayers are under no obligation to arrange their affairs to incur a greater liability to tax than they would by arranging their affairs in some other (legally compliant) fashion.
The fault is not in our Starbucks but in our legislation (as Shakespeare might have said) 🙂
You can’t afford tax in an ISA – parliament says no tax is due
Starbucks is organising its affairs to get round the will of parliament, even if legally
They’re utterly different situations.
If the will of parliament is being avoided – how come it has not been rectified by amending legislation – after all this has been going on for some time hasn’t it?
The Rule of Law doesn’t require a taxpayer peeling back layers of an onion to try and discern what is this “will of parliament. Furthermore, as the UK courts have adopted a purposive approach to interpreting tax legislation, if the government (and HMRC) felt that the intention of parliament was being stymied, they could have brought these alleged transgressors before the court.
The spirit of the law or the will of parliament cannot operate beyond the the boundaries of it’s language – plain and simple.
Oh dear, wrong again
Wait for the general anti-avoidance principle
Richelieu, you are obfuscating the position here. An ISA is a specific tax exemption offered by the government to UK residents to encourage saving. It is not tax avoidance because the government want you to do it. Tax avoidance is something the government doesn’t really want you to do, but doesn’t legislate against because it offers its mates a tax advantage. If the little people could do it, or they start doing it, they legislate against it and find a new loophole for their mates. When everyone finds out about the new loophole the process is repeated. Thats why our tax code grows like topsy.
Starbucks are effectively offered a specific exemption from UK CT because the government does not legislate to create a level playing field between UK traders and foreign traders. They value foreign investment more than UK investment and as most small traders are little people too, they have to pay for the governments expenditure.
Hello Richard
You said that you never condone violence and I mostly agree with you…for rhetorical purposes you might want to add “as a Quaker” I do not condone violence… because although many people are ignorant of religion, the Quakers still get instant respect for their work on peace matters. I think it helps you in making your argument as a result.
Just a thought.
Quakers also try not to preach
But it is true, as a Quaker I do not condone violence
The other reason for not condoning violence is that it just will not work in this case. The political argument on fair taxers is being won with the general public and any violence would be used by Starbucks and their ilk to change the argument and attack those who are putting it forward. Just be informative, show a good sense of humour and respect those going about their ordinary business and the case will become even stronger.
The recent accounts for Starbucks show that they were loss making even before the dodgy licence fees and group interest though. Maybe their sky-high London rents are to blame?
Oh come on, 13 out of 14 years losses?
And they’re still here?
Pull the other one
They’re a massive global behemoth who can probably stand to make losses in new markets. The last 5 years can hardly have been the best time to sell their over-priced rubbish either. I’ve looked at their accounts and can’t see that the avoidance really stacks up. They make a decent gross profit and it’s only the admin costs, eg rent that really hurt them. I’m sure there’s an element of probably paying over the odds for their coffee beans, but equally I think there are far worse firms out there when it comes to avoidance.
If you were right they would have shut – and not be planning 300 new stores
Sorry – your excuses for their behaviour just don’t stack
Why would they have shut? It’s not like the US parent can’t afford to fund small (by their standards) losses. Maybe the 300 new stores are in areas where there isn’t much competition and leases aren’t so high. Don’t forget that Starbucks opened lots of new stores when they and other chains were engaged in a high cost expansion war, and Starbucks took out lots of very expensive leases on prime sites in London. If they are transfer pricing their raw materials, it doesn’t appear to be a very high degree, seeing as the UK’s company gross profits are more or less in line with their competitors on a percentage basis.
Could all those who believe Starbucks are struggling in the UK please read their Group Financial statements – just Google Starbucks Investor Relations – the UK is the main part of their overseas business segment. Strangely enough Continental Europeans who know something about decent Coffee haven’t taken to Starbucks.
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