Starbucks: No UK Tax Paid Since 2009 - despite sales of over £1bn

[Lambchop]

It emerges that the world's second largest coffee chain has paid no tax in the UK for three years - despite sales of over £1bn.

Since opening its first coffee shop in the UK in 1998, Starbucks has racked up over £3bn in sales but shelled out just £8.6m in income taxes, according to new research.

In the latest example of tax avoidance by a multinational company, Reuters revealed that for the past three years the coffee chain reported a loss at its UK business.

As a result it paid no income tax in Britain - but over the same period, its sales hit £1.2bn.

By comparison, McDonald's paid a tax bill of over £80m on £3.6bn of UK sales, and KFC incurred taxes of £36m on sales worth £1.1bn.

There is no suggestion Starbucks has done anything illegal - according to accounts filed with Companies House, Starbucks has made no profit in the UK over the past 10 years.

But transcripts of investor and analyst calls over the period reveal the company has repeatedly said it is pleased with its UK business, which it described it as "profitable".

The coffee chain has defended its actions, saying it follows international accounting rules and pays the appropriate level of tax in all the countries where it operates.

"We seek to be good taxpayers and to pay our fair share of taxes ... We don't write this tax code; we are obligated to comply with it. And we do," a spokeswoman said.

Its overall tax rate globally last year was much higher than average at 31%.

But on overseas income, Starbucks paid an average tax rate of 13% - one of the lowest in the consumer goods sector.

The chief executive of the TaxPayers' Alliance, Matthew Sinclair, said companies exploit loopholes because the UK's tax system is too complicated.

He told Sky News: "There has been a succession of companies from high street names to internet giants who, thanks to the labyrinth of our tax system, appear to be paying much less in tax than many people would expect."

Starbucks, which has a market capitalisation of $40bn (£24.8bn), has a low UK tax rate because of a number of complicated corporate measures.

For example, its overseas operations have to pay a royalty fee - 6% of total sales - for the use of its "intellectual property", including its brand and business processes.

It also buys its coffee beans for its European divisions through a firm based in Lausanne in Switzerland, and the beans are shipped to Amsterdam to be roasted before the reach the UK.

As a result, Starbucks allocates some profits from its UK sales to these Dutch roasting and Swiss trading units.

Mr Sinclair called for a radical overhaul of Britain's tax system to make it simpler.

"Tinkering is not enough; we have one of the most complicated tax codes in the world which is an incredible burden to administer," he said.

"If Britain wants to remain competitive and ensure everyone pays their fair share then we need radical reform that restores legitimacy to our tax code and kick starts economic growth."

HM Revenue and Customs said it cannot comment on the tax affairs of individual businesses.

"We make sure that multinationals pay the right tax to the UK in accordance with UK tax law," it said in a statement.

"Our tax rules combat tax avoidance, and we employ specialist tax professionals to ensure that MNs play by the rules."

[redred]

:roll:

[minz]

Vodafone are another company doing the same, if I was so much as a day late paying my vat bill I'd be screwed so how did they get away without paying theirs. :roll:

[FBD]

"Our tax rules combat tax avoidance, and we employ specialist tax professionals to ensure that MNs play by the rules."

:lol: the rules fkn encourage tax avoidance by being so friggin complex.

[Leefro]

:lol: the rules fkn encourage tax avoidance by being so friggin complex.

got nothing to do with it as all it is about is Loopholes

[Muddy]

Im sure they didnt pay it here either.. They are probably corporate based in the Cooke islands at 1% tax or something so they can fuck everybody...

[FBD]

got nothing to do with it as all it is about is Loopholes

That's pretty much what I said brotha ;)

[Leefro]

If they are not contributing to society they should kick them out

[Muddy]

If they are not contributing to society they should kick them out

We say the same thing about the nonworking lower class all the time..

[Leefro]

We say the same thing about the nonworking lower class all the time..

They are on about the same level but who do governments go after

THE WORKING MAN OR WOMAN

Cunts the lot of em

[Muddy]

They are on about the same level but who do governments go after

THE WORKING MAN OR WOMAN

Cunts the lot of em

:agreed:

[Leefro]

Starbucks UK’s accounts shows that it has minimised its tax burden by officially recording losses of tens of millions of pounds year after year.

[Muddy]

Starbucks UK’s accounts shows that it has minimised its tax burden by officially recording losses of tens of millions of pounds year after year.

The prolly show losses becasue they take their profits and build 500 new stores every year with them.

[Leefro]

Now this is funny

“There has been no suggestion by any authority that we are anything but compliant and good tax payers. We do this in a way that is consistent with the values that have guided us since we were founded more than forty years ago - balancing our need to operate a profitable business with a social conscience.”

[Acid Trip]

Starbucks UK’s accounts shows that it has minimised its tax burden by officially recording losses of tens of millions of pounds year after year.

