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... ask MNers to boycott Starbucks?

(806 Posts)
legoballoon Tue 16-Oct-12 22:44:10

Personally, I won't be spending any money there again.

When I read the 'we pay our fair share of tax' statement, I almost choked on my (home made) hot chocolate. It's one law for the rich, another for us now is it?!

I think we should support small, UK-based independent coffee shops. Let's support businesses that generate wealth that is shared by local people.

YANBU. I'm in

legoballoon Tue 16-Oct-12 22:45:36

Go Mumsnet!

<Clutches thermos of tea> Really I have one, it's very posh. See here.

MissPricklePants Tue 16-Oct-12 22:46:45

YANBU I will add them to my boycott list!

WorraLiberty England Tue 16-Oct-12 22:47:45

Am I weird? (rhetorical question so no pushing and shoving at the back!)

I live in a london borough and yet I've never been inside a Starbucks or a Costa in my life blush

BestestBrownies Tue 16-Oct-12 22:47:47

I already do (boycott that is) as I hate everything the company stands for and they only ever serve lukewarm, ridiculously overpriced drinks. In fact, I don't tend to waste my money on crap coffee when out full-stop.

BestestBrownies Tue 16-Oct-12 22:49:15

oooh, very posh MrsT grin

larks35 Tue 16-Oct-12 22:49:22

YANBU. Quite easy for me as after one over-priced, diluted mud-water I experienced several years ago, I've never been to Starbucks since.

YANBU.....14 yes FOURTEEN years they've got away with this.

If we each write or email.the CEO it.will have huge impact too.

Go on you nest of vipers do your worst best !!

PhyllisDoris Tue 16-Oct-12 22:50:55

I would boycott, but I've never been in a Starbucks so it wouldn't make much difference! With you in spirit though.

edam Tue 16-Oct-12 22:50:59

Good idea. If enough people stop buying coffee from chains that don't pay their taxes, maybe we'll get some small independent shops opening up that do actually pay UK taxes. Some of them might even serve decent coffee...

VivaLeBeaver Tue 16-Oct-12 22:51:07

I'm in. Love my frappuchinnos but will frequent neros or costa from now on.

Eurostar Tue 16-Oct-12 22:51:22

I already choose independent where possible ever since I read about Starbuck's alleged strategy of moving into new areas where a financial loss is predicted in order to kill off independent competition (they had the financial clout to sustain the losses), which would turn to gains once they had the local market to themselves.

As chains go, Cafe Nero seem to at least do good things for the local community, I wouldn't be surprised though to hear that things are not as they seem.

Hear, hear

It's awful coffee anyway

WorraLiberty England Tue 16-Oct-12 22:52:07

Oh I'll just have a nice cup of home made tea with PhyllisDoris then grin

edam Tue 16-Oct-12 22:52:32

(I know lots of companies do this - Amazon for one - but Starbucks could be the poster child for tax-dodging multinational corporations that think they can enjoy a free ride at the expense of ordinary people who have no choice but to pick the slack.)

expatinscotland Tue 16-Oct-12 22:52:52

I haven't been in one in donks, anyway. Over-priced.

Viviennemary Tue 16-Oct-12 22:52:53

Yes I will. But I was looking forward to the gingerbread latte. Still I might get one somewhere else.

pinkteddy Tue 16-Oct-12 22:53:03

Count me in.

Home made tea <chants> home made tea <stamps feet> home made tea.

MadgeHarvey Tue 16-Oct-12 22:53:54

Starbucks coffee is just brown pisswater anyway - won't be a problem not going there.

Shouldn't we all be drinking tea really?

Something about austerity and tea bags seem to go together. Perhaps because you can reuse them? (Note: I do not. Yuck. But I could, I guess.)

PumpkInDublic Tue 16-Oct-12 22:54:44

I'm in.

I'm in, who wants my gingerbread syrup recipe?

toomuchmonthatendofthemoney Tue 16-Oct-12 22:55:57

Can anybody link to the statement or analysis so I can get a bit more info on what the OP is talking about, thanks?

WorraLiberty England Tue 16-Oct-12 22:55:57

I have no problem sacrificing my own needs and boycotting a coffee shop I've never been in for the sake of some MN solidarity.

Thank fuck it's coffee and not wine

maddening Tue 16-Oct-12 22:56:25

I'm in but was already - will spread the word

Oh but I like starbucks. <Whines> and and and, its right next door to where I have to wait for an hour and a half twice a week while dd1 does her extra curriculars...

Ohhhhhh I'll have to walk alllll the way to costa now. <Sulks> are we sure costa are any better?

I think I have been in there once, and found the whole pick a sandwich, had it to the staff who then put it on a plate with stale crisps thing really pretentious.

Do they still do that?

My boycotting them wont make much difference, but I agree with the principle.

SlightlySuperiorPeasant Tue 16-Oct-12 22:57:02

I do a better hot chocolate than Starbucks and Costa. Fact. The man who came to fix the windows said so grin

LineRunner Tue 16-Oct-12 22:57:24

How much tax have these cunts avoided over 14 years? £200 million? £300 million? More??

grin Worra!

flow4 Tue 16-Oct-12 22:58:21

I'm in too.
They could probably pay off the national debt all by themselves!
(Put the kettle on, MrsTP!)

Groovee Uruguay Tue 16-Oct-12 22:58:47

I never step foot in Starbucks over priced over the top and over here.

SlightlySuperiorPeasant Tue 16-Oct-12 22:58:55

What other companies are in the same boat?

BrainSurgeon Tue 16-Oct-12 22:59:30

Aargh just now when they opened a Starbucks at my office!!! Buggers! I'll do my best to stay away but may get a caramel macchiato every now and again

Sparklingbrook Tue 16-Oct-12 22:59:50

I'm with Worra, quite happy to continue boycotting Starbucks as i have never been to one. I am also boycotting Costa due to it being crapola.

ZacharyQuack Tue 16-Oct-12 23:00:09

I've always boycotted Starbucks. I actually like the taste of coffee.

I read that they'd only been doing this since the Tories have been in government. Not sure if that's true though

flow4 Tue 16-Oct-12 23:00:39
SkippyYourFriendEverTrue Tue 16-Oct-12 23:00:42

I would like to picket them.

But I'm lazy, and scared of being arrested, so I won't.

cantspel Tue 16-Oct-12 23:01:31

I have never been in a starbucks either. If i want a coffee and cake whilst in town i use a small local cafe as they dont charge an arm and a leg for a coffee with a strange name.

MissPricklePants Tue 16-Oct-12 23:01:48

Tesco, Vodafone and Arcadia Group (Topshop, Dorothy Perkins, Topman and Burtons) do not pay corporation tax. Neither do Amazon if I remember correctly.

mercibucket Tue 16-Oct-12 23:01:56

I'm in, and will email too

WineGless Tue 16-Oct-12 23:03:47

I'm in. However they are complying with current tax laws so how's about lobbying MPs to get them changed?

flow4 Tue 16-Oct-12 23:04:04

Actually, this link is better: www.bbc.co.uk/news/business-19967397

SlightlySuperiorPeasant Tue 16-Oct-12 23:04:08

BrainSurgeon give someone else the money to buy it for you, doesn't count that way wink

Does anyone else find mispronunciation Italian sizes excruciatingly pretentious and use good ol' 'small/medium/large' instead?

MummysHappyPills Tue 16-Oct-12 23:04:10

I'm in!

HoneyDragon Tue 16-Oct-12 23:04:13

My independent coffee shop does gingerbread lattes all year round!
They acknowledge the festive season by adding mulled wine instead grin

SlightlySuperiorPeasant Tue 16-Oct-12 23:04:34

Mispronouncing*

Solopower1 Tue 16-Oct-12 23:05:17

Right. Starbucks won't see my heels for dust.

Nor will Tesco, Vodafone, Arcadia Group, Boots, Barclays.

Any more? What about Sainsbury's? Waitrose? How can we find out?

MrsKeithRichards Tue 16-Oct-12 23:05:51

Its all the questions in these places that burst my head. Regular or Grande? Skimmed of full fat? In or out?

Same with subway. What bread? Toasted? Cheese? Bag? Sauce?

Argh! I want a cup of Joe and a fucking bacon roll. Not the third degree.

<better suited to roll vans next to building sites>

Quip Tue 16-Oct-12 23:06:22

Tesco doesn't pay corporation tax either? Wtf? Yanbu. I like their Xmas coffee range I have to admit but I won't go there again.

toomuchmonthatendofthemoney Tue 16-Oct-12 23:06:41

thanks

SkippyYourFriendEverTrue Tue 16-Oct-12 23:07:23

" <Sulks> are we sure costa are any better?"

Yes, they are.

They are a British firm (Whitbread), they pay their taxes in Britain, AND their coffee doesn't like like burnt water!

Hurrah!

May I recommend the Mango & Passion Fruit Cooler btw.

cantspel Tue 16-Oct-12 23:07:24

I have no idea what a gingerbread latte is so i am quite happy with my plain cup of coffee in a mug for 90p

Subways are local people though (dont want innocent companies boycotted) but yes too many questions.

Peachy Tue 16-Oct-12 23:07:54

Another who is in: I like my coffee- can;t drink tea, horrible without milk IMO- but will now go for either M&S or Costa (the other two options available in my local shopping centre, except for Asda anyway who make crap coffee and have enough ethical problems of their own).

MrsKeithRichards Tue 16-Oct-12 23:08:27

Glad Costa is ok. It's my wee hide out!

Peachy Tue 16-Oct-12 23:08:48

Given the site is it worth reminding people about the recent news that Costa is much higher in caffeine so worth being wary if pregnant (luckily my preggers days long gone)

MissPricklePants Tue 16-Oct-12 23:09:20

Oh yes Boots is another one I avoid, I don't bank with Barclays so easy to avoid that one. It is getting beyond a joke with all these large profitable businesses tax dodging. According to UK Uncut RBS, Natwest, Lloyd's, HSBC, Halifax, Cadbury's and Walkers also avoid paying corporation tax.

WineGless Tue 16-Oct-12 23:10:08

Peachy, am still boycotting M&s after Hooters scandal last year. My list of coffee shops is diminishing!

WorraLiberty England Tue 16-Oct-12 23:10:35

I suppose MN is the wrong place for me to confess I only drink Nescafe and that happens to be made by Nestle?

Thought so blush grin

VivaLeBeaver Tue 16-Oct-12 23:10:51

I'd struggle to boycott Amazon.

MummysHappyPills Tue 16-Oct-12 23:10:51

Costa is also very bfing friendly, and do a mean babyccino complete with marshmallow on the side, so very toddler friendly too! grin

Think lobbying MPs is the way to go as its so widespread.

Jimmy Carr was deemed immoral. Is DC going to give a speech about all this?

MrsKeithRichards Tue 16-Oct-12 23:11:44

Sorry I'm not implicating subway as tax dodgers, just guilty of asking to many questions.

Our local one has been taken over by a new franchisee who doesn't supply hp brown sauce because subway don't. The last people just added their own shop bought hp to the selection but these new gits are sticklers for the rules.

It's a fucking outrage.

Sparklingbrook Tue 16-Oct-12 23:12:19

Costa is horrible. You need a bank loan to buy one of those coolers which is mainly ice. grin

BustyDeLaGhetto Tue 16-Oct-12 23:12:44

Starbucks coffee sucks anyway coffee expert face

I hate the place.

grin MrsKeith

MadgeHarvey Tue 16-Oct-12 23:14:14

I'm embarrassed for you worra grin - I'd rather admit buggering fluffy bunnies than drinking Nescafé.

halloweeneyqueeney Tue 16-Oct-12 23:14:46

I'm in

Costa mings, but agree that they are very breast feeding friendly, my local ones really are very kind to new mums and go out of their way to do table service and help you out

Peachy Tue 16-Oct-12 23:14:48

I can't boycott Amazon, one of our main income sources, we'd literally go bankrupt. I'll change my brand of coffee but I won't make the boys homeless!

M&S I could do I guess, I did for a while but have a poor memory (sorry)

Fave coffee shop is local village one, very nice <said in tone of Boris at Conference> but nearest town a bit lacking. Newport ahs a Wilkinson's coffee shop though, shame the staff are all bloody rude.

Shaky Tue 16-Oct-12 23:15:02

Is costa ok? That is my pay day treat to myself, a monster size hot chocolate with marshmallows in peace, it's a rare occurrence. I will be heart broken if I have to boycott it cos they are dirty, cheating bastards!
<sobs>

Sparklingbrook Tue 16-Oct-12 23:15:27

Subway is just sandwiches really isn't it? Do you need a foot of bread-really? And what is the awful smell?

But it's coming up to gingerbread latte time and I don't have gingerbread syrup.

<sulks>

Shaky Tue 16-Oct-12 23:16:47

X posted with loads of people, sorry

EntWife Tue 16-Oct-12 23:17:10

not to piss on anyones parade but most Starbucks are run by individuals who have bought the franchise from the franchiser, who is actually the one who doesn't pay tax in the UK. very few are centrally run. the franchisee buys their beans and other merchandise from the
franchiser or an associated
company. the individual shops almost certainly do pay tax in the UK and are run as small businesses.

Peachy Tue 16-Oct-12 23:17:14

The local Subway is inside our Tesco <<head explodes>>

Subway does good salads though

WorraLiberty England Tue 16-Oct-12 23:18:06

Madge before you get all finger pointy, you do realise that Nestle also make that cider flavoured breast milk lube I sent you through the post last week? hmm grin

Peachy Tue 16-Oct-12 23:18:10

It's corporation tax we are talking about isn't it? As opposed to all tax?

Sparklingbrook Tue 16-Oct-12 23:18:16

Our local Costa is inside Tesco Peachy. shock

MrsKeithRichards Tue 16-Oct-12 23:20:07

I always take the hearty Italian and have visions of a well rounded ruddy cheeked elderly Italian man holding his tummy and laughing.

Ok, I'll switch to costa but I can't do tesco or amazon. (One step at a time wink )

SkippyYourFriendEverTrue Tue 16-Oct-12 23:22:46

"not to piss on anyones parade but most Starbucks are run by individuals who have bought the franchise from the franchiser, who is actually the one who doesn't pay tax in the UK. very few are centrally run. the franchisee buys their beans and other merchandise from the franchiser or an associated company. the individual shops almost certainly do pay tax in the UK and are run as small businesses."

Completely wrong, from start to finish.

They are a megacorp taking all their money back to the US via Nazi-tax-shelter-istan. No 'small business' at all, and not a franchise.

www.starbucks.com/customer-service/faqs/business

Others, e.g., McDonalds do franchise: www.mcdonalds.co.uk/ukhome/Aboutus/Franchising.html

Oh I can't do natwest, they're the only bank that will have me blush

XBenedict Tue 16-Oct-12 23:24:19

I think Costa is a franchise too.

SkippyYourFriendEverTrue Tue 16-Oct-12 23:24:47

"It's corporation tax we are talking about isn't it? As opposed to all tax?"

Corporation tax is like income tax.

