Starbucks cutting pay and benefits for UK workers...

(34 Posts)
Pocketmonster Sun 16-Dec-12 20:32:53

www.thesundaytimes.co.uk/sto/news/uk_news/National/article1177583.ece

I suppose this is to cover the cost of their 'offer' to pay Corporation Tax.

I think I'll continue to keep away if this is true.

What do you think?

CockBollocks Wed 19-Dec-12 13:53:55

Xenia precisely, they have the nerve to call corporations "morally repugnant" when a year or so ago these people were being investigated for fraud - which IS illegal.

Pah!

EtoilesPleinLesYeux Wed 19-Dec-12 07:38:52

Bastards

Xenia Wed 19-Dec-12 07:36:26

I have read their saying ISAs, pensions, charitable contributions (although even there they messed up) are okay and the public statement was against "morally repugnant" aggressive rather than any other kind of tax avoidance. It is all a bit rich from MPs who do their best to ensure they claim all they can and more under the expenses system.

LittleTyga Tue 18-Dec-12 23:34:46

I agree Boffin - I'll always use an independent shop where a cake's a cake not a flipping muffin! And the coffee is much better. I had a taste once and it was warm milk - couldn't taste any coffee!

FamilyGuy2 Tue 18-Dec-12 23:31:52

Xenia

I would agree with you entirely, except I've not read any articles where the government has stated that tax avoidance is fine. unfortunately they have whipped up the uneducated public into thinking that all tax avoidance is immoral. I'm not sure if this has been intentional but from various forums that I've visited there seems to be an extraordinary amount of people that think even normal tax avoidance = tax evasion = immoral.

In this respect I think the first line of your post is spot on but wish the BBC et al would make this clear distinction.

The other error is that a lot is being made (in the news) about turnover and not profits, which are two totally different things.

I don't go to Starbucks often at all but boycotting them is a bit silly IMHO. Boycott them for selling poor coffee or to support local business but not for legal tax avoidance. If anything we should be slamming the government for the £136 million that the public has wasted on phone calls just contacting the HMRC.

smile

BelleDameSousMistletoe Tue 18-Dec-12 18:58:33

Agreed! I'm a big fan of flat rate taxation.

Xenia Tue 18-Dec-12 15:59:57

The Government says tax avoidance is fine but it does not like complex very close to the line schemes which it says is aggressive tax avoidance and it feels is morally wrong - the silly schemes footballers and comedians used which the bigger accountancy practices never recommend.

Then we have Margarte Hodge going further and saying if you set expenses against your earnings (which of course everyone does in business - buy a table for £99 and sell for £100 and you're taxed on £1 profit not £99 turnover) that is somehow wrong if your cost is intellectual property. In fact they are keen to give tax breaks for these rights - there is a new 10% tax for money made from patents. If they could just simplify tax, remove all these breaks and reliefts and have one low tax and same for companies and individuals - say 20% tax (and NI together) and corporation and capital gains tax and a smaller state it would be better and people would not be trying to avoid 52% tax they would otherwise pay.

BelleDameSousMistletoe Tue 18-Dec-12 15:03:53

And, although I wouldn't go as far as "moral rectitude" I kind of agree with Xenia. The fact that they did nothing illegal says more about our taxation than their "morals".

BelleDameSousMistletoe Tue 18-Dec-12 15:02:40

Grimma - of course. I was just trying to explain the continuing success, etc, of coffee shops in general.

Xenia Tue 18-Dec-12 10:11:05

Companies and individuals who minimise lawfully their tax are a beacon of moral rectitude. The state spends money badly and a small state is a moral good thus ensuring the least tax that is paid within the law is a huge moral good. Well done them. Mind you I don't take any junk food so I doubt there would be a single product in their store I would ever eat.

BoffinMum Tue 18-Dec-12 08:20:41

Starbucks moving in killed many loca businesses. Moving out may mean more scope for independent traders to come back.

Their coffee is horrid anyway. Tastes of nothing. And their stores are filthy.

GrimmaTheNome Tue 18-Dec-12 08:12:41

Not everyone works the same way, BD, - for sure some will have cut their coffee and a muffin habit. (Or gone down the road to a local shop where you can get coffee and a sausage barm or a proper cake for less money). Or if looking for 'luxury' find a posh tea/coffee shop (Bettys type of thing) rather than a bland American chain.

BelleDameSousMistletoe Tue 18-Dec-12 07:31:15

Coffee doesn't go because it's a small luxury. Beauty shops are a similar example - they usually continue to do well even in recession as they provide "little" luxuries for those who can no longer afford that second or third holiday or new car, etc.

CogitOCrapNotMoreSprouts Tue 18-Dec-12 07:26:55

Yes... serious. If we're all meant to be so hard up these days, sipping coffee at extortionate prices has to be one of the first things to go, surely?

SmellsLikeTeenStrop Mon 17-Dec-12 23:10:29

Really? In cash-strapped Britain, are there still enough people willing to pay nearly £3 for a cup of Joe? Or has the market contracted already and we're not so easily ripped off knowing that, for the same price as that cup of coffee, we could put together a reasonable family meal?

