... 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.

Ok but if you've made an international change to the whole basis of the tax system and that leads to a net disadvantage to the uk, what is the "something" that could be done about it?

There are already policy tools used to maximise our tax take from businesses: the tax rates. A corporation tax rate has been picked for the UK that the Treasury believes will maintain our attractiveness to do business here and ideally encouraging businesses to be headquartered in the uk, whilst giving the treasury a good level of revenue.

Ireland has chosen to use a low corporation tax rate in order to attract more businesses to be based there but with the consequence that each pays a lower %. I believe that a couple of previously UK headquartered companies moved to Ireland for that reason.

Personal taxation rates, VAT levels, treatment of non-doms etc are also all tools at the Treasury's disposal and there will be models on permanent churn working out the best balance of all the factors.

But Ireland is fucked, so decent candidates will be rather more sparse than in the UK.

But they are paying their taxes where due Solo [baffled]. That's the whole point of the explanations on this thread, which I suspect some people haven't read.

We are clinging frantically to our lower corporation tax rate, because the alternative is going completely bust. Ireland as a country realises that the employment offered by international companies, and the wages going back into taxes and the local community far outweighs what we lose in actual corporation tax on profits.

In fact, I suspect that we get pretty much no tax directly from many of these massive corporations. But without them the benefit bill would be so much higher, and the income tax receipts so much lower, the country couldn't survive.

The lower corporation tax was originally offered to stem the scary emigration rates where all our young people were going abroad to get jobs.

If it's going to lead to a disadvantageous situation, it needs to be renegotiated. Clearly, whatever tax rate 'has been picked' is not doing its job because it's trying to encourage the multinationals to come here. At some point a balance has to be struck between local, small business and the globals - maybe the scales need to be tipped the other way?

Nothing is ever 'finished' - we are never going to get to a situation where we can say 'Things are as they are and not going to change'. Our govt has some powers, but we don't have any control over so many external circumstances.

What we need is a flexible, trouble-shooting approach. A govt that is not hampered by outdated ideology but that sees what is best, not just for us but for the world, and goes out and fights for it.

No, I have read them carefully. My point is that whatever the situation is, it's not working and can be changed.

"If it's going to lead to a disadvantageous situation, it needs to be renegotiated" - and other countries (all of whom are trying to increase their own tax revenue/encourage business according to their own prevailing political and economic policies) will do this because...?

Because, Merrymouse, when they see how happy and contented everyone becomes in the UK, they will want to do the same for their own people.

Or because their people finally decide they have had enough and get rid of their governments. Whichever happens first.

Great post, MaryZ. One reason why it's better to have the HQ in the UK is that employment taxes are at a significantly higher rate than corporation tax anywhere, so the more senior people in the UK (or ireland for Mary), the better (not to mention knock on effects for their money in the economy buying goods and services).

Solo I don't understand your point.

Honestly - we have people on one hand complaining about the state of the British economy yet boycotting Starbucks, who are good employers, because they 'feel' the company should pay more in corporate taxes even though the sub is making a loss.

When it comes to operating a business you don't 'feel' because you must follow the rules (laws). International tax is complex and clearly some people here are not willing to open their mind to a new concept or the basic concept of law and order.

I find it incredibly sad to read that on page 31, after 750+ messages where posters have tried to educate and provide a balanced view to show that Starbucks are not in the wrong, that there are still posters who continue to show ignorance towards a multinational employer who not only provide employment in the UK but is looking to increase the number of outlets in the UK, therefore increasing the number of employees.

We should be greatful that Starbucks isn't pulling out of the UK. They are making a loss overall but are willing to continue to invest in the country and try to make a profit. They are also trying to make a profit while maintaining their ethics. I can only applaude them for maintaining their integrity instead of cutting expenses such as employment and their charitable work.

People here also forgetting the UK government will be collecting taxes from the companies who rent retail space to starbucks and other suppliers such as the company(ies) who supply fresh milk etc. Starbucks will also be paying millions in business rates and taxes for employees. These are taxes too. There are also the benefits that Starbucks provides to their employees. How many other retailers offer a pension or stock award scheme to all employees? I don't see Costa offering these benefits to store employees and only support centre roles says that 'most roles also include private health care, bonus schemes, a company car, contributory pension and our share save scheme'. I took a look through the 60 jobs they have open online and only the senior management positions come with some of these benefits.

I'd like to ask all the boycotters just how much extra tax they have paid over and above the minimum required, if the answer is nothing then they are as guilty as Starbucks and should immediately write a cheque to HMRC for some unspecified amount based on public outrage.

TheDoctrine, my point is that the law should be changed to make them pay more.

Want2b, I agree, and I'm not saying that Starbucks don't provide benefits for its employees. But if the law were changed to make them pay more tax, they would still be providing all the benefits you mention, plus more money would go into the public purse.

Starbucks is not going to pull out of the UK just because they are required by law to pay more tax. Conditions are good for them here, as mentioned upthread. It's all bluff from the big companies that they will pull out. They won't.

Countries have to stand up to the global empires, rather than compete with each other to provide the most favourable conditions just to lure the multinationals in to set up branches here.