So if I say 'I do pay tax, look I paid VAT on this yacht I bought, and my nanny pays income tax, see I am paying tax, I just don't pay any income tax', that would be quite similar.

imperialstateknickers Tue 16-Oct-12 23:25:18

Happy to boycott Starbucks. Have tried both UK and Canada. Pile of poo.
Also have yet to have a decent sandwich in Subway. Have tried three different ones, still no joy. Thank God for Greggs.

Love a good boycott me.

LineRunner Tue 16-Oct-12 23:25:24

Yes and the parent companies make a fortune out of the franchisees. Which they should be paying UK tax on.

SkippyYourFriendEverTrue Tue 16-Oct-12 23:26:23

Yes, seems so XBenedict: www.costa-business.co.uk/costa-coffee-shops/

So the Costa franchisees would pay corporation tax AS WELL as Costa themselves.

Unlike Starfucks, who don't pay any at all.

ScrambledSmegsEvilTwin Tue 16-Oct-12 23:26:34

It's a very well-known arrangement with HMRC that lots of big businesses have. Starbucks aren't the only ones. It's really the fault of HMRC for not sorting out the Corporation Tax issues surrounding companies like Starbucks. Of course now it's being reported as Starbucks ripping off the poor ickle UK, instead of HMRC being the incompetent shower of fuckwits that they are.

However YANBU because Starbucks coffee is rank. Not as bad as Costa (burnt beans, yuck), but worse than Nero who are the only chain that can make a half-decent cappucino - only half decent mind. Support independent chains, please!

PropertyNightmare Tue 16-Oct-12 23:26:56

I started a thread about this earlier today. Yes, I am disgusted at Starbucks. Taking 1.2 billion from the UK economy between 2009 to date and laying not one penny income/corporation tax. Dh and I won't ever give them our custom again. I hope that every single one of their shops is empty tomorrow.

SkippyYourFriendEverTrue Tue 16-Oct-12 23:27:09

<can happily boycott Starbucks and their shit coffee, all day long>

XBenedict Tue 16-Oct-12 23:27:44

I will be sticking with Costa!

CuttedUpPear Tue 16-Oct-12 23:29:41

Boycotted them since day one.

StuntGirl Tue 16-Oct-12 23:37:20

There used to be an amazing independent coffee shop where I used to live, don't know if it's still there.

Round here there aren't any independent coffee shops, a few dodgy cheapo cafes and a few uber posh expensive cafes but that's it sad

To save all this talk about burnt beans and whatnot, if someone could point me in the direction of where to buy hazelnut syrup I would happily make my own and take a flask.

imperialstateknickers Tue 16-Oct-12 23:37:31

Re Caffe Nero, they've got a nasty habit of opening up without planning permission. They've done it here, and in three other market towns within a twenty five mile radius. They keep going for the 'whoops, sorry, here's our retrospective application' excuse/method. Meanwhile we're stuck with 29 places to buy a coffee and nowhere that sells children's knickers. xx Harassed of scenically attractive tourist trap town.

I've ordered a coffee machine and one of those not a paper cup from amazon I will make my gingerbread syrup and I'm sorted

<sulks that noone wants the recipe>

mrsrhett lake land do it...

I dont like starbucks. I do love Costa coffee though.

Acumens100 Wed 17-Oct-12 09:00:27

I'm in. I will walk the eleven yards to Costa/Nero/Indie! My sacrifice is mighty!

I now live in a country (italy) with no Starbucks or Costas. For now.
But I am in. Not just for the taxes thing, but because the coffee is undrinkable, the portions enormous.

threepiecesuite Wed 17-Oct-12 09:06:17

A new Starbucks is being built 2 mins from my house. I was going to give it a try but won't be now thanks to their dodgy tax-avoiding ways.

Do love a Nero though, one-shot Vanilla latte for me. Hope they're not too dodge.

Caerlaverock Wed 17-Oct-12 09:10:26

I have never gone to Starbucks apart from at airports which is the correct place for such soulless corporate shitola.

PickledFanjoCat Wed 17-Oct-12 09:11:08

Im in!

jennywren123 Wed 17-Oct-12 09:21:41

I can make a fab Gingerbread latte. With whipped cream and a light dusting of nutmeg.

*runs off to check supplies of gingerbread syrup.

maillotjaune Wed 17-Oct-12 09:35:56

With you in principle but can't stand their coffee so don't use anyway. This thread has inspired me to get a flask and take my own lovely coffee to work in the morning.

HappyTurquoise Wed 17-Oct-12 09:38:57

Will never buy from them again.

Starbucks is pretty much the only coffee I like from the local high street shops. Everyone else seems to burn theirs.

O do have a new posh Thermos too, and am going to use it!

melika Wed 17-Oct-12 09:43:00

Can't say I have ever been to a Starbucks, (would rather go home and have a coffee) but I am disgusted with them over the avoidance of tax.

I'm in your gang now!

2rebecca Germany Wed 17-Oct-12 09:43:51

There aren't any in this area of Scotland, we're in Costa land so I can boycott them easily! Costa also has the irritating Italian sizes, silly in a non-Italian company. Agree re preferring small, medium and large which is what I usually ask for anyway.

CinnabarRed Wed 17-Oct-12 09:44:33

Starbucks haven't avoid any tax at all.

They have £millions of UK sales. That's not the same as UK profit. Our tax regime, and everyone else's, taxes profits. There's actually a reasonable argument to say that everyone globally should switch to taxing turnover rather than profits but that won't happen anytime soon.

The tax legislation forces them to use transfer pricing to ensure that they price transactions between Starbucks companies in different countries at an arm's length rate. No more, no less. That's all it does. It's not a loophole, just an instruction telling companies what price they should charge if they're in the same group.

So what if they use a Swiss company to purchase coffee beans for all of the European Starbucks companies? It makes sense for one central company to do it to take advantage of economies of scale. If the UK company sourced its own coffee beans that (i) its costs would go up because it would have to run another operation of sourcing coffee beans; and (ii) it would pay more per kilo of coffee beans because it wouldn't have the advantages of economies of scale. If it purchased coffee beans from someone other than a Starbucks company then it would pay that independent company the same price as it's paying the Swiss company. So no difference to its profits/losses there then.

Exactly the same with roasting the beans. If you think it shouldn't pay another Starbucks company to do it then where do you think it should get its roasted beans from? Should it roast them itself (reduced profits) or pay an independent company to do it (same profits, certainly not increased)?

There are so many examples of really nasty tax avoidance out there - this ain't one of them.

FutTheShuckUp Wed 17-Oct-12 09:45:10

Sorry no can do. The christmas drinks are the only thing that gets me through the bleak dark winter

Adversecamber Wed 17-Oct-12 09:47:00

I hate Starbucks coffee so will join up my own mini boycott of one to yours comrade.

zzzexhaustedzzz Wed 17-Oct-12 09:52:09

I'm in. I too really hate the portion sizes (of coffee) and general bullshit, though I have been in before.
But should we also boycott the Rolling Stones?

PickledFanjoCat Wed 17-Oct-12 09:54:32

I refuse to say grande or whatever, I find it embarrassing.

EnjoyVampirebloodResponsibly Wed 17-Oct-12 10:00:57

Scrabledsmegs makes a vg point up thread. I vote Mumsnet bans HMRC!

I'm happy to boycott Starbucks, if I can go to Pret. Or are they scheming tax dodging bastards as well?

<wonders why I can fart without being bloody taxed, when Amazon can make gatrillions and pay a fiver angry

storminabuttercup I'd like your recipe please.

Brycie Wed 17-Oct-12 10:03:47

I was wondering if I would see this! Well done lego, it will be Costa or the tea rooms for me now. A bloke was suggesting a boycott on the tv this morning. I think they'll be quaking! Starbucks must be choc to the rafters with mumnetting women and it could turn into Nestle ie everyone hates them but sometimes it's quite hard to remember why. Toxic.

PropertyNightmare Wed 17-Oct-12 10:08:50

<<<<<~whooooooosh~>>>>>

Can you hear it? The sound of tumbleweed blowing across the floor of your local Starbucks.......

smile

storminabuttercup I'd like your recipe too!

I do understand that point about HMRC being the ones who've made the legislation 'read' the way it does, but it makes me extremely cross.

Has anyone read Cinnabars post? She explains perfectly why a boycott isn't the way to go. They aren't doing anything illegal at all. If you disagree with how corporation tax works then lobby your mp.

SlightlySuperiorPeasant Wed 17-Oct-12 10:22:15

DH announced last night that he is buying a coffee machine for the kitchen. When I pointed out that neither of us drink coffee he said he'd use it to make hot chocolate. When I pointed out that we would still need to add marshmallows, whipped cream and cinnamon by hand he said that that was ok, it didn't take long and the machine would do the mixing bit for us. When I then raised my eyebrows and said that was a very expensive teaspoon, he realised the error of his ways hmm

SkeletonButterfly Wed 17-Oct-12 10:22:50

I want the syrup recipe! I have nommy Azera coffee which is apparently Barista style instant and would love to make a syrup to go with it grin

SlightlySuperiorPeasant Wed 17-Oct-12 10:23:23

Who wants to listen to boring tax facts when a boycott is so much more exciting?

FreckledLeopard Wed 17-Oct-12 10:25:43

I'm afraid I can't get het up over this. I don't go to Starbucks if I can help it, but only because their coffee is vile and tastes like dishwater. Pret do a good coffee though....

However, if a multinational corporation legally and legitimately reduces its tax bill, then why should I boycott them? If you have issues with the tax legislation, take it up with your MP. Starbucks helps to create jobs by opening stores - no-one is forcing anyone to go there if they don't want to. And, arguably, the fact that Starbucks et al have had such an impact on the way that people think about coffee in the last 20 years, means that independent coffee shops have been able to open, as more people become fussier about what they drink (for example - http://www.fleetriverbakery.com/). I doubt many individuals would willingly pay significant amounts of tax if there was a legal way to avoid it - I know I wish my tax bill was lower. So I think it's a bit hypocritical and misplaced to vent against multinationals when they're doing something that is legal and makes good business sense to do so.

CinnabarRed Wed 17-Oct-12 10:26:32

There's a good article in the Guardian today.

http://www.guardian.co.uk/news/datablog/2012/oct/16/tax-biggest-us-companies-uk

Note that although collectively the US companies involved has sales of £116bn, their book profits were only £5bn. Tax paid was £1.5bn - more than you would expect given the corporation tax rate in the UK last year was 24%.

Note also that Facebook's audited revenue was only £20m. Way, way less than the estimate by 'industry experts' of £175m.

CinnabarRed Wed 17-Oct-12 10:27:40

True peasant

I understand why it bothers people but boycotting won't change tax laws. Any loss of revenue will effect staff wages, overtime etc. I can't fetal enthusiastic about potential job losses for minimum wage workers.

*feel enthusiastic

Katiepoes Wed 17-Oct-12 10:37:52

I'd join a boycott if it's protesting them wanting my name to call me. Irritiating faux friendliness. Tax - well as said that's a much bigger problem that you need to raise with the people you vote for. Starbucks are only doing what the law allows - you put the Tories in place and then moan about these practices?

I'm tickled my the idea of mailing the CEO. Dear CEO please pay more tax than legally required. Good luck with that.

CinnabarRed Wed 17-Oct-12 10:44:05

Starbucks aren't doing what the law allows - they're doing what the law demands - pricing their intragroup transactions on arm's length terms!

Don't get me wrong - the transfer pricing legislation is anti-avoidance, but it's designed to stop companies pricing transactions artificially high, so as to reduce UK profits and UK tax.

If Starbucks were paying £100 per kilo for coffee beans when the market rate were £10 (no idea what the going rate is) then they would be trying to avoid UK taxes. But in that scenario the transfer pricing legislation would kick in to stop them. They would be obliged to use a price of £10 per kilo in their tax computations irrespective of the price they actually paid. But that's not what they're doing.

Market rates, people, that's what Starbucks are paying for their roasted coffee beans.

Everlong Wed 17-Oct-12 10:45:36

I hate costa.

Once I was in there with ds waiting for my whatever and the girl behind the counter who I think is in charge or deputy said to another member of staff ' she only gave him a blow job in the bogs ' Nice. She also wiped her nose with her sleeve and another time I've seen staff eating a toastie behind the counter whilst serving.

But yes you have a point about Starbucks.

MissPerception Wed 17-Oct-12 10:48:38

Starfuckers sell "coffee" tastes like inspid dishwater and that's (one of the reasons I haven't been inside one for many years). However I will boycott them too.

Mimstar Wed 17-Oct-12 10:49:34

I worked at Starbucks for 5 years, my best friend still works there, I still go in there all the time and the new Salted Caramel Mocha is delish.

If you all want to have a strop about them doing something legal - honestly, you won't be missed. It's not like you will put them out of business. I just find this sort of petulant 'let's boycott everything' attitude really silly..

I will, the coffee is rubbish and over-priced.

Absy Wed 17-Oct-12 10:53:14

Presumably you're all also boycotting the BBC who was found to be assisting 1,500 staff in avoiding taxes as well? Yes?

SkippyYourFriendEverTrue Wed 17-Oct-12 10:54:28

Unfortunately if you boycott the BBC (something I'd do very happily), you will go to jail. Unless you throw away your TV entirely that is.

CinnabarRed Wed 17-Oct-12 10:58:33

About 5 years ago Starbucks came in for a lot of criticism about their use of water. Their dishwashers used a running stream of water to get contents clean, which uses a lot more water than conventional dishwashers.

Evil bastards, I thought.

Until it turned out that they'd spent a fortune on environmental consultants to find out what method of washing up caused the least environmental damage. The consultants told them that it's the detergent that's the real issue, and that using pure running water was much better. So Starbucks spent literally millions upgrading all of their dishwashers and washing up facilities.

And still got criticised...

BeyondLimitsOfTheLivingDead Wed 17-Oct-12 11:00:04

peachy the zoo cafe used to do gorgeous coffee in Newport and I may had had one (delivery too!) every day while I was working... grin
They're closed now though sad

The secrect garden cafe on charles street is supposed to be good it is owned by a friend of mine but I've never actually been in there blush

I love starbucks, but can't afford it at the mo. But I'll pretend I'm not having it cause I'm boycotting grin and stay home drinking Nescafe like Worra...

CinnabarRed Wed 17-Oct-12 11:00:44

Oh God. Another misunderstanding, this time about the BBC. Is it worth me debunking this one? I will if anyone's listening...

BeyondLimitsOfTheLivingDead Wed 17-Oct-12 11:01:20

I am boycotting the BBC grin
tv licence went the way of the starbucks in frugal times

Gingerbread Syrup
2 cups water
1 1/2 cups granulated sugar
2 1/2 teaspoons ground ginger
1/2 teaspoon ground cinnamon
1/2 teaspoon vanilla extract

Combine the water, sugar, cinnamon, ginger, and vanilla in a small to medium saucepan.
Bring mixture to a boil then reduce heat and simmer uncovered for 20 minutes. When done, pour into a melt-proof container and let cool. It will thicken a bit more once cooled.

