... ask MNers to boycott Starbucks?

[legoballoon]

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.

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

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.

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.

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....

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

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 :)

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

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?

In. Complete losers.

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.

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

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....

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

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?

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....

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.

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?

"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.

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.

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.

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.

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.

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.)

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.

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.