... 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.

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.

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

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.

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.

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.)

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

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.

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.

Here's the ActionAid report into SABMiller.

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

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?

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.

I'm in
(never been in one anyway)

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

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.

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.

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.

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.

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

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.

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?

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

(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... )

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.

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.

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.

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