<ignores all the political stuff and thinks about how much money we will all save>

<Happily listens to Cinnabar and snuggles into comfy seat at starbucks>

pinkteddy Wed 17-Oct-12 11:08:26

so far as I am aware the government encouraged the BBC to take lots of staff off the payroll and put them onto contracts so as to avoid pension, redundancy and NI costs. I will see if I can find the link. And presumably its not the BBC avoiding tax but the individuals concerned??

SkippyYourFriendEverTrue Wed 17-Oct-12 11:11:04

"Market rates, people, that's what Starbucks are paying for their roasted coffee beans."

Totally wide of the mark, nothing to do with beans at all.

Starbucks pay 6% of sales to, er, Starbucks, for use of their brand name.

This ain't about beans.

They have an entirely arbitrary fee that ensures that Starbucks UK makes a loss, while sending £millions in untaxed profits royalties abroad.

If Costa were able to divert an arbitrary percentage of their sales overseas, they wouldn't pay any taxes either.

But they don't, they are owned by Whitbread, a UK firm, and sending 6% from Whitbread to Whitbread would still result in UK taxes being paid. (Of course it's likely that Whitbread could set up complex offshore structures to avoid this, but they haven't, and I personally am grateful that they do not.)

The worldwide taxation system is complex and essentially unreformable.

For this reason, it is absolutely the correct response when a company selling a discretionary consumer product is on the one hand spouting off about 'fair trade' yet with the other busily avoiding taxes in the UK, to say "I will not spend money in this restaurant."

Telling people to complain to their MP is simply absurd.

Veeeeery simple folks. Don't like Starbucks business practices? Don't shop there.

But please don't kid ourselves that we can change the entire world order.

Oooh, yum! thanks storminabuttercup

brew with added gingerbread syrup - mmmm

Woozley Wed 17-Oct-12 11:15:14

There isn't one locally, so it's pretty easy...

horsebiscuit Wed 17-Oct-12 11:17:05

I went to Starbucks this morning. I had an extra hot hot chocolate and an apple crumble muffin. It's the only place locally with clean baby changing and enough space for a buggy. No one has shown me any evidence that they break the law (I'd be happy to see it, seriously) so if you're unhappy with the way corporation tax works- for Starbucks and the host of other companies named on this thread- lobby your MP through "they work for you" or similar. Maybe someone could link to such a petition, that would be more useful than a boycott methinks.
BTW I'd cheerily go to Fleet River Bakery if that was local, though last time I was there I had to change baby on the floor of the toilets- nice.

SkippyYourFriendEverTrue Wed 17-Oct-12 11:22:59

I think it's simple.

If Starbucks UK was not profitable they would be closing stores to rationalize the business. Something we have seen with companies like Clintons.

In fact they have been opening new stores, and only closed 10 stores last year.

Plainly the business is a profitable one.

And no, it's not illegal, but that doesn't mean we should spend our money there.

DH and I hate Starbucks and their over-priced 'coffee' so count us in. We use local independent cafes.

mommybunny Wed 17-Oct-12 11:25:26

Thank you Cinnabar, I was beginning to despair at the sheep-like mentality - "ooohher, I'm in, EVIL tax dodgers!!" You are one of the few talking typing sense here. Everyone else just sticking their fingers in their ears and going "lalalalalalalala". People banging on and on about how much companies like Starbucks have taken out of the UK economy - are you for real? Do thousands of high street jobs mean nothing?

Avoid the company because you don't like the coffee (like me), or the (admittedly irritating) faux-familiarity behind the counter grates on you, or you think it's too crowded, or too expensive. Those are the grounds on which Starbucks came here to compete, and those are the things it can change. But to boycott it because the media (including the "tax dodging BBC"!) have reported that they have conducted their tax affairs completely within the law makes absolutely no sense at all. Do you think Costa writes a cheque to HMRC every year for the tax it feels "morally obliged" to pay, rather than what it is "legally obliged" to pay? My DH used to be very senior within the Costa organisation and believe me, the idea would be laughed out of the boardroom.

If you boycott every single company in the UK that has arranged its tax affairs legally and efficiently you won't have anything left to buy or consume. And the economy will be in even deeper sh-t than it's in right now. But you boycotters will all feel better then, won't you?

Bramshott Wed 17-Oct-12 11:26:07

Cinnabar - yes, if you could debunk the BBC thing that would be great! I am self-employed and fed up with the fact that everyone now thinks that everyone who freelances is fiddling their tax!

Bar one Gingerbread latte on a very cold day in December (TBC) I already do!

ScrambledSmegsEvilTwin Wed 17-Oct-12 11:28:29

CinnabarRed has explained perfectly what I meant upthread. Starbucks aren't doing anything wrong, in fact they are conscientiously doing what the law requires.

This would mean that I can quite happily drink my gingerbread latte in its festive red cup without a qualm except... I really don't like their coffee.

Absy Wed 17-Oct-12 11:28:37

There's a reason I used the term avoidance, as the BBC has been complicit in avoidance, which is legal. So if you're going to boycott Starbucks for legal tax avoidance why not do the same for the BBC? And boycott anyone who has an ISA

PickledFanjoCat Wed 17-Oct-12 11:30:50

Have you got a first class honours in patronising momma? That post is a pure masterpiece!

I think the point is, we should be supporting local businesses and UK businesses instead of giving our money to these huge corporations.

Maybe our economy would look better if we all supported our high street instead of going to identikit out of town shopping centres to give tesco and the like our money instead.

PickledFanjoCat Wed 17-Oct-12 11:35:35

If people dislike the way their tax affairs are handled even of it is still technically within the remit of uk law why shouldn't they drink elsewhere?

Starbucks is one of many companies perhaps but they have been publicised and therefore may bear the brunt of people's annoyance with this issue.

SkippyYourFriendEverTrue Wed 17-Oct-12 11:36:05

You can't boycott the BBC, it's illegal, if you own a TV.

And ISAs are a savings scheme. To encourage people to have savings so they don't end up on benefits, which have to be funded out of taxes.

Which Starbucks aren't paying.

The idea that all tax avoidance is equivalent is just bollocks. For instance Jimmy Carr's income was structured as a loan. A loan that would never be repaid. Which is not comparable, to my mind, with say venture capital schemes where a tax break is provided to encourage new businesses to be set up (which might then make the owner money), the supposed 'loan' (of Carr's own money to Carr) had no other purpose.

Every scheme should be considered on its merits. When it comes to HMRC, whether it is legal. And when it comes to consumers we can consider whether it is reasonable. And if we don't like it, vote with our feet.

Simple.

Onemoreforgoodmeasure Wed 17-Oct-12 11:36:43

But the frapacinos (however it's spelled) are so good, and they have lovely big seating areas...

PickledFanjoCat Wed 17-Oct-12 11:38:01

Plus you pay 10% tax on dividends in an isa, so lots of people are paying some tax.

Every little helps.

flowery Wed 17-Oct-12 11:39:40

No one pays more tax than they absolutely have to. No one thinks, ooh HMRC have left a loophole which will save me money but morally I should pay more so here it is.

I own my own business. I pay myself a very small salary and put expenses through the business where appropriate, then pay anything additional in dividends. I do all this because it saves me tax, which paying myself a higher salary would not. Perhaps some would think that because I earn x amount during a year, I ought to pay it all through PAYE and pay more tax on it?

There are loads of companies operating in this country who do genuinely illegal or immoral things in terms of supply chains, child labour, all sorts of really nasty stuff. Being tax efficient and acting within the law as it is is not one of those situations.

flowery Wed 17-Oct-12 11:41:05

Having said that, boycotting large corporates in support of local smaller businesses is a different question and much more 'worthy' than doing it because they are tax efficient.

Absy Wed 17-Oct-12 11:43:57

"You can't boycott the BBC, it's illegal, if you own a TV"

That's incorrect. It's illegal if you have a TV and watch live broadcasts. If you don't, and you don't have the ability to watch live broadcasts, you don't have to have a licence BBC tv licence website

PickledFanjoCat Wed 17-Oct-12 11:44:08

Or choosing to drink coffee supplied by a company that pay more uk tax for whatever reason.

It's like saying to me ooo there's no point in recycling unless your going to use candles wash in a stream and install solar panels.

crazygracieuk Wed 17-Oct-12 11:45:34

Starbucks employees will be paying income tax and national insurance so why penalise them? With youth unemployment so high wouldn't you feel guilty contributing to that?

Starbucks is taking advantage of tax laws made by politicians and organisations like HMRC. When I go to places like SB I feel much more guilty about the developing country farmer who made the coffee getting such a small percentage of the price I paid- even if it's Fairtrade.

crazygracieuk Wed 17-Oct-12 11:47:06

How do I find my local independent coffee shop? Are they listed on yell as coffee shops?

mommybunny Wed 17-Oct-12 11:47:25

Pickled, if you're talking to me, it wasn't meant to be patronising, and I apologise if it came out that way. It was sheer frustration.

I am just getting sick of the media whipping people into a frenzy of fury and finger-pointing over tax dodging when they're not telling the full story. Then legitimate enterprises who are trying to create jobs and pay people who will then pay tax find themselves in the middle of a media sh-tstorm and boycotts and ultimately they will say "you know what, f-ck this, I'm not operating in this market anymore". Starbucks itself may not do that, but plenty of other businesses will look at the Starbucks example and get the hell out of the UK. It is just so counter-productive.

As I said above, there are plenty of reasons not to patronise (that word again) Starbucks, all of which are perfectly legitimate and, most importantly, based on actual knowledge - you don't like the coffee or the servers or the prices or the atmosphere. Starbucks can change those things if they're annoying to enough people and it's a fair basis on which to compete with the likes of Costa/Caffe Nero/independents. But to boycott because of a single line in their accounts, without having any understanding of the context behind that single line number, is not rational and no sane CEO would stay in a market where that was rife.

I very much doubt the CFOs of Costa and Caffe Nero are crowing today - they are just silently thanking some supreme being that they dodged a bullet now, in the knowledge that in this environment the bullet may be coming for them next.

TheDoctrineOfSnatch Wed 17-Oct-12 11:48:10

Thank you Cinnabar. I would love your view on the BBC thing too.

Somewhere upthread Peachy asked about income tax. It will be corporation tax that is affected by transfer pricing etc, income tax on salaries as well as employer and employee national insurance contributions will still be due.

flowery Wed 17-Oct-12 11:48:20

I find it bonkers that people genuinely seem to expect any big company (or in fact anyone at all) to voluntarily hand over more money to the taxman than necessary. confused

SkippyYourFriendEverTrue Wed 17-Oct-12 11:48:59

"No one pays more tax than they absolutely have to. No one thinks, ooh HMRC have left a loophole which will save me money but morally I should pay more so here it is. "

Bollocks.

Absolute bollocks.

www.newstatesman.com/blogs/voices/2012/06/tax-avoidance-isnt-left-or-right-issue-its-cancer-eating-our-democracy

"I own my own business. I pay myself a very small salary and put expenses through the business where appropriate, then pay anything additional in dividends. I do all this because it saves me tax, which paying myself a higher salary would not. Perhaps some would think that because I earn x amount during a year, I ought to pay it all through PAYE and pay more tax on it?"

I suggest you don't project your way of thinking onto others.

You do X. Good for you.

But that doesn't mean everybody else thinks or behaves the same way.

Ladymuck Wed 17-Oct-12 11:51:09

My local independent coffee shop doesn't pay corporation tax either despite having a high turnover. By the time it has paid salaries, business rates and rent there is no profit left to pay corporation tax on.

SkippyYourFriendEverTrue Wed 17-Oct-12 11:52:31

Because everybody is buying their coffee in Starbucks instead.

TheDoctrineOfSnatch Wed 17-Oct-12 11:53:33

But skippy, HMRC has constructed its rules and from that developed its budgets in the expectation that someone like flowery will use dividends in the way she does. There will still be a tax take from those dividends, just lower on a personal basis and perhaps higher on a corporate basis. As they see things that don't work how they expect, they introduce other changes eg IR35 which stopped people acting as a "consultant" to their only employer.

TheDoctrineOfSnatch Wed 17-Oct-12 11:55:11

Skippy again that isn't true - if the turnover is high, the lack of profit is down to high costs, which are higher for a single independent with no bulk discount, ability to move raw product between outlets, central training programme etc.

PickledFanjoCat Wed 17-Oct-12 11:58:26

Well in my opinion it's how far you go, how complex these schemes are.

Flowery is clearly acting within expected remit of uk taxation law.

If your employing experts to effectively outwit the governments intentions by using ever more complex schemes to exploit unintentional loopholes in the law then morally?? That's where I think it's suspect.

flowery Wed 17-Oct-12 12:02:00

Goodness Skippy you're a bit stroppy!

Perfectly easy to engage in debate without that, I'd say.

Yes, I will hold my hands up. Maybe it's not entirely accurate to say no one pays more tax than they have to. I'm sure you are on a higher moral plane than me and voluntarily hand over wads of cash to HMRC to assist with the budget deficit.

So shoot me, I don't do that. And I don't know anyone else who does either. So from my own experience, no one pays more than they have to.

EdgarAllanPond Wed 17-Oct-12 12:09:54

although the law recognises that everyone will try to minimise the tax they pay (and HMRC conversely, is charged with collecting as much tax as it can)

has Starbucks behaved unlawfully - is it avoiding payment?

SkippyYourFriendEverTrue Wed 17-Oct-12 12:10:30

"But skippy, HMRC has constructed its rules and from that developed its budgets in the expectation that someone like flowery will use dividends in the way she does. There will still be a tax take from those dividends, just lower on a personal basis and perhaps higher on a corporate basis. As they see things that don't work how they expect, they introduce other changes eg IR35 which stopped people acting as a "consultant" to their only employer."

Yes I'm aware of this.

Basically what happens is that tax shifts onto things that are easy to tax.

So consumer goods - easy.

Minimum wage staff getting paid by PAYE - easy.

Rich people with businesses and complex investments - hard.

So people like flowery have a great many options. E.g, structure the business (assuming it is one, and not disguised employment) as self employed, and pay income tax through self assessment, go for a Limited Company and pay corporation tax instead, and potentially go beyond this with things like offshore companies as well.

So I wouldn't say so much that HMRC (the government really), are happy about this, the are just resigned to this, and have taken steps like cutting corporation tax with a view to encouraging people to pay it.

Income tax is only for little people - you pay it if you earn £60k, but most will baulk at paying it on £600k.

Bear in mind that cleaners are taxed at 32%, corporation tax is 24%/20%, and in theory the rich are taxed at 50%/52%, but on the whole (with a few exceptions) they find that excessive so they just avoid it.

"Skippy again that isn't true - if the turnover is high, the lack of profit is down to high costs, which are higher for a single independent with no bulk discount, ability to move raw product between outlets, central training programme etc."

Central training programme? For a single coffee shop?

Coffee has a very high gross margin.

I could see perhaps that a corner shop selling baked beans and loaves of bread might struggle to compete with say Tesco when it cannot buy at Tesco's selling price, but an independent coffee shop still stands to make a large gross profit on each cup. The issue is almost certainly lack of sales.

