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Starbucks not paying Corporation Tax in the UK

(27 Posts)
SkippyYourFriendEverTrue Tue 16-Oct-12 22:24:34

Basically the scam scheme is this.

For normal companies:

sales £400m (about what Starbucks did in the UK)
Rent, wages, milk, coffee, rates, maybe £320m

Profit £80m

Corporation tax due: 26% on £80m = £20.8m

Except for Starbucks, the £80m profit is paid to an offshore company owned by, er Starbucks, as a 'licensing fee'. So their profit is deemed to be zero in the UK. The £80m may be taxable offshore, but probably not, and even if it is, then the UK still don't get anything.

So another reason to avoid Starbucks.

Beside the shit coffee that is.

SkippyYourFriendEverTrue Tue 16-Oct-12 22:30:58

www.scotsman.com/business/starbucks-avoids-paying-corporation-tax-through-elaborate-scheme-1-2581865

legoballoon Tue 16-Oct-12 22:34:01

Why don't we show the strength behind this huge club that is Mumsnet and each vow not to buy the piss drinks they sell at Starbucks?

I'd love to see what the combined power of all our lovely MNers could do for a business!

The chap they selected to do the 'vox pops' bit on News at 10 was a bit dim. He basically implied it was OK to avoid paying the tax because 'they employ 9000 people'. By that reckoning, all companies could avoid paying their dues. Clearly doesn't realise that 'profits' are what's left over when you've sold millions of cups of overpriced coffee, paid your overheads, given your staff the minimum wage, paid your suppliers the bare minimum etc. Am sure it's a nice healthy profit given their prices!!

MummysHappyPills Tue 16-Oct-12 22:38:03

I think this is shocking too. I came on here specifically to see if there was a thread going about this, and if there wasn't I was going to start one and suggest a boycott.

There are crap anyway. They gave dd a plastic spoon with her babyccino the other day which she proceeded to bite into pieces and nearly choke on. Plus they don't give you a marshmallow with it like they do in costa! grin

But seriously I can't see how the government can justify putti g up tuition fees and cutting dla with shit like this being allowed to happen. angry

Graciescotland Tue 16-Oct-12 22:38:20

That is pretty poor although I imagine they'll be liable for it in the US. Lots of multinationals abuse the loopholes. Someone told me the other day that IKEA is run as a charity for the benefit of the family who own it (or something). <will still go for meatballs but will be pouty about it >

MummysHappyPills Tue 16-Oct-12 22:38:58

And I think we should start a thread in aibu about this to whip up the full wrath that is mumsnet! grin

Solopower1 Tue 16-Oct-12 22:41:49

I hate this.

I do blame Starbucks, and all the other huge companies (Boots, Barclays etc) who get away with not paying their taxes. But I also blame the govt who make it possible - even encourage them - to do so.

The govt think if they made them pay taxes they would go elsewhere, so it's a sort of bribe to keep them here. But are they worth having if they don't contribute? What we need now, much more than coffee, is taxes!

If they left, presumably British companies would take their place, provide the jobs and pay their taxes.

But they wouldn't go anyway - it's just a great big bluff. What and leave the market they have built up and the all the other benefits of doing business in Britain?

MULLYPEEP Tue 16-Oct-12 22:43:16

It's a piss take when you think of all the ethical shit they spout in their shops. That said, loads of companies do this. It would be interesting to see a table of our favourite companies and who pays what tax v's what they could pay.

legoballoon Tue 16-Oct-12 22:45:04

Mummyshappypills Done.

ArthurShappey Tue 16-Oct-12 22:46:13

I'm actually furious that this legal loophole even exists. I very rarely go to Starbucks, but will totally avoid it from now on!

Bossybritches22 Tue 16-Oct-12 22:46:33

But they have got away with it for something like FOURTEEN bloody years.

That's serious amounts tbat could be helping our flagging economy.

pinkteddy Tue 16-Oct-12 22:47:36

Just watching this on newsnight. Its disgraceful that they can file accounts at companies house saying they have made no money but at the same time announce to shareholders healthy profits! They are not the only ones at it either, Facebook, Amazon and Google are amongst others doing the same thing.

edam Tue 16-Oct-12 22:47:49

Amazon's even worse. And there are plenty of others as well. God knows what our government thinks it is doing (and the one before that, and the one before that).

Funny how many people fulminate about 'benefits cheats' but don't even notice multi-billion pound companies leaving the rest of us to pick up the slack...

legoballoon Tue 16-Oct-12 22:48:13

Sign up to boycott here!

www.mumsnet.com/Talk/am_i_being_unreasonable/1589682--ask-MNers-to-boycott-Starbucks

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

I saw on the news that this practice started in 2009, so was presumably legal at that point. The UK tax code is already long and complicated, and in this case may well be circumscribed by EU arrangements UK had signed up to around that time. So I do not know if there is anything that can be unpicked now, but surely that must be the way ahead to if we want to stop multinational behaving like this.

nancy75 Tue 16-Oct-12 22:50:03

The government want to keep them because they employ thousands of staff, who all pay ni and income tax. However it seems unfair on British companies that also have to pay staff and then cough up the corporation tax on top ( I believe costa coffee is British) it seems to be unfair competition. Amazon is another company that I believe do this, and although I know it is legal it seems so wrong when our government is scrabbling about for pennies they can save by cutting off money to disabled people, children and anyone else they can.

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

We're in a time where people need to use foodbanks to feed their children, so I find this disgusting. I'll be sticking with Costa, they pay their taxes!

edam Tue 16-Oct-12 22:54:43

Nancy - but if Starbucks didn't wipe out all the competition then there would be local businesses that employ people and pay taxes.

nancy75 Tue 16-Oct-12 22:56:30

Edam, if you read my whole post you will see that I am not in agreement with them at all.

nancy75 Tue 16-Oct-12 22:59:53

Although it has to be said that small independent coffee shops probably wouldn't employ as many people as a huge chain, star bucks will no doubt have some kind of head office here, with hr depts, supply chain staff, advertising. If every star bucks were replaced with an independent it would probably still mean many less jobs

SkippyYourFriendEverTrue Tue 16-Oct-12 23:01:16

"That is pretty poor although I imagine they'll be liable for it in the US."

Nope, that's unlikely.

Cozy9 Wed 17-Oct-12 05:25:00

Only idiots go to Starbucks anyway. Why pay £3+ for a poxy cup of coffee?

SinisterBuggyMonth Wed 17-Oct-12 22:27:02

Message withdrawn at poster's request.

edam Wed 17-Oct-12 23:00:29

Do you think if I design my own logo I can charge myself £50m a year and claim it back in tax relief...?

SinisterBuggyMonth Wed 17-Oct-12 23:16:23

Message withdrawn at poster's request.

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