Is that a serious question?

VivaLeBeaver Mon 17-Dec-12 15:45:37

Well the Nhs has pretty much managed to do this, albeit via a slightly different angle. Boils down to me still having less money in my pay packet every month for the same work.

And they're looking at making this worse by looking at regional pay and stopping unsocial hours pay.

And there is a consortium of Nhs trusts in the south west which have said they're going to make all staff sign new contracts on less pay.

So sadly it doesn't surprise me that Starbucks are doing this. It won't surprise me if more private companies do it. After all if the government are leading the way with the Nhs then why not?

It seems that contracts aren't worth the paper they're written on.

CogitOCrapNotMoreSprouts Mon 17-Dec-12 15:32:20

"The demand for coffee shops will still be there"

Really? In cash-strapped Britain, are there still enough people willing to pay nearly £3 for a cup of Joe? Or has the market contracted already and we're not so easily ripped off knowing that, for the same price as that cup of coffee, we could put together a reasonable family meal?

Battlefront Mon 17-Dec-12 13:11:21

I'm not sure that's true Smells - was there a massive demand for coffee shops before Starbucks arrived in the UK or was it created by them/their marketing?

Agree it won't go back to how it was overnight, but I doubt those left would benefit from all the trade currently done by Starbucks

SmellsLikeTeenStrop Mon 17-Dec-12 13:08:22

Starbucks profits fall through the floor so they close shops and move out of the uk, resulting in lost rents, business rates, suppliers and worst of all many people out of work completely.

The demand for coffee shops will still be there, business will simply transfer over to other places that are not in the news getting hammered for shitty treatment of employees. The other coffee shops will employ more people, they'll buy more stock and pay more taxes, and perhaps even open up more coffee shops. Thus equilibrium is maintained.

It's not like Starbucks are the only coffee shop operating in the UK, there are plenty to choose from.

Battlefront Mon 17-Dec-12 11:11:08

This is quite clever of Starbuck's IMO (not admirable, but clever) and can't be a surprise to anyone who was involved in the negotiations over their tax liabilities.

"Ok, we'll pay (a tiny) bit of tax, but you wait for the political fall-out, when we start cutting wages/jobs/benefits as a "result")

Of course boycotting will help all their employees no-end

CogitOCrapNotMoreSprouts Mon 17-Dec-12 10:52:33

It's an employers' market at the moment. Has been for quite some time, especially for unskilled work. I expect there's a faily quick turnaround in staff in coffee shops the same as there is for other service industry jobs. i.e. If one's paying better than the others, staff won't hesitate to move on. If Starbucks lost all their staff by making these contract changes, they'd rethink. Calculated risk.

NotSpartacus Mon 17-Dec-12 09:49:50

In many ways I couldn't give a shit about starbucks using tax schemes. I'd like to see a 5% global turnover tax on any foreign person doing business in the Uk, but until that happens there is no surprise that companies will exploit the tax rules.
But I do care about profitable companies changing (reducing) the terms of people who are not paid much more than minimum wage. That is idiotic, especially when you are a company that should be looking to reduce adverse publicity.
There is a very easy fix for Starbucks (and others) here. They make decent money operating in the UK (where a cup of warm brown ick is quite expensive). They can afford to pay staff a living wage I m sure (and some profit is better thn no profit).

mercibucket Mon 17-Dec-12 09:31:05

I read this a few weeks ago and at first thought (shock) but then read about the benefits and a lot sounded a bit crap.

The whole point of a boycott is to have an effect beyond the company being targeted. Eg the fashion industry. Put pressure on a few names and hope the rest also fall into line wrt conditions of workers in dodgy companies abroad. It does work to a point, although of course you get a lot of lipservice. Into which category we can put the Starbucks donation to the charity that is HMRC. Much better of course is legislation. Multinats can afford much better lawyers than plumbers so it works out cheaper for HMRC to chase 10 000 plumbers for small amounts than one multi-nat. The only thing that will make HMRC chase the big companies is public pressure to focus on the rich not the poor. Otherwise why would they ever bother taking on those battles? And yes, they might well lose, but the PR battle is important for some industries as well.

CockBollocks Mon 17-Dec-12 09:16:54

Well maybe you should also boycott all the major supermarkets, retail chains, electrical stores etc etc

They are all as bad as each other but as cognito said Starbucks are the current whipping boy.

FWIW Starbucks paid the tax they were due, as agreed by HMRC this is where the problem lies. Our goverment actually use tax breaks to lure corporates to the UK - then they shame them in the press, completely bonkers.

GrimmaTheNome Mon 17-Dec-12 09:09:00

I'll go back there if they pay their taxes and treat their employees decently. Unless there's a local alternative (some of which serve good coffee and much nicer food for less money).

There's less demand for expensive coffee and muffins at the moment, someone is bound to drop out of the market and I'd rather it was foreign multinationals than independents or UK-based chains.

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