SkippyYourFriendEverTrue Wed 17-Oct-12 12:12:20

"Goodness Skippy you're a bit stroppy!"

Sorry.

"So shoot me, I don't do that. And I don't know anyone else who does either. So from my own experience, no one pays more than they have to."

I've met several people that do. But I imagine it varies from sector to sector.

CinnabarRed Wed 17-Oct-12 12:18:33

Ah, Starbuck's brand. An interesting point and one I'd like to address before the BBC, if that's OK with everyone.

Question: brands are valuable to companies and it's important that their value is maintained (because a good brand means more people buy your goods and services). But where do brands naturally 'live'? They don't have physical form, so you can't point to something tangible and say 'there it is'. Come that that, what is a brand anyway?

Most groups of any size in the B2C market (less important for B2B) recognise that they need to actively manage their brand to maintain its value. That means maintaining the registrations of intellectual property that can be registered (trade marks being the most important in the context of brand). Often groups will centralise the ownership of all the registered IP worldwide into one company, which is expert at registering and maintaining that IP. That's not enough, however, to support a brand. You need to run advertising campaigns, agree marketing strategies, develop a brand message. And enforce your brand strategy around the globe.

So where do you think Starbucks should manage its brand from? There are 200 odd countries in the world in which Starbucks operate - are you seriously suggesting that it makes sense for Starbucks to expect every single local market to manage its little chunk of the global brand? Of course it doesn't. It only makes sense to do it centrally. The UK isn't the 'natural' home for the Starbucks brand. There isn't really a 'natural' home for any global brand.

So if you accept the basic premise that global brands need to be managed cetrally, and that the UK is no more the natural home for the brand that France, or Germany, or Australia, or anywhere else, then don't be surprised if the brand isn't managed here.

Should we be surprised that the UK Starbucks company is paying to use the brand name in the UK? No, of course not. Undoubtedly sales are increased by using the Starbucks name compared to not using it.

The transfer pricing rules require that Starbucks UK pays the arm's length price to use the brand. No more, no less. That's all it's doing, people, paying the market rate to be able to put the name Starbucks above the door.

maillotjaune Wed 17-Oct-12 12:19:52

Flowery that's good that you take advantage of the tax rules to pay yourself a small salary, and then a dividend that is not subject to NIs. However, it is also not tax deductible for your company so it pays more CT as a result of you drawing dividends rather than salary.

These tax rules allow small business owners to pay a bit less tax which is fair compensation for the risk they are taking, the employment they are hopefully creating either now or in the future etc. I think very few people would think you should be paying more tax by drawing a salary and deducting PAYE.

However - small businesses like this are not like Starbucks et al. Large global companies do not need this kind of extra help. I'm sure you know all the things I have mentioned above but the majority of people in the UK know precious little about tax legislation and it does no one any favours to pretend that by closing loopholes that they take advantage of would be a problem for small business owners.

TheDoctrineOfSnatch Wed 17-Oct-12 12:20:21

The reason I said it wasn't sales is that LadyMuck is describing the independent as having high turnover but still no profit to speak of, so I took that at face value. Have no idea if there is a nearby Starbucks.

With regard to your other points, I know of a number of restaurant businesses of various size and it is very rare for a single outlet to make much if any profit because of the factors I have mentioned. Training courses might involve how to assess portion control, how to set up a mystery shopper programme to improve service etc.

idococktailshedoesbeer Wed 17-Oct-12 12:20:55

I'm in. Most villagers here use the lovely Deli which does proper coffee, instead of the three big chains on the high street. I'll do Costa or Caffe Nero if someone insists but not Starbucks, their coffee is awful. Tax revelations support my choice.

TheDoctrineOfSnatch Wed 17-Oct-12 12:21:58

...which would drive profit margin and repeat business respectively, as two examples.

CinnabarRed Wed 17-Oct-12 12:23:01

Actually, it gives HMRC a real headache if people try to pay more tax than they're legally obliged to pay.

Do you remember when Hazel Blears MP was criticised for 'switching' the addess she claimed was her principal private residence (PPR) for capital gains tax purposes?

The PPR legislation is explicitly designed to allow people to do just that. It's a tax break, with the non-tax policy aim of 'smoothing' the housing market (which most people will agree is a reasonable policy). So what Hazel Blears did was exactly within both the letter and the spirit of the PPR legislation.

Nevertheless, she felt obliged to write the cheque.

Last I heard, HMRC still haven't been able to cash it - there's nowhere for the money to go. It's not owed, it doesn't represent the payment of a tax liability. It's just a nothing.

CinnabarRed Wed 17-Oct-12 12:25:15

I know several hundred people who earn around £600k (partners in accountancy and law firms). Every single one of them pays his/her income tax. Their average effective tax rate is around 47%.

SkippyYourFriendEverTrue Wed 17-Oct-12 12:27:25

Well, if you just wrote HMRC a cheque for no reason that might cause them to scratch their heads.

But the idea that say being self-employed instead of running a limited company (and paying more tax because of the difference in structure) gives HMRC a headache is just wrong.

It is usually much simpler to operate in a tax-inefficient manner than a tax-efficient one, and obviously the most efficient possible structure will be very complicated indeed and can cost HMRC MILLIONS in legal and other costs.

It's disingenuous to imply that not avoiding tax is complicated.

CinnabarRed Wed 17-Oct-12 12:27:37

The reason their effective tax rates are lower than 50% is due to (i) pension contributions; (ii) charitable giving; and (iii) the [relatively small] effect of the personal allowance and lower rate bands.

SkippyYourFriendEverTrue Wed 17-Oct-12 12:28:58

I take it you are these people's accountant?

I will join you. Don't fancy my chances of pursuading my DH to join me, although I will give it my best shot.

flowery Wed 17-Oct-12 12:32:13

I don't know why I've involved myself in this debate, I don't even drink coffee! gringrin

And now I come to think of it, Starbucks don't even sell Diet Coke which I is what I do drink. What the hell, I'll boycott as well. grin

StarkAndDormyNight Wed 17-Oct-12 12:34:02

CinnabarRed thanks for the informative posts.

Why is the policy that means Starbucks don't pay tax in existence in the UK? What would happen if it was abolished?

It seems like a simple thing to close this loophole but I presume that would lead to a different can of worms.

Or perhaps the policy is simply to encourage employment to Britain?

CinnabarRed Wed 17-Oct-12 12:34:11

I have absolutely no issue with people (whether small businesses or global groups) structuring their businesses in a way that makes sense commercially.

There is, however, what I tend to call 'tax planning of choices'. If you have a choice between two courses of action, both of which are valid commercially, then it's sensible to choose the one which carries the lower tax burden.

Small business owners paying themselves dividends rather than salary fits squarely into that bracket, IMO.

So, in fact, does putting your centralised brand management functions into a low-tax jurisdiction rather than a high-tax jurisdiction.

I do have a massive issue with people entering into contrived tax avoidance schemes with no commerical basis. Those schemes for rich people where you sign a piece of paper and suddenly have a tax loss but no economic loss? Close them down. Challenge them in the courts. Change the legislation. You'll get my full support on that.

what cinnebarRed says.

come on people. use your noggins.

CinnabarRed Wed 17-Oct-12 12:35:37

I'm working off the information in the published accounts - profit per partner and average tax liability per partner.

CinnabarRed Wed 17-Oct-12 12:37:10

If I were their accountant I couldn't talk about their tax affairs because it would breach my client confidentiality obligations.

I'm not Starbucks' accountant or tax adviser either!

I'm a tax policy adviser to the UK government and several overseas governments too. I help them understand how tax policy affects taxpayer behaviour.

SkippyYourFriendEverTrue Wed 17-Oct-12 12:40:14

There are a multinational and there are some grounds for making the international payments. Whether the payments are excessive I don't know. But others such as McDonalds have similar (lower) payments and still pay UK CT.

Either way, I prefer to support a British business, since:

(a) it will benefit UK shareholders, pensioners, etc., and they will invest it in the British economy, not the US economy
(b) all the tax on profits is being paid in the UK rather than elsewhere
(c) the shareholders profit, dividends, etc. will result in further UK tax revenue (rather than US taxes)
(d) I am British I live in Britain, and we should support our own brands

Viviennemary Wed 17-Oct-12 12:40:51

Quite a number of years ago Ratners, a jewellery company got some very bad publicity. I think one of the Directors called it tat in an attempt to be funny. It rapidly went from being on every high street to going bankrupt. So never underestimate the power of the people to make a difference. Of course this was a different issue.

SkippyYourFriendEverTrue Wed 17-Oct-12 12:43:52

'Crap'

Although Ratners still exist in reality: en.wikipedia.org/wiki/Signet_Group, and they control a large part of the British jewellery market - H Samuel and Ernest Jones.

And truth be told, it's crapper than ever - there's more 9ct gold, more gold plating - a function of rising gold prices.

mommybunny Wed 17-Oct-12 12:48:58

idococktailshedoesbeer, which "tax revelations" are you referring to, that support your choice to boycott Starbucks? The revelations that they are in compliance with their UK tax obligations and have not depleted funds available to their shareholders by writing a cheque to HMRC for an amount some media pundit stuck his finger in the air and said they are "morally obliged" to pay, but which cheque HMRC would and could never cash?

Again, not trying to be snarky or patronising but I think the whole rationale for a boycott as discussed in the second paragraph of the OP makes absolutely no sense at all. (I can get behind the rationale in the third paragraph though. And boycotting a place because they don't sell Diet Coke is, in all seriousness, as sensible a boycott reason as ever I heard.)

SkippyYourFriendEverTrue Wed 17-Oct-12 12:51:27

Perhaps you could read the revelations mommybunny?

They are here: uk.reuters.com/article/2012/10/15/us-britain-starbucks-tax-idUKBRE89E0EX20121015

PosieParker Wed 17-Oct-12 12:56:40

I ONLY buy local where I can.

LittleMissFlustered Wed 17-Oct-12 12:57:01

Whittards often do a selection pack of syrups MrsRB

CinnabarRed Wed 17-Oct-12 12:59:25

OK. The BBC.

I heard a poor BBC accountant interviewed on the Today programme by, I think, John Humphreys, and I felt really sorry for him. He was thrown to the dogs.

I need to give you some background here, to put what happens into context.

Generally speaking, it's very easy to tell if someone is employed or not. A contract of employment is usually a give-away.... It's also often easy to tell if someone is self-employed. Working for a number of different customers, flexibility over working arrangements accepted, etc.

However some people who were in employment decided that they didn't want to be employees any more (and this started in the IT sector in the early '80's, I think for cultural reasons). They didn't want to work office hours, or wear a suit, or commute, or be answerable to their boss. So they decided to strike out on their own.

Incidentally, there were tax advantages to being self-employed too - you paid tax through your tax return after the year end, rather than PAYE in real time, and you had lower NICs. There were disadvantages too - no paid holiday, no sick pay, no pension. The individuals concerned decided that on balance they preferred to take the rough with the smooth of self-employment.

How did employers react? Mostly, they hired the individuals back as contractors rather than employees. On the whole they were happy because they could hire contractors for one-off projects or work that didn't need full-time devotion.

The problem came that these contractors blurred the lines between employee and self-employed. HMRC cared because of the PAYE/NIC point. A whole raft of tests were established by case law which described the 'hallmarks of employment'. There are around a dozen of them, and their presence or absence gives an idea about whether contractors were employees or not. They're hard to apply, in practice. It's fairly common to find that half a dozen apply but the rest don't - where does that leave the contractor?

So, to put the matter beyond doubt, employers started asking contractors to incorporate service companies, which the contractor owned 100%. The employer would sign a contract with the service company - which couldn't possibly be an employment contract, as a matter of tax and employment law - and the service company required its shareholder to fulfil the terms of the contract.

That's what was happening at the BBC and many other organisations, and continues to happen now. It wasn't tax driven, although there used to be tax advantages. But for most people they were the cherry on the cake. The motivating force was the drive to be self-employed.

However, HMRC thought that some contractors were taking the piss. They had a point. Some of the contractors only had one contract - with their former employer - which they'd been running for years, with a desk at the former employer's office, and a business card, and a phone line, etc ete.

So HMRC introduced legislation that has the effect of applying the PAYE/NIC code to service companies. It takes away almost all of the tax breaks associated with having a service company. The other pro's and cons still apply.

The BBC has said categorically that if a contractor wants to be an employee then s/he will be put in payroll. If the contractor wants to be self-employed then they'll have to have a service company to put their status beyond doubt.

CinnabarRed Wed 17-Oct-12 13:00:27

Macdonalds is a franchise - completely different business model.

CinnabarRed Wed 17-Oct-12 13:01:19

"Either way, I prefer to support a British business.". Fair enough. Perfectly reasonable choice.

CinnabarRed Wed 17-Oct-12 13:03:18

Genuine question though - why do you think it's wrong that a US company should pay US taxes on its US activities? I would have thought that was only fair.

Matsikula Wed 17-Oct-12 13:04:51

Would just like to point out that one of the reason Starbucks UK is now paying less tax is because (according to those well known loony lefties at Reuters) they are making royalty payments for their brands. In my experience brand valuation is a massive con as anyone whose job it is to value these things generally has a big interest in exaggerating the value.

What has happened in the last 3 years that suddenly makes the Starbucks brand massively more valuable in the UK?

Anyway, arguing that 'this is all fine because it's standard accounting practice' looks a bit feeble when you remeber that ten years ago we all thought the banks were fine because the auditors said so.

Tax law and accounting practices are not and should not be absolutely set in stone because every now and again companies do something that simply doesn't pass the stink test.

In this case, Starbucks are using their international status to avoid tax in a way that is simply not available or affordable to smaller competitors, and I think that gives me A pretty good reason to withold my (already very limited as I hate their bland coffee and soulless outlets) custom.

flowery Wed 17-Oct-12 13:08:34

I agree that supporting British businesses, local businesses and/or independent businesses are all good reasons for making purchasing decisions. My DH is a fan of doing this except when it comes to his seasonal gingerbread latte...

CinnabarRed Wed 17-Oct-12 13:10:32

I agree that it's difficult to value brands. But not impossible. Actually, comparison to successful franchises is one way it's done.

You're right that small independent coffee house couldn't move its brand to, say, Ireland (corporate tax rate of 12.5%). But, frankly, why would it want to? And does it have any brand value outside of its own town anyhow.

Tell you what, though, if you want to read about some brand transfer pricing that does look seriously weird, then tale a look at the ActionAid report into SABMiller. Yes, it makes perfect sense for a factory in Ghana to pay a royalty for the Grolsch name when Grolsch isn't sold in Ghana or manufactured in that factory.... hmm

SkippyYourFriendEverTrue Wed 17-Oct-12 13:18:01

"Genuine question though - why do you think it's wrong that a US company should pay US taxes on its US activities?"

We are talking about UK activities here.

I don't know why they do this, but their business is structured so that UK profits are taxed in the US and not here.

Whether overall tax paid is lower this way, whether it benefits US shareholders, or something else, I wouldn't like to say.

merrymouse Wed 17-Oct-12 13:28:41

I'm a little bit confused. I'm getting the impression that the people threatening to boycott Starbucks don't go there anyway...