Starbucks aren't " continuing to invest" out of their love of this country. They must think there is a future advantage in it for them. Other companies have employees, suppliers and manage to pay their fair share of tax. As for " we should be greatfull" lets all bow down befor our corparate overlords less the leave us and we will all perish!

But how could it be changed? Specifically, what would you like to see?

Doctrine, what I'd like to see is very simple: the most rich and powerful in society sharing what they've got with the poorest.

How to make that happen? I'm not an economist, so that's a question you would have to ask someone who understands these things better than I do. Ask Cinnabar: If the government wanted to make things more equal, what, specifically, could they do?

All I know is where there is a will, there's a way. The govt need to know what we want. Then they can choose: which section of the population are they going to try to please? Up to now, they have favoured the rich and the very rich. What I'd like to see is them refocusing their attention on how to help the poorest. And I think they will probably find one way of doing that involves making big companies pay more tax, chasing up tax-dodgers, etc.

Good post solar. I don't pretend to be an accountant or tax expert but to my very untrained eye, it would appear that Starbucks have made a very conscious effort to avoid, but not evade tax. Mr joe public who is dishonest about declaring all his earnings would be a criminal, but a multi-national who sets up a sister company with the pure intention of siphoning off what would be its profits for " branding" is still very much making a decision to bend the truth and work the system somewhat. The are not passive victims of the law and it's loopholes, they are very actively deciding to avoid paying tax that adds up probably to millions. In a country where people from lower social groups get put into prison for benefit fraud that may amount to a couple of thousand, and where disabled people have to justify their disability, whilst still getting their dla cut.

They may be behaving within the "law" but their practices can still be deemed unethical by some, and I believe consumers have the right to vote with their feet and perhaps take their custom to smaller businesses who do pay their taxes, by pure virtue as they have no other choice because they don't have the power and resources available to them to worm out of doing so.

They may be behaving within the "law" but their practices can still be deemed unethical by some

It matters not what you think, we do not do law by personal belief. That argument has been used to deprive people of their rights for years. We have law, Starbucks and almost everyone else abides by it, if they don't they're prosecuted. The fact that it is the law that is at fault seems to be escaping everyone, you can drive at 70MPH on a motorway despite some people thinking it is wrong. How would you like to be persecuted for obeying the law just because others have a different idea? That is what's happening to Starbuck, I'm sure that their employees are really happy that you are putting their jobs at risk, that young mums who work there are facing reduced shifts and incomes because the self-righteous have decided that just obeying the law is not enough, that there's some unspecified obligation to pay an unknown amount for no apparent reason.

Toombs Where do your get this idea that no-one would pay more tax than they have to?

I run my own business and had a firm of accountants approach me and tell me that, if I paid them a grand more than our current accountants, they could save us three grand per annum if we just kept a diary of our car use for business. When I said that we don't use our cars for business, he said, well just write a diary, it will save you 3k.

This is how many accountancy companies sell themselves. To be honest it made me feel sick and we stuck with our lovely, honest, thorough accountant in Suffolk. We make more than enough money to live comfortably and I don't feel the need to shaft the vulnerable (which may be us one day) by dodging tax - even if it looks legal on paper.

I still have the right not to be a passenger in a car that drives 70mph if I so choose.

and now ebay too. here

i wonder how much better a position this country would be in if companies paid anything close to the amount of tax they really should be paying.

Makes me wonder why governments don't close all these loopholes.

Oh wait.

no it doesn't.

I know...

And anyway, I think they should be paying tax on the profits they actually make, not what they pretend not to make by paying ridiculous amounts to other companies they own. Jimmy Carr chose not to pay tax on his actual income but instead chose to enter an elaborate scheme that was legal but not right, though the tax he avoided paying was small fry in comparison I would imagine.

They are not using the tax system as it is intended but manipulating it to suit their own ends. And their employees are their responsibility not ours! I personally would prefer they and others like them paid their fair share of tax and maybe working or not working parents wouldn't be living in fear of tax credits/benefits being cut/increasing less than the rate of inflation etc, which is just pinching at pennies while big corporations and avoiding paying billions.

I still have the right not to be a passenger in a car that drives 70mph if I so choose

Nor do you have the right to persecute the driver for carrying out a perfectly law abiding activity.

They are not using the tax system as it is intended but manipulating it to suit their own ends

That is the fault of legislation, if it wasn't intended why is it legal? That the legislation is poorly thought out and drafted is hardly anyones fault but government.

PS. want2bSupermum I love the idea of trying to 'educate' the people who don't agree with you. Patronising?... me thinks yes.

I am also disappointed with your education too. You are not coming on at all.

At least Cinnabar Red had a huge amount of data to share, which targets frustration in the right direction.

Can someone tell me: is corporation tax elective?
I've just come across this article on the BBC:
a report in the Guardian in April said that online retailer Amazon had generated sales of more than ?7.6bn in the UK over the past three years but had not paid any corporation tax on the profits from those sales.

Of course CT is not elective. But it's paid on profits not turnover (thats the second time I've said that on this thread).

And then you take the profits and offset any capital allowances from previous investments, offset any carry forward reliefs etc etc.. So it's never a straight forward percentage calculation.

Sorry, I figured maybe it had been said somewhere but can't read all previous posts.
Also I figured it wasn't elective in principle but that's what the journalists made it sound like!