SkippyYourFriendEverTrue Wed 17-Oct-12 13:29:41

grin

flowery Wed 17-Oct-12 13:31:01

"I'm a little bit confused. I'm getting the impression that the people threatening to boycott Starbucks don't go there anyway... "

This could break the record for the 'boycott' with the least impact! grin

ScrambledSmegsEvilTwin Wed 17-Oct-12 13:32:17

merrymouse - Yup! Although weirdly this thread has actually made me want to go there and buy a gingerbread latte, despite the fact that I really don't like their coffee!

merrymouse Wed 17-Oct-12 13:36:56

"Starbucks - remember that time 18 months ago when I was on your premises because my 4 year old was desperate for the loo and I bought a biscotti because I felt a bit guilty, but everything else was really expensive - well you will never see the likes of my custom again, so let that be a lesson to you!!!!"

SkippyYourFriendEverTrue Wed 17-Oct-12 13:38:22

Stick it to the man!

SkippyYourFriendEverTrue Wed 17-Oct-12 13:39:17

(has used their toilet without buying anything)

Matsikula Wed 17-Oct-12 13:43:21

Cinnabar, okay, my local very excellent coffee shop is not known outside South London, but there are some small national chains that I am sure would love to reduce their tax burden e.g. Konditor and Cook, Patisserie Valerie, um... Greggs, but can't.

I thought global businesses were supposed to bring some benefits to consumers, like lower prices or better quality or more choice, but Starbucks grew beyond that about ten years ago.

lowercase Wed 17-Oct-12 13:47:11

wont be going there again.

thanks for taking the time to post that OP.

Thank you for the syrup recipe storminabuttercup. Off to catch up now.

CinnabarRed Wed 17-Oct-12 14:01:29

grin at the MN reaction if Gregg's were avoiding taxes!

If profits are taxed in the US then the only benefit is to the US tax authorities - their corporation tax rate is around 35%, whereas ours is 24% and reducing to 22%. Which doesn't benefit shareholders, because profit after tax is reduced.

Much more likely is that profits are taxed in Ireland or Switzerland. Much lower tax rates.

Where we disagree is whether those profits should really be taxed in the UK or not. My view is that if there are real activities being done in, say, Ireland, then Ireland deserves some tax on those.

If group X is running its global marketing and advertising function out of Dublin - with the global head of marketing, and sales people reporting trends, and advertising people based there, and legal people to protect the registered IP - then I don't have an issue with that.

If group X claims that its brands are based in Ireland, but the global head of marketing is in the US, and all legal decisions on registering IP have to be referred to the US legal team, and no-one in sales reports anything in, and the UK company is allowed to plan its own marketing strategy for its local market - then Group X can take a hike.

TalkinPeace2 Wed 17-Oct-12 14:10:46

Does anybody know how much Corporation Tax is at stake?
as CT is the lowest earning of the taxes.

The tax paid by Starbucks to the UK economy in the form of VAT, ERS NI, Insurance premium tax, landfill tax, business rates will be quite substantial.

I would boycott them, but I've never been in one so its rather an empty gesture.

Want2bSupermum Wed 17-Oct-12 14:16:33

As an accountant I can confirm that there are a million and one reasons behind their net loss for UK operations. I have not looked at the books but I will say that the transfer pricing will have been approved by the authorities. Also, don't forget that Starbucks are paying other taxes such as business rates and VAT (which on GBP398 million of sales amounts to GBP79.6 million).

I think the whole tax system in the UK needs to be looked at because it is too onerous on society as a whole as it results in double taxation as well as an incentive to find loopholes rather than focusing on growing the business. Why not just charge a flat 15% corporation tax and be done?

Also, I find it funny that they are not starting inquiries into other companies who do exactly the same thing. Virgin, Barclays, Arcadia are companies that avoid taxes on a much grander scale than Starbucks. I will also hasten to add that Starbucks are a good employer compared to other retail companies.

FWIW I don't believe in buying coffee unless I absolutly have to. I can count the number of times I have bought coffee this year at a coffee chain on one hand. Starbucks have milk on the side and when we were stuck at Copenhagen airport all day the manager offered me full fat milk for free for our DD. Just think of how much better our finances would be if we saved GBP398 million a year. Our household debt levels would be much lower....

maillotjaune Wed 17-Oct-12 14:16:46

Talkin no idea on the amount of CT avoided but do remember it is the consumer that pays the VAT. Starbucks just collects it and if we didn't buy from then presumably someone else would be collecting that VAT on our purchases elsewhere.

Thank you littlemiss and all the others suggesting where I can get syrups from <rubs hands in glee>

I must admit I don't understand all this tax talk and am more confused than ever after readding this thread but I do go to local independant coffee places when possible and I do support small local shops too. I feel that's the best I can do in my situation smile

MeFour Wed 17-Oct-12 14:18:38

Is it possible to boycott something you never have?
Actually I may have once, it was either that or maybe it was costa. Either way I'm happy to carry on not going there

Matsikula Wed 17-Oct-12 14:19:40

But even if the whole marketing team lives in Ireland, if all the data they are using and all the space they are buying etc is British, then it's not genuinely an Irish operation, in my opinion.

Anyway, with Starbucks, I think their strength now is simple ubiquity, I reckon their property team delivers much more value than their brand team.

Personally I think amazon are the bigger concern, as they feed off other peoples' investment.

One of my husband's colleagues was really proud to tell him about an app you can get that lets you zap the barcode of any product you see, and it places it on your amazon account. So your local bookshop pays rent and chooses stock, and you treat it like a shop window for amazon. Nice.

Who said tax was boring, eh?

Rowanhart Wed 17-Oct-12 14:31:35

In. Complete losers.

nocluenoclueatall Wed 17-Oct-12 14:40:27

I boycotted them years ago (smug). Their "coffee" is undrinkable and their policy of swamping local markets to kill off independent traders is vile.

I'm not surprised their shirking tax too. Scumbags.

sailorsgal Wed 17-Oct-12 14:47:07

It won't be difficult to boycott them as the one in our town is closing for good tomorrow. grin

LaCiccolina Wed 17-Oct-12 14:54:55

Im boycotting. I think its disgusting the way they are syphoning off money on spreadsheets to Europe to claim they are down on profits here but proclaiming the UK to be a massive growth area for them!

Ill either go to Costa or make my own. On the plus side, Maccy D's have paid rather alot of money in tax! About £80m! So hurrah I can still ahve a big mac and fries when I feel like it. Nice to be able to be nice about that firm as well....

Dinglebert Wed 17-Oct-12 15:08:27

Bugger, I really like some of their drinks. Where else does wifi?

PedallingSquares Wed 17-Oct-12 15:18:05

So a load of MNetter's are going to boycott a coffee chain that they never go to anyway because said chain are following UK taxation policy correctly?

confused

TalkinPeace2 Wed 17-Oct-12 15:18:24

I must be really thick.

Why do people not wait 45 minutes till they have finished their errands and go home for a cup of coffee and save a fortune (and use their own wifi)?

And if you are working there, why not work at home, or in the library, or even in the office?
Why this obsession with opening your laptop or iPad in a public place with a dubiously secure network?

And frankly as their drinks are so incredibly calorie laden, unless your BMI is under 22 there is another reason not to go there....

Wheresmypopcorn Wed 17-Oct-12 15:21:15

Yanbu but I don't understand why Starbucks is so targeted all the time - there are a lot of companies that do things wrong. The impact companies like Apple are having on the environment is awful - cheers to them for creating an even bigger waste culture.

Bramshott Wed 17-Oct-12 15:21:50

Thanks for BBC explanation Cinnabar. So essentially it's not possible to be a freelancer and work for the BBC WITHOUT working through a service company - is that right?

Absy Wed 17-Oct-12 15:22:28

"So a load of MNetter's are going to boycott a coffee chain that they never go to anyway because said chain are following UK taxation policy correctly?"

Yip. Apparently so. Will possibly be the most shambolic/useless boycott in the history of boycotts.

CuriousMama Wed 17-Oct-12 15:24:01

I'm in although I don't go in them,Costa or any other shite overpriced coffee shops. Always use little ones. Would rather drink piss than line their pockets.

TalkinPeace2 Wed 17-Oct-12 15:27:54

Bramshott
as Cinnabar says, yes, service companies have been effectively compulsory in many sectors for many years
Computer contractors, media, all sorts
The main beneficiaries are the big organisations as they save a fortune in ERS NI, holiday pay, sick pay and compliance costs.

It is one of the most dysfunctional aspects of risk and reward that was originally encouraged by Gordon Brown with his 0% CT rate for small companies.

CinnabarRed Wed 17-Oct-12 15:28:40

Bramshott - I don't work for the BBC so I can't say with absolute certainty that you have to have a personal service company if you're a freelancer. I imagine there will be exceptions, particularly for very short term one-off contracts. But the chap on the radio definitely said that it's the BBC policy.

Merinda Wed 17-Oct-12 15:30:43

Great stuff. Do not see the numbers of Starbucks' customers decreasing substantially based on this thread. The "boycotters" do not patronise Starbucks anyway. Nice one.

And I agree with the posters above, they have done nothing illegal, so do not really see the point.

CinnabarRed Wed 17-Oct-12 15:33:03

I don't think it's necessarily fair to say that the big organisations are the main beneficiaries per se.

The freelancers themselves are the main beneficiaires in that they get to be self-employed which they presumably prefer to being employees - their own boss, flexible working times, able to make their own decisions, only answerable to themselves.

(If, on the other hand, the big organisations refuse to offer them employment contracts when they are in all but name employees then I agree with you.)

Viviennemary Wed 17-Oct-12 15:34:13

But they are more than a bit hypocritical. With all their fair trade coffee adverts. No word about avoiding paying any tax in the UK. Why don't they advertise that.

AdoraBell Chile Wed 17-Oct-12 15:35:38

I'm abroad, but I avoid Starbucks as much as possible already. Much prefer local coffee shops, not just for superior coffee. There's really no need to buy from them here, especially as I'm out of the ex -pat community now.

ohmeohmy Wed 17-Oct-12 15:37:37

I'm in

ICBINEG Wed 17-Oct-12 15:38:09

hmm well I agree totally with whoever said that if they genuinely weren't making a profit in the UK they wouldn't be selling coffee in the UK. The whole paying for the brand thing is an obvious tax avoidance move and I will certainly join the boycott.

And I actually go a lot so not an entirely empty gesture.

higgle Wed 17-Oct-12 15:38:17

Their coffee is vile anyway, so I promise not to go there again.

CinnabarRed Wed 17-Oct-12 15:40:21

"But they are more than a bit hypocritical. With all their fair trade coffee adverts. No word about avoiding paying any tax in the UK. Why don't they advertise that."

Because they don't avoid UK tax*. They are abiding by letter of the law, the spirit of the law and the policy inherent in the drafting of the law! What more can they do?

*or at least aren't doing so in respect of their transfer pricing/business model. I don't have knowledge of their other tax affairs so can't say categorically that they're not avoiding tax. But I could say the same about every other poster on this thread, so don't read too much into it.

TheDoctrineOfSnatch Wed 17-Oct-12 15:40:42

Oh c'mon Vivienne, who makes an advert about their tax policies?

MrsBucketxx Wed 17-Oct-12 15:40:46

surely we should be lobbying our mp's to change the taxation law.

not staying away from one company that is doing this many many more international companies doing the same.

boycotting yhem all would be a pita

CinnabarRed Wed 17-Oct-12 15:41:45

"if they genuinely weren't making a profit in the UK they wouldn't be selling coffee in the UK"

They would if they think that the recession is driving down business in a luxury good for now, but that it's worth trading through until the economic situation improves.

TalkinPeace2 Wed 17-Oct-12 15:44:05

The bit of taxation law that has recently changed and will make it worse - thank you Gideon (wallpaper) Osborne - is about controlled foreign companies and the ability to transfer price just about everything to the lowest taxed domicile

something that the IRS has not fallen for (yet - wait for a Romney win for that)

Mrsbucket
Boycotting all of them is not that much of a Pita, just a change in mindset...

I love the fact that there are NO Starbucks in Italy

So, if I've read this right, we've to boycott Starbucks because their coffee is shit?

edam Wed 17-Oct-12 15:45:10

nothing to stop us lobbying our MPs as well/as part of the campaign. But a boycott of Starbucks is attention-grabbing in a way that a letter to your MP is not.

Yadda yadda yadda to all this 'it's within the rules'. That's what the bankers said. The rules need changing when they allow wealthy corporations to escape paying their fair share, leaving ordinary taxpayers to pick up the bill. Fiddling the Libor rate was apparently 'within the rules'. Bringing down the world economy by playing silly beggars with the financial system was 'within the rules'. That is no excuse!

Viviennemary Wed 17-Oct-12 15:48:01

Ok TheDoctrineofSnatch. You've got a point! grin

MrsBucketxx Wed 17-Oct-12 15:49:22

its a fine line with these companies who employ thousands of people.

make it harder to trade and they bugger off leaving us in a worse state than we are now,

btw i dont drink bought coffee way to expensive.

MrsBucketxx Wed 17-Oct-12 15:50:46

they should scrap corperation tax altogether, support businesses, however big or small they are.

ICBINEG Wed 17-Oct-12 15:51:27

cin I just found an article stating that in 2011 (after the point they have apparently stopped making a profit in the UK:

"Starbucks coffee chain plans to create 5,000 UK jobs

Starbucks jobs plans add to the thousands of other new service sector jobs announced this week.The company intends to increase the number of drive-through coffee outlets, typically found at motorway service stations, from nine to 200. It also plans to open another 100 High Street coffee shops."

So in your considered opinion, it is normal to respond to a recession by opening 300 odd new outlets? In a country in which your business is not profitable?

3monkeys3 Wed 17-Oct-12 15:51:44

Not read everything. I try to support our local coffee shop, but it is impossible to take a pram in there (old burgage plot) and they only take cash, which I find is a huge frustration with many small businesses tbh. We have a Costa, which I go to quite a bit, they do gingerbread latte all year round! I stopped going to Starbucks when they started asking for my name and misheard it every single bloody time.

Illgetmycoat Wed 17-Oct-12 15:53:12

I do solemnly swear that I will NEVER eat or drink in Starbucks again. Tax-dodging bastards. Having said that, it's (successive) Governments we should be angry with too for not creating water-tight tax laws.

ICBINEG Wed 17-Oct-12 15:53:22

cin sorry I lost a ) and also the phrase "bullshit is it" off the end.

Noone opens 300 new outlets in a country in which they are not making a profit selling coffee.

So erm fuck em basically.

MrsBucketxx Wed 17-Oct-12 15:53:38

starbucks cant beat my local coffee houses cakes any way.

TalkinPeace2 Wed 17-Oct-12 15:59:18

edam
fiddling Libor was NOT within the rules. Prosecutions are ongoing and the American regulators are looking to Jail people (our Fundamentally Supine Authority will not)

CinnabarRed Wed 17-Oct-12 16:04:06

"So in your considered opinion, it is normal to respond to a recession by opening 300 odd new outlets? In a country in which your business is not profitable?"

Yes, if you honestly think that you'll start making profits again in the near future. Then, it's a sensible business strategy. For all we know, in 2011 their 5 year business plan might have forecast megabucks by the end of 2012.

I don't know whether their strategy has changed since.

It might just be that the UK board are shit at forecasting....

TalkinPeace2 Wed 17-Oct-12 16:05:04

grin

elizaregina Wed 17-Oct-12 16:06:41

I already do.

I have never ever ever understood people posting about how they were in or been to star bucks or whatever was so great about it?

I have already been supporting small independant places and try to in whatever I buy.

I am glad they have been outed as tax dodgers.

MrsBucketxx Wed 17-Oct-12 16:07:00

plus maybe the opening of new shops ate into any profit they had, with shopfitting business rates etc.

you cant say without seeing at least five years of figures.

CinnabarRed Wed 17-Oct-12 16:11:50

Actually, I totally get your frustration with the 'it's within the letter of the law' arguments.

Jimmy Carr was within the letter of the law. Didn't make it any less egregious.

The reason why I'm defending Starbucks is because I truly believe, based on 16 years of experience, that they haven't done anything wrong. Not morally, not ethically, not technically. All they're doing is operating a global business.

Someone said upthread that they were uncomfortable with the (hypothetical) idea of an Irish company managing a global brand, and buying advertising space in the UK, but not paying tax here. My view is that the person who should pay UK tax in that scenario is the person selling the advertising space. The Irish company is (hypothetically) also buying advertising space in Japan, and the US, and Germany, and South Africa - and all its activities are based in the UK. Why should the UK have primary taxing rights ahead of Ireland or any of the other jurisdictions? And why shouldn't the UK coffee seller pay for the benefit it receives in terms of improved brand recognition (and not having to pay for advertising space itself)?

Abitwobblynow Wed 17-Oct-12 16:16:34

Boycotted already.

You know girls, making a latte at home is so easy. Low fat milk in microwave and heat. Douwe Egberts (it MUST be Douwe Egberts) - 1/1/2 tspoon into an expresso cup pour a small measure of boiling water on. Add coffee to hot (but not boiling) milk.

Add vanilla sugar (a pod in a jar of sugar) to taste. Voila!

Graciescotland Wed 17-Oct-12 16:17:43

I will boycott are any of the chains UK based? I know it's lovely to support local and independent but it's rare to find one in an airport/ railway station/ service station when you are desperate for a vat of coffee.

littlebluechair Wed 17-Oct-12 16:21:11

I've boycotted Starbucks for years anyway, but I'm willing to add this to my list of reasons!

mommybunny Wed 17-Oct-12 16:21:58

So edam, if "it's within the rules" is not a defense to what you see as egregious conduct, where do you draw the line at what's permitted and what's not? At what's moral and what's not? How are companies meant to conduct their businesses if they are constantly at risk of predatory boycotts for acting within the rules?

Don't get me wrong - anyone is free to boycott any company for any reason they like, whether the reason is based on verifiable fact or fantasy. I just think this proposed boycott falls within the fantasy realm, and although I do not patronise Starbucks much myself, I don't think it's fair for a company legitimately conducting its affairs to be brought down because of a vague conception (whipped up by a clueless media) that "they don't pay enough tax". It smacks of envy, pure and simple.

Toombs Wed 17-Oct-12 16:25:12

I hope you're all happy to put at risk the jobs of those who work there then. My moral compass has determined that driving at over 30MPH is immoral and therefore I'm going to pursue a campaign against anyone who does, that it's completely legal where permitted is irrelevant to me.

CinnabarRed Wed 17-Oct-12 16:26:13

Greene King. Now, in my considered view, they really are tax dodgers.

Let me tell you what they did.

Greene King PLC loaned cash to its UK subsidiary, Greene King Acquisitions Limited. The loan was structured in a really contrived way and involved preference shares and assigning the right to receive interest (which I can explain if you'd like but is quite complicated). The whole point was for GKA to be allowed a tax deduction for its interest expense but for PLC not be taxed on the interest income.

HMRC have taken them to court. PLC and GKA admitted before the court that this was a 'marketed' tax scheme that a promoter (Ernst & Young) had brought to them purely to save UK tax, and that E&Y's fee would be based on the tax saving that Greene King achieved.

HMRC has won the first round. It demonstrated to the court's satisfaction that the accounting treatment adopted by Greene King was not in accordance with UK or international accounting standards, and that the technical analysis of the tax legislation was flawed.

Amusingly, the outcome of Greene King losing is that the interest income is taxable for PLC but the interest expense is not deductible for GKA.

(Greene King may appeal, of course. There's no saying whether they would win any appeal.)

CinnabarRed Wed 17-Oct-12 16:28:22

The courts will go out of their way to strike down tax avoidance cases, if they possibly can.

Illgetmycoat Wed 17-Oct-12 16:28:47

Mommy Their behaviour has been morally (not legally) wrong. As the famous quote goes, the Law is an ass. If the Government has not got the gumption to close the tax loopholes, then the only pressure that we, as consumers, can bring to bear is financial by withdrawing our custom.

TalkinPeace2 Wed 17-Oct-12 16:31:01

Cinnabar
On the UKBF and elsewhere I've argued that transactions without commercial (as against financial purpose) should all be disallowed for tax.
That would rule out leveraged buyouts, and sale and leaseback of assets (which is what brought down Southern Cross of course)
let alone all of the contrived cross border financing.

And it REALLY is about time that the partners at the big firms who come up with these are named and shamed to face the wrath of their institutes.

CinnabarRed Wed 17-Oct-12 16:31:16

Here's the ActionAid report into SABMiller.

www.actionaid.org.uk/doc_lib/calling_time_on_tax_avoidance.pdf

TheDoctrineOfSnatch Wed 17-Oct-12 16:36:32

So essentially if the question is "we need to put this thing - brand , IP, whatever SOMEWHERE, and we have a choice of countries where we operate commercially, where would be both commercially sound and get the lowest tax rate?" then you are ok with it cinnabar.

But if it is "how can we use this tax structure to make a saving" that has no commercial justification as well then you aren't?

<oversimplifies massively>

CinnabarRed Wed 17-Oct-12 16:37:17

I'm amazed that the big accountancy firms haven't had more flak TBH.

Re leveraged buy-outs, most countries have put limits on the tax deductions that can be claimed for interest payments. For some reason the UK hasn't yet - it seems to be an article of faith for government policy makers that they have to give full interest relief or the UK will become uncompetitive. I don't agree but then at the moment I'm a lone voice in the wilderness.

Sale and leaseback transactions can be entirely commerically driven (i.e. when a business needs to find finance quickly) or can be pure tax avoidance. Most are somewhere in the middle. In my experience HMRC are pretty good at identifying which are which, and closing down the loopholes that allow the avoidance ideas to operate.

threesocksonathreeleggedwitch Wed 17-Oct-12 16:37:21

I'm in
(never been in one anyway)

CinnabarRed Wed 17-Oct-12 16:38:35

TheDoctrineOfSnatch - yes, that's a reasonable summary of my position.

fionathepink Wed 17-Oct-12 16:40:26

I boycott it anyway because they charge extra for soya milk when it is not an 'extra' but an alternative that costs no more than moo milk.

CinnabarRed Wed 17-Oct-12 16:41:50

My one exception, actually, is stamp duty land tax. Every single transaction has a commercial purpose - to buy/sell property. But some of the planning is completely outrageous.

mommybunny Wed 17-Oct-12 16:44:40

Illgetmycoat - exactly how does your withdrawing custom from Starbucks get the government to change its policy? It sure as hell won't do anything to change Starbucks' behaviour, except potentially to force it out of business and put thousands out of work because the boycott hit it so hard that custom completely dried up. There is no way a publicly traded company is going to voluntarily hand over millions of pounds to HMRC based on some extremely loosely defined "moral obligation" to "pay their fair share of tax", when their accounting procedures that calculate their tax liability are already followed scrupulously within the law (and I have yet to see anyone argue otherwise). Their shareholders would sue them, and win.

maillotjaune Wed 17-Oct-12 16:56:48

Talkinpeace it is already an ethical requirement for Chartered Accountants, for example, that fees are not based on tax savings etc. But from Cin's post upthread there are examples of partners doing just this.

Just as HMRC do not appear to be on top of tax avoidance where there might be actions that are questionable, the regulators are also struggling to keep up.

moresleepsoonplease Wed 17-Oct-12 17:01:39

Boycotting as well. There are plenty of other places to get a coffee.

Illgetmycoat Wed 17-Oct-12 17:06:45

Mommybunny Your logic is faulty. The customers and income they bring don't just disappear, they move their custom to other, less immoral companies, creating higher profits and new jobs within those. How can that be a bad thing? I would also strongly argue that, in the absence of possible legal action, the ONLY pressure that a company of that scale responds to is financial.

We all know that they have acted within the Law (indeed it is their legal obligation to their shareholders to maximise profits). That is what is so shocking about the whole thing.

Toombs Wed 17-Oct-12 17:15:28

How much over the legal minimum have all of you paid to the taxman (on ethical grounds)? If the answer is nothing why do you demand it of others?

Latara Wed 17-Oct-12 17:17:55

I should but i cannot. I am on my way there now, sorry.... sad

(The best looking men go there after the gym - is that a good enough excuse not to boycott? Ok & i do like the evil non-taxpaying scum's coffee. Plus i'm mates with a couple of the girls who work there... )

PickledFanjoCat Wed 17-Oct-12 17:20:58

I haven't paid anything in ethical grounds, alas I cannot afford a team of specialist accountants to avoid paying any at all.

Unfair comparison.

CinnabarRed Wed 17-Oct-12 17:24:01

When DH and I bought our house, our solicitor offered to introduce us to some accountants who could save us £30k in stamp duty. We declined.

Toombs Wed 17-Oct-12 17:24:13

I didn't ask you to avoid, I asked how much more than you were required to pay you paid. You are all demanding this from Starbucks.

Latara Wed 17-Oct-12 17:25:56

Shit. It's thundering & i'm not walking anywhere in a thunderstorm.
Fine. This afternoon Starbucks and everywhere else is boycotted.

Hullygully Wed 17-Oct-12 17:29:02

What about people who steal stationery from work eh?

spottyock Wed 17-Oct-12 17:29:45

I'm in. Damn the exposé just before the Christmas lattes arrive. It's a huge sacrifice I tell you.

PickledFanjoCat Wed 17-Oct-12 17:31:04

Stealing stationary from Starbucks might be the way to go.

MaryZed Wed 17-Oct-12 17:31:31

Can I just thank Cinnabar for giving me a much better understanding of all this, and congratulate her on not losing her rag or getting frustrated by the many who have obviously read the op and not the rest.

Thank you thanks

Hullygully Wed 17-Oct-12 17:33:12

I don't think anyone should pay tax

Toombs Wed 17-Oct-12 17:33:14

Hullygully. It's theft, even worse it's theft employee, grounds for instant dismissal. You can't be advocating that theft is right and being completely compliant with the law is wrong.

Hullygully Wed 17-Oct-12 17:34:05

Stealing is stealing whether it's tax money or loopholes in the Caymans or paperclips.

Toombs Wed 17-Oct-12 17:37:48

They are not stealing, there is no liability for them to pay any tax more than they have. How much extra tax do you pay, voluntarily?

PickledFanjoCat Wed 17-Oct-12 17:38:38

Stealing a loophole is a right pain in the arse.

Hullygully Wed 17-Oct-12 17:39:32

I don't pay any tax, I am registered on Grand Cayman. BUT I don't sell expensive coffee either and keep all the profit.

PedallingSquares Wed 17-Oct-12 17:41:25

What MaryZed said

Thanks Cinnabar

CinnabarRed Wed 17-Oct-12 17:42:16

Our local Starbucks closed last winter and was replaced by a Costa.

Luff you, MaryZed.

Hullygully Wed 17-Oct-12 17:42:26

Why is everyone thanking Cinnabar?

She is CONDONING their malpractice and evil theft????

CinnabarRed Wed 17-Oct-12 17:44:12

Not paying tax which is lawfully due = evasion = illegal.

Definitely not what Starbucks, or even Greene King, have done.

MaryZed Wed 17-Oct-12 17:47:16

Don't you even pay tax on the goat Hully? I simply don't believe you shock

disclaimer: I am showing that I have a SOH and have RTFT

I hate Costa. They serve coffee in soupbowls, and forget to put enough coffee in.

PedallingSquares Wed 17-Oct-12 17:47:18

Looking forward to a choice of seats in Starbucks though wink

MaryZed Wed 17-Oct-12 17:48:09

We have BBs Coffee and Muffins here.

They sell lovely muffins and have a loyalty card where every fifth coffee is free.

I wonder do they pay tax on the free ones?

Taffeta Wed 17-Oct-12 17:48:14

Starbucks Coffee tastes of wee. End of.

Tressy Wed 17-Oct-12 17:53:45

Yes, I will think twice before I buy a coffee off them. Profits made in the UK from UK customers should have full UK tax paid on it. IMO. I hope HMRC are successful in closing these legal loopholes, soon.

ForgivenessIsDivine Wed 17-Oct-12 17:54:41

Starbucks are far from the only ones. If we emptied our shopping trolleys of goods that are produced by companies with headquarter profits in low tax locations and minimal tax liabilities in higher ones including the UK, our trolleys would be very empty indeed.

It is slightly disingenuous to say that it is anything less than a deliberate choice on the part of the company to ensure profits are minimised in high tax locations and maximised in low tax locations, though it is perfectly within the rules.

Toombs Wed 17-Oct-12 17:58:09

HMRC can't close loopholes, only Parliament can. Tax legislation is unnecessarily complex and with complexity you get complication, simplify it. The current tax policy was formulated by the last Labour government, one can only presume that this is what they intended.

MaryZed Wed 17-Oct-12 17:59:45

<sigh>

Read the thread people, read the fucking thread.

legoballoon Wed 17-Oct-12 18:09:11

Interesting debate going on.

As naive and fantasist as some might think a boycott might be, as one of the small people in this country, who feels like they chuck away their vote every time there is an election (because although I do vote, many of the politicians - of all parties - seem to cosy up to big business with one eye on their post-cabinet careers); who pays all the tax on their earnings and hasn't the option of paying myself a salary and complement that income with dividends or purchases made through my company; who has been told repeatedly "we're in this together" although I see vast disparity between the people of this country -- well, I, for one, just want to feel like I could do a small thing to express my disdain for the perfectly legal tax avoidance strategies of a big company.

And yes, I totally agree that it's MPs that need to pursue this matter and HMRC that need to get their acts together, but I've written to my MP about other matters before, and get fobbed off with letters that suggest he has barely registered the subject matter, let alone be prepared to do something about it.

And if anyone cares to join me, then all the better. Vote with your wallets, it's the only language that gets people listening.

MaryZed Wed 17-Oct-12 18:11:20

So is it just Starbucks you are boycotting?

Surely you should boycott every company that produces goods or pays tax outside the UK.

Which might leave your shopping trolley a bit empty.

Labootin Wed 17-Oct-12 18:12:18

I regularly drink lattes at Starbucks in Dubai

I am filth personified.

FromEsme Wed 17-Oct-12 18:13:34

Am boycotting too.

MaryZed yeah, it would be hard. Doesn't mean you can't try though, does it?

MaryZed Wed 17-Oct-12 18:15:25

But why pick on Starbucks?

I genuinely don't understand. It seems a tad bandwagon-hopping to me.

FromEsme Wed 17-Oct-12 18:16:55

A lot of people boycott a lot of different companies.

A lot of companies avoid tax. But they have paid NOTHING.

googlyeyes Wed 17-Oct-12 18:20:25

Yeah but it's interesting that no-one is willing keen to boycott Amazon, for example.

Starbucks is the one it's convenient to avoid, that's all. If you really felt strongly about the issue on principle you would wouldn't feel able to give Amazon your custom either, no matter how handy it was for Xmas shopping sprees

FromEsme Wed 17-Oct-12 18:21:13

Well I don't buy from amazon either. Or go on xmas shopping sprees.

So can I polish my halo?

PickledFanjoCat Wed 17-Oct-12 18:24:11

I don't get this that people have to boycott all companies.

It might not be fair to single out Starbucks but that's life.

EugenesAxe Wed 17-Oct-12 18:25:31

Not at all. Their coffee is shite.

Tressy Wed 17-Oct-12 18:28:21

This thread is about the news that Starbucks are avoiding tax. I'm happy for all the other companies that are following suit to be named and shamed and taken to task.

I don't go into Starbucks often, maybe been in once or twice, isn't it them that have horrible coffee. So no skin of my nose. I prefer the coffee and muffin shop.

BollocksToKarma Wed 17-Oct-12 18:29:53

I'm in.

PickledFanjoCat Wed 17-Oct-12 18:30:37

Fair dos but practically as other people have pointed out it's pretty hard to boycott all of them.

However if your local town has a Starbucks and an alternative coffee provider that you find more ethical fair enough.

Amazon avoidance is no bad thing. But it's more of a toughy.

MaryZed Wed 17-Oct-12 18:30:40

But Tressy, if you read the thread, they aren't avoiding tax [baffled]

Latara Wed 17-Oct-12 18:34:43

Main issue for me is that a boycott would affect the low paid workers in Starbucks.

At my local Starbucks the women (& 1 man) work hard, long hours, full time, yes at low pay but the fact is that similar semi-skilled or low-skilled jobs are hard to get round here.

The workers should not suffer from a boycott; it's not fair on them.

Illgetmycoat Wed 17-Oct-12 18:35:43

Mary Zed - that's a great idea! I'm starting with Starbucks, Amazon and Facebook.

We need a website to name the companies that DON'T dodge tax, so we can move our custom to them. It can't be much harder than just sticking to organic, non-genetically modified, responsibly-sourced, ethical free range food in the super markets.

Floggingmolly Wed 17-Oct-12 18:39:07

I'm in. (Did this 3 years ago, actually)

MrsReiver Wed 17-Oct-12 18:40:44

Ooh, I might actually get a seat in Starbucks in future!

Tressy Wed 17-Oct-12 18:41:49

But MaryZed not every multi national company are using these methods and are paying taxation fairly. Tell me if I'm wrong.

Toombs Wed 17-Oct-12 18:45:10

Illgetmycoat, great, we can put Starbucks on your list because they are not dodging any tax.

Rosieres Wed 17-Oct-12 18:46:58

Latara - but if you still drink coffee, just in another shop, then the net effect on local employment will be neutral. If Starbucks trade is down, trade in other places will be up.

And, if the other places pay tax, then this helps the economy by keeping public services going.

GoldenPeppermintCreams Wed 17-Oct-12 18:53:10

storminabuttercup Thank you for the recipe!

I've made of the syrup, and am now having it with a home made latte. (Instant coffee and hot milk) It's very yummy, and I'm now going to get very fat.

October1st Wed 17-Oct-12 19:18:11

My gym and the day centre my dh works in and ds attends sell Starbucks so will not be boycotting as both cafes help our local economy

MrsBucketxx Wed 17-Oct-12 19:33:59

legoballon are you suggesting yhat all companies do away with dividends or tax breaks then, this would cripple thousands of small businesses, who just about keep their heads above water by claiming such benefits.

MaryZed Wed 17-Oct-12 19:41:40

Illgetmycoat, I'll follow you in all of that the second I win the lottery!

Tressy, Starbucks are paying taxation fairly. That is the whole point. They are paying tax exactly within the guidelines.

TheMightyMojoceratops Wed 17-Oct-12 20:02:23

storminabuttercup That syrup is good, thanks for the recipe!

Latara Wed 17-Oct-12 20:13:47

Rosieres - but 2 of the women who work at my local Starbucks are in their 50s; it's very stressful to have to leave your job, go to interviews then maybe get another job & start all over again at any age; let alone in your 50s i'd think.
Why should they suffer just to make the rest of us feel better?

I hate tax evasion but i don't agree with a boycott that will have an adverse effect on people who i'm friends with who have hard enough lives as it is.

Toombs Wed 17-Oct-12 20:29:30

There's no evasion or avoidance, they do not have any liability for tax over and above what they have already paid. Why is this so difficult to grasp?

Matsikula Wed 17-Oct-12 20:52:28

Tooms, yes HMRC seem satisfied with them, but there do seem to be some quite legitimate questions being asked e.g. Why is the wholly owned Starbucks UK paying more for the brand than is typical with a franchised business?

And yes, all companies minimise tax to a certain extent, but it is perfectly intellectually respectable to take the view that a particular companany takes it too far, and to choose to withdraw your custom.

i'd be prepared to bet that this little bit of a media kicking has a miraculous effect on Starbuck's UK profits next year.

Toombs Wed 17-Oct-12 21:01:17

Let's hope it doesn't cause any of their staff any financial difficulty, that this wave of self-righteousness doesn't cause any shifts to be cancelled or posts lost just because some have decided that their opinion is more important that the law.

Matsikula Wed 17-Oct-12 21:23:45

I suspect that the only people losing jobs over this will be their financial PR agency.

TalkinPeace2 Wed 17-Oct-12 21:39:33

Matsikula
sorry but the furore being caused is NOT legitimate.
Starbucks are obeying the law.
The law is an ass, not Starbucks.

If you REALLY want to do something about it, start hassling the ICAEW and the ACCA and ICAS to name and discipline their members who promote the tax minimisation schemes in the UK and the USA

(is glad I'm no longer a member of the ACCA)

And write to your MP to demand that Gideon Wallpaper Osborne changes the law to limit artificial transactions and offshore profit allocations.
And stop the heads of HMRC following Dave Hartnett's fine example
www.youtube.com/watch?v=3w4tcIsaInE

Want2bSupermum Wed 17-Oct-12 21:49:34

Matsikula Starbucks is not a franchise so you can't compare the costs faced by Starbucks compared to a franchise such as McDonalds. I would also say that it is reasonable to assume that Starbucks spends an awful lot more on brand placement, management etc than other companies - this is why they are able to generage similiar sales to Costa with 600 stores compared to Costa's 1300+.

I will also say that Starbucks is a good employer and they should be supported, not boycotted. If you want them to pay corporation tax then expenses will need to be reduced. The first expense to be cut is always wages. I have friends who used to work for Starbucks and they paid more than minimum wage, gave them flexible shifts around their studies and money towards tuition fees (Master program and they paid GBP5000 towards the fees). I don't know of other coffee shops or retailers who treat their employees as well.

ivykaty44 Wed 17-Oct-12 22:11:54

How many of you don't claim your child benefit as you have enough money in your monthly salary? Surely it is unethical to take extra money in benefit when you don't actually need it and is the same as stealing money from the government in the same way as people not paying tax as they don't need to legally?

FromEsme Wed 17-Oct-12 22:13:27

Little bit of a completely fucking different issue ivykate

ivykaty44 Wed 17-Oct-12 22:16:37

Morally - no if you earn 39 k and take child benefit then complain about a company not paying tax as they don't legally need to - no not fucking different fromesme

PickledFanjoCat Wed 17-Oct-12 22:18:44

It is totally different ivy. Seeing as the government dish it out maybe you should take it up with them.

ivykaty44 Wed 17-Oct-12 22:20:05

seeing as the government have set the tax laws and starbucks don't have to pay the tax - then why not take it up with the government next time you vote?

PickledFanjoCat Wed 17-Oct-12 22:23:31

It's a different and far more complex issue corporation tax. If the government don't want to pay child benefit they can just switch it off. Which they are trying.

Plus it's an individual getting 80 per month not a multi national corporate entity.

Not that you really know my point of view or voting inclinations just pointing out its not the same thing.

Not sure why benefits need to start getting dragged in.

Saying your not entitled to find company's accounting questionable if you get child benefits is bunkum.

ivykaty44 Wed 17-Oct-12 22:27:44

The sums are irrelevant, if you want a large company to pay voluntary tax then you surely must be prepared to do so on a small percentage scale yourself.

Toombs Wed 17-Oct-12 22:28:24

ivykatyt44, not paying tax when you don't need to is not a crime.

ivykaty44 Wed 17-Oct-12 22:31:26

toombs I agree

So do starbucks owe money to in unpaid tax?

SinisterBuggyMonth Wed 17-Oct-12 22:33:06

I'm in boycot-wise

Hillarious comments now though from those arselicking defending Starbucks.

MrsBucketxx Wed 17-Oct-12 22:36:48

they dont, they have used a loophole to get around it. thats the point.

Caladria Wed 17-Oct-12 22:37:14

Caveat - I know nothing at all about Starbucks' finances or about whether they pay enough tax.

This, however I do know: If you want to avoid paying corporation tax the first, second and last thing you do is find ways of making profits disappear. There are lots of ways of doing this. (If you're a multinational you might, for example, saddle a subsidiary in a high tax country with a massive loan to pay to a subsidiary in a low tax company). So to say that [x company] have low profits and so aren't engaging in tax avoidance is to get the causation the wrong way round - it's possible that the low profits ARE the tax avoidance strategy.

MrsBucketxx Wed 17-Oct-12 22:38:36

sinister its more about supporting business, and not putting people out of work.

ivykaty44 Wed 17-Oct-12 22:40:21

and are you going to boycot all the other large companies and nay small companies that don't pay tax that they don't legally have to pay, Philip green has enginered his life so his wife is in pole position and he doesn't have such a large tax bill - so will top shop, burtons and the rest of the shops in the acadia group go on the list?

If you don't like how it is set up then vote for a way that you do like but expect your own income tax to go up as well

Toombs Wed 17-Oct-12 22:41:18

They haven't used a loophole, they've obeyed the law. The fact that it is the law that is at fault seems to be escaping people. Tax law is over complicated and therefore not simple to understand. Our legislators pass the law that they want, if it's full of holes it's not Starbucks fault. If you found a loophole that said that you didn't need to pay any tax and could keep all your money - would you?

MrsBucketxx Wed 17-Oct-12 22:44:58

i run my own business so i claim my fair share, this is what most people would class as avoidence but im not breaking any laws.

MrsBucketxx Wed 17-Oct-12 22:45:24

so yes i would.

PickledFanjoCat Wed 17-Oct-12 22:47:10

So your saying anyone accepting child benefit isn't entitled to an opinion without forgoing it? Really? Really?

PickledFanjoCat Wed 17-Oct-12 22:49:33

It's always going to be the same. Legislation isn't perfect is it and the second legislation comes people more intelligent than I are looking for the most favourable way to exploit it.

edam Wed 17-Oct-12 22:54:54

starbucks are paying less than 1% tax on their UK operations. That is clearly wrong. It may well be legal but it isn't right.

I bet the people on this thread who are justifying it by saying oh, it's legal, and oh, companies are just being efficient wouldn't be half so permissive if it were benefits claimants exploiting the system to the tune of billions of pounds.

Viviennemary Wed 17-Oct-12 22:57:37

But they are deliberately manipulating things even if they are within the law. That's my opinion from what I've read. Which isn't that much I must admit.

Toombs Wed 17-Oct-12 23:00:33

Lots of people have ideas about what is right or not, from educating girls to gun ownership. What we don't do is listen to them. We have law, it doesn't matter what you believe - you obey the law, girls will be educated in this country whether you like it or not. Starbuck have also obeyed the law, you may not think it right but it does not make you right. I shudder to think how many people would have been strung up under lamposts if we were allowed to place our beliefs over the law.

PickledFanjoCat Wed 17-Oct-12 23:02:54

Its perfectly reasonable if people find the way Starbucks handle their affairs in a way that they find distasteful to go elsewhere for their daily coffee toombs.

Because that's what people are talking about. I have yet to hear talk of a lunch mob.

PickledFanjoCat Wed 17-Oct-12 23:04:31

Lynch mob! Or maybe lunch mob is more appropriate.

You do keep repeating yourself regarding this but I'm quite sure people are aware they are acting within the remit of the law.

It's become quite the thing to expose the tax affairs of celebrities or companies and I'm sure we are all aware it's rife.

edam Wed 17-Oct-12 23:09:13

Toombs - you are wrong. In a democracy it does actually matter what people think. Laws, policies and regulations change all the time. The laws, rules and regulations on corporate tax avoidance need to change as well.

MorrisZapp Wed 17-Oct-12 23:10:07

I won't boycott. Starbucks are the only reliable providers of decaf coffee. Everywhere else, you risk staring at the ceiling all night.

They're hugely successful because they provide what many, many people want from a coffee shop.

TimothyTumblespring Wed 17-Oct-12 23:11:14

I won't boycott because I work for them blush

And if everyone else boycotts I won't have a job anymore sad

Toombs Wed 17-Oct-12 23:11:49

I don't care what people do, if you find something distasteful by all means stop doing it. What though if the thing you find distasteful is quite normal and legal, are you entitled to force your views on the reluctant? Shall we make all women wear a burkha because a minority want it? Shall we say that lawful behaviour is in our view distasteful and therefore take action against it? Where does it end, when will a protest against something we find distasteful turn into something else?

We have laws, this one may be flawed but whilst it is extant it is the supreme authority, it has been obeyed by Starbucks, they have done nothing wrong.

PickledFanjoCat Wed 17-Oct-12 23:11:56

They won't & you will. Ultimately it's a storm in a coffee cup innit.

Illgetmycoat Wed 17-Oct-12 23:13:57

Timothy Tumblesprings take your skills to Costa! They pay better and will be picking up new customers as we speak.

edam Wed 17-Oct-12 23:15:50

Toombs - they have (presumably) done nothing illegal. That is not the same as doing nothing wrong.

TimothyTumblespring Wed 17-Oct-12 23:16:06

Illgetmycoat there is no way I could ever go to work for Costa, a chain of coffee shops owned and operated by a brewery?

And they are, like, the AntiChrist or something. <brainwashed emoticon>

Brandnewbrighttomorrow Wed 17-Oct-12 23:17:15

I'm boycotting HMRC grin

PickledFanjoCat Wed 17-Oct-12 23:17:47

There is a difference between following the letter or spirit of a law.

People with clever lawyers get off lots of things.

Your comparisons with respect are a little hysterical. Hanging from lamp posts, everyone in burkas!

Ultimately of course companies are going to try and pay as little tax as possible to appease shareholders. However of the details come out and people feel they have gone too far, there will be a bit of adverse public opinion. Not everyone will agree if course.

I'm beginning to wonder if you are their tax as advise toombs?

Toombs Wed 17-Oct-12 23:19:19

Edam, I'm sure you and I have differences about what is right or wrong. It matters not that I think that FGM is right (for example), in this country it is illegal. You may have any opinion you like but you cannot say that you are right.

Illgetmycoat Wed 17-Oct-12 23:20:09

I am gobsmacked by the number of people who think that because the Law says it is ok, we shouldn't apply our moral judgement.

Anyone heard of Hillsborough for goodness sake? The Law is often wrong. If you think that the Law is always right and dictates morality, you're bonkers. It's a blunt instrument manipulated by those who can afford and know how to use it.

Toombs Wed 17-Oct-12 23:24:01

PickledFanjoCat, People don't "get off", they are not liable. You can't be done for speeding on a motorway at 70 MPH. The argument being advanced is that you should be able to be done, that 70 MPH is too fast and that all right minded people should agree. No offence has been committed.

Caladria Wed 17-Oct-12 23:24:04

The tax system is complicated, but it's not because HMRC are evil. It's partly because governments try to do clever things with it to help people out: tax breaks for films to help the movie industry, taper relief on capital gains tax to encourage long-term investment, mortgage tax relief, no VAT on children's clothes, that sort of thing) and partly because tax lawyers make millions by ferreting out loopholes, then the government closes the loophole, but in closing it creates another loophole, and the dance goes on.

edam Wed 17-Oct-12 23:24:28

Toombs - I'm objecting to the claim that Starbucks Is Right. 'Legal' is not the same as 'right' and the law is very far from fixed.

You can't destroy my argument by saying 'you aren't right'. I never claimed to be right. I objected to the claim that because Starbucks are operating within the law, everything is fine and dandy and there's nothing to discuss.

TheDoctrineOfSnatch Wed 17-Oct-12 23:26:16

YY caladria.

Toombs Wed 17-Oct-12 23:27:01

Illgetmycoat. To what should we apply our moral judgement? If I have some mad belief am I entitled to use my moral judgement to enforce it, shall I force FGM on my daughters because I am right? Should my moral judgement overrule the law?

PickledFanjoCat Wed 17-Oct-12 23:27:12

My uncle got pissed up and drove his car.

The solicitor got him off on a small error made when booking him in.

He was pissed. He drove his car. He got off. It's technically illegal.

That's getting off toombs.

PickledFanjoCat Wed 17-Oct-12 23:27:52

Toombs, your arguments are getting ever more ridiculous and I can't even bother answering anymore!
confused

Toombs Wed 17-Oct-12 23:28:45

edam, being right is subjective. It's why we have laws. No ones "right" overrides it however much you think it is wrong.

PickledFanjoCat Wed 17-Oct-12 23:29:15

Oo I think shooting men is ok, I'll just pop and grab my Uzi.

Toombs Wed 17-Oct-12 23:33:52

^My uncle got pissed up and drove his car.
The solicitor got him off on a small error made when booking him in.
He was pissed. He drove his car. He got off. It's technically illegal.
That's getting off toombs.^

Sure is, the essential difference is that your uncle had driven pissed which is an offence, he was successfully defended in court. Starbucks have not committed any offence, we are not in court.

Illgetmycoat Wed 17-Oct-12 23:34:12

Errmm. Toombs you compare performing Female Genital Mutilation on your daughters to not having coffee at Starbucks? It seems sick to even think of that analogy.

And as far as the Law goes, yes, there will be a moral sway in public opinion and a law is passed to reflect that. A Law doesn't pop out of the ether and then people say 'yes, that was a good idea in hindsight'.

Toombs Wed 17-Oct-12 23:37:41

No, I'm saying that my morality however mad (or not) should have no bearing on the law, I could regard FGM or walking on the cracks in the pavement as highly desirable. In this country we look to the law, not personal beliefs.

edam Wed 17-Oct-12 23:38:54

Toombs, you don't seem to grasp the point that people are actually allowed to debate the rights and wrongs of corporate tax avoidance. The discussion isn't brought to a shuddering halt as soon as anyone says 'ooh, you do know this is legal'.

It's perfectly legal, as it happens, for drugs companies to hide information about serious - even fatal - side effects from the regulators and from doctors. It's not right. It's extremely dangerous. People have died as a result - but because the legal system in this country is flawed, the families of victims in the UK have been unable to hold the companies concerned to account. (Unlike families in the US who are at least able to bring legal actions.)

The more people become aware of that, or become aware of corporate tax avoidance, the better. Perhaps it will create some change, so we can all have safer medicines, or a more efficient and fairer distribution of taxes.

Illgetmycoat Wed 17-Oct-12 23:39:09

Toombs I suspect you are drunk. I'm not wasting any more time.

PickledFanjoCat Wed 17-Oct-12 23:40:02

I can take no more. I can not.

Toombs Wed 17-Oct-12 23:43:18

edam, you have hit the nub of the matter. It is the law that is flawed. It is not Starbucks fault that we have hugely complicated tax law, nor that they found a way to minimised their liability. It is Parliaments fault for passing bad legislation.

Anste Wed 17-Oct-12 23:48:48

I boycotted them today!

LineRunner Wed 17-Oct-12 23:52:51

I would like to invoke market forces in that case.

If enough people don't fancy spending their money on something, it'll just disappear.

Want2bSupermum Thu 18-Oct-12 00:20:27

I am with Toombs on this. Starbucks have not broken the law. Many companies are doing things far more dodgy and it is a thin line between their practices and tax evasion.

The transfer pricing used by DH's employer is calculated based on the prior year numbers and is approved by both Danish and US tax authorities. While they operate in the US all profits are repatriated back to Denmark in the form of a dividend so they don't pay corporate taxes here in the US. This is legal because his employer is a cooperative and such payment is permitted in the US. Moral obligations don't come into it. The law has to be followed and no company should be punished for this.

Those who are saying that someone has a moral obligation are off base. They have paid their fair share according to the current rules and regulations. If you don't like the current rules and regulations protest to your MP. Boycotting Starbucks isn't going to change anything apart from drive away a successful company from the UK, taking jobs, VAT and revenue from business rates with them.

ChippingInLovesAutumn Thu 18-Oct-12 00:24:14

Boycotting Starbucks will not change international law, unless you make a HUGE noise about why it's being boycotted AND boycot lots of other large companies who operate in the same way.

It is unfair and ridiculous to single out one company like this.

People need to be more aware of how the law/taxation works before they start asking people to boycot things.

Viviennemary Thu 18-Oct-12 00:26:50

But if they're not making a profit in the UK then it won't matter if people take their business elsewhere. Will it?

PropertyNightmare Thu 18-Oct-12 00:34:27

My Boycott of Starbucks went very well today. I hope that they missed me and my UK money this lunchtime. Costa was lovely and the nice woman behind the till told me that they had been delighted to welcome a noticeable amount of new customers today (when I mentioned how I had defected from StarFucks) smile

LineRunner Thu 18-Oct-12 00:37:41

If people take their business elsewhere, isn't that just choice and market forces?

PropertyNightmare Thu 18-Oct-12 00:44:38
PropertyNightmare Thu 18-Oct-12 00:46:34

Arf at 'Think Before You Drink'. My sentiments exactly grin

PropertyNightmare Thu 18-Oct-12 00:50:33

And for once I am glad to see the Daily Mail wailing.......

www.ft.com/cms/s/0/5cd14dcc-187f-11e2-8705-00144feabdc0.html#axzz29bRVt6Nv

PropertyNightmare Thu 18-Oct-12 00:52:02
Toombs Thu 18-Oct-12 00:58:12

Well done, I'm sure that all those who depend upon Starbucks for their jobs will relish the prospect of unemployment.

Power to the people!

Latara Thu 18-Oct-12 05:56:35

Ordinary working women & men risk in OUR COMMUNITIES risk losing their jobs if we boycott Starbucks.
I HATE tax evasion but I've been in the local JobCentre recently & there are long queues... EMPLOYEES CAN'T JUST GET ANOTHER JOB EASILY!!!

How does that ease your conscience?

I will not boycott because i don't want to see my friends who work in our local branch lose their jobs.

RichManPoorManBeggarmanThief Thu 18-Oct-12 06:22:49

Bottom line is that no company or individual in the UK knowingly pays a penny more in any type of tax than they are legally obliged to. Therefore, we should boycott every company in the country (and every person as well).

gimmecakeandcandy Thu 18-Oct-12 06:36:51

If you are going to talk about this let's talk about the worst offender - Philip Green and his Arcadia group with his overpriced Topshop tat. That man is reprehensible. It's disgusting how much tax he avoids paying!

CinnabarRed Thu 18-Oct-12 08:58:32

What is it that you think Philip Green is doing wrong? I'd be really grateful if you would explain what you think is so egregious about him, Top Shop and Arcadia.

CinnabarRed Thu 18-Oct-12 09:03:44

Another question that fascinates me - why are you all up in arms at Starbucks, but not at Greene King?

Morally, what Greene King has done is far, far worse. They have tried to save UK tax using a scheme that was completely contrary to the policy set out by parliament and the spirit of the legislation. To me, that's deeply immoral, but not one single person on this thread has commented on Greene King.

Starbucks, in contrast, have abided by the letter of the law, the spirit of the law and the policy intent set our by parliament. To me, that's moral. I really don't see what more they can do. Honestly.

So why are so many people hating Starbucks but ignoring Greene King?

A1980 Thu 18-Oct-12 09:07:54

I never go anyway. the coffee is Shit and overpriced.

Absy Thu 18-Oct-12 09:11:55

"So why are so many people hating Starbucks but ignoring Greene King?"

1. Because it's in the headlines, so it's "out there" and people don't need to search it out, or think about it, in order to have it as a target of vitriol
2. Starbucks is American, and the weird British anti-American sentiment is (I imagine) a part of this. Those nasty successful American companies operating in the UK! How bloody dare they! (meanwhile, if you go to NY it has Pret all over the place, you can't MOVE for Le Pain Quotidiens etc. etc.)
3. Starbucks has long been a symbol, along with McDonalds, of all that is wrong with the world in terms of Globalisation.
4. As demonstrated by this thread, the concept of what real tax evasion is, evades people

MaryZed Thu 18-Oct-12 09:12:58

Good summary there Absy.

YokoOhNo Thu 18-Oct-12 09:15:02

I'm in! Their Americano tastes like hot water with brown grit floating in it, so no great loss.

I've boycotted Tesco for years. My old company did a lot of work for them and was bloody gobsmacked at some of the things I saw, slecifically their corporate practices and synthetic tax avoidance schemes. One year, my extra special, super duper special Christmas bonus was £100 of Tesco vouchers. I got drunk at the Christmas party and gave them away to the homeless man who used to beg outside the Tesco Metro on East Cheap.

PedallingSquares Thu 18-Oct-12 09:31:58

I am genuinely interested to know what do people hope this boycott will bring about.

Are Starbucks expected to lobby parliament and beg to be allowed to pay tax in the UK?

Or is it hoped that Starbucks will be forced out of business which they would apparently deserve as no-one liked them anyway?

gabsid Thu 18-Oct-12 09:39:30

Just say the article. And its legal. Tax camaigners have argued for years to tighten the rules.

It sickens me to read that.

On the other side the country is in huge debt, public services are being cut, the poor and the disabled suffer, while the fat cats are having a party.

And the government does nothing to sort it out, a bit like with the bankers. What are they scared of? If the big businesses are not contributing to the UK economy anyway wouldn't it just be beneficial for local businesses? There wouldn't be any harm done if they went, would there?

CinnabarRed Thu 18-Oct-12 09:45:59

There would be enormous harm if all the international companies left the UK. There simply aren't enough local businesses to meet the demand. So the demand would go unmet and the recession would deepen catastrophically.

And even if there were enough local businesses willing to step up, they wouldn't be able to source their raw materials/products because those come overwhelmingly from international companies too.

Look at Greece. International companies are pulling out faster than you can say hot cakes, and economic collapse spirals downwards faster and faster.

CinnabarRed Thu 18-Oct-12 09:48:32

And it's simply not true that international companies don't contribute to the UK economy. Even when they're not profitable and so not paying corporation tax, they employ thousands and thousands and thousands of people. Who would employ them? And what would happen to the country's benefits bill if millions were suddenly unemployed?

economistextra Thu 18-Oct-12 09:49:17

Yanbu.let's boycott McDonald's and KFC too.

CinnabarRed Thu 18-Oct-12 09:49:20

And if we kicked out every US company, say, wouldn't the US be entitled to do the same to our companies operating over there?

CinnabarRed Thu 18-Oct-12 09:50:15

"Yanbu.let's boycott McDonald's and KFC too."

Even though McDonalds paid £80m of UK tax last year?

MaryZed Thu 18-Oct-12 09:53:53

The other point to make is that Starbucks pay salaries, whether you like it or not (and they won't if they go bust).

And people pay tax on those salaries, and pay VAT when they spend the rest of those salaries.

In these days of high unemployment, any company that employs especially low-earners is good for the economy. If these workers are laid off due to a boycott, not only will they pay no tax, and spend less, they will also be claiming benefits.

So it is a ridiculous time to boycott a company that employs something like 5,500 people in the UK.

MaryZed Thu 18-Oct-12 09:54:28

x-posted - what Cinnabar said (again).

CinnabarRed Thu 18-Oct-12 09:56:54

BTW, for the poster who said that in 2011 Starbucks were planning to open 200 more stores.

They closed my local Starbucks in November 2011. Couldn't make it profitable with the level of rent they had to pay for their high street premises.

The building is still empty.

FunnysInLaJardin Thu 18-Oct-12 09:58:47

I think we should boycott all American companies as a matter of principle

<lighthearted>

MaryZed Thu 18-Oct-12 10:02:10

Cinnabar, how is your head this morning? I thought it might be a bit sore from all the head-desk-banging

<proffers paracetamol>

Pagwatch Thu 18-Oct-12 10:03:45

I think this thread has been really informative.

I can understand a knee jerk reaction to something that seems unfair. But tbh I think it is quite encouraging to see that the issue is far more complicated than a quick headline would have you believe. However much we want to throw everything and everyone into good guys or nasty fuckers it is almost never accurate

And starbucks salted caramel bar thingys are lovely

Absy Thu 18-Oct-12 10:05:47

Yes, let's all just keep our own companies in our own countries, and that way everyone will be happy. hmm

CinnabarRed Thu 18-Oct-12 10:07:55

Well, as a minion of satan I have two heads, so only need to reserve one for desk banging...

wink

Pagwatch Thu 18-Oct-12 10:09:41

Having two heads would make doing your hair much easier.

FunnysInLaJardin Thu 18-Oct-12 10:16:30

but far more time consuming. You'd need to keep it quite short otherwise you'd be there for hours