I'm thinking you have a misunderstanding of the words "revenue" and "profit". Revenue = total sales. Profit = money left over after all operating costs are paid (wages, supplies, retirement, healthcare, etc)

You could have $50 trillion in revenue and still lose money if your operating costs exceeded $50 trillion. This is why we tax profits and not revenue. If you taxed revenue and a company had a bad year (no profits) it would instantly be bankrupted.

As for contributing nothing to society that's a load of crap. Every Starbucks employee in England earns wages and those wages are taxed by the government. If you kick Starbucks out of the country those people would lose their jobs and the government would lose the taxes it gains by those people being employed.

[Leefro]

I'm thinking you have a misunderstanding of the words "revenue" and "profit". Revenue = total sales. Profit = money left over after all operating costs are paid (wages, supplies, retirement, healthcare, etc)

You could have $50 trillion in revenue and still lose money if your operating costs exceeded $50 trillion. This is why we tax profits and not revenue. If you taxed revenue and a company had a bad year (no profits) it would instantly be bankrupted.

As for contributing nothing to society that's a load of crap. Every Starbucks employee in England earns wages and those wages are taxed by the government. If you kick Starbucks out of the country those people would lose their jobs and the government would lose the taxes it gains by those people being employed.

Well if they paid their way then we could get more people working in something a little bit more exciting than a fucking coffee and a Muffin and get back the manufacturing base which is now non existent in this country

[Muddy]

As for contributing nothing to society that's a load of crap. Every Starbucks employee in England earns wages and those wages are taxed by the government. If you kick Starbucks out of the country those people would lose their jobs and the government would lose the taxes it gains by those people being employed.

Unless those wages are exempt from Federal taxes because they are below the poverty level.. :lol:

[Leefro]

Here we have the minimum wage so they will be paying taxes on their wages

But more than likely will be bumped up from the Government coffers

[Muddy]

Here we have the minimum wage so they will be paying taxes on their wages

But more than likely will be bumped up from the Government coffers

Not here.. If you earn under 25k or so you get all your money back in the form of a tax refund check...

[Leefro]

http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/workingtaxcredit/index.htm

[RBP]

I'm thinking you have a misunderstanding of the words "revenue" and "profit". Revenue = total sales. Profit = money left over after all operating costs are paid (wages, supplies, retirement, healthcare, etc)

You could have $50 trillion in revenue and still lose money if your operating costs exceeded $50 trillion. This is why we tax profits and not revenue. If you taxed revenue and a company had a bad year (no profits) it would instantly be bankrupted.

As for contributing nothing to society that's a load of crap. Every Starbucks employee in England earns wages and those wages are taxed by the government. If you kick Starbucks out of the country those people would lose their jobs and the government would lose the taxes it gains by those people being employed.

You forgot the sales tax on £1.1bn

[Acid Trip]

You forgot the sales tax on £1.1bn

True. Paying more in taxes also won't bring manufacturing back to England because the government doesn't manufacture anything, private businesses do.

I understand Leefro's frustration because we are seeing the same thing in the United States. It's cheaper to manufacture in shitty countries than fully developed ones. Why pay someone in England £15-50 an hour to work in a factory when they can get the same job done in Vietnam for $1-2 an hour?

Free Trade is inherently bad for developed countries and good for underdeveloped countries.

[Leefro]

I wonder how many Starbucks are in India

[Teh One Who Knocks]

I wonder how many Starbucks are in India

Tata Starbucks readies for India entry by end of October (http://timesofindia.indiatimes.com/business/india-business/Tata-Starbucks-readies-for-India-entry-by-end-of-October/articleshow/16585414.cms)

[FBD]

True. Paying more in taxes also won't bring manufacturing back to England because the government doesn't manufacture anything, private businesses do.

I understand Leefro's frustration because we are seeing the same thing in the United States. It's cheaper to manufacture in shitty countries than fully developed ones. Why pay someone in England £15-50 an hour to work in a factory when they can get the same job done in Vietnam for $1-2 an hour?

Free Trade is inherently bad for developed countries and good for underdeveloped countries.

It's ironic when people lament the lack of mfcg, but then support crap like NAFTA...then top it off in failing to realize.that we mfg plenty, its just all done by machines.

[Leefro]

Tata Starbucks readies for India entry by end of October (http://timesofindia.indiatimes.com/business/india-business/Tata-Starbucks-readies-for-India-entry-by-end-of-October/articleshow/16585414.cms)

Well two words spring to mind

Hot Mud

[Leefro]

It emerged in October that the US coffee firm, worth £25billion, had paid just one per cent corporation tax on £3billion UK sales since 1998.

Starbucks, which has 700 outlets in Britain, insisted it was 'committed' to the UK for the long-term and would release its new tax plans later this week following talks with HM Revenue and Customs and the Treasury.

Costa Coffee, Starbucks's main British rival, generated sales of £377million last year, on which it paid £15million in corporation tax; 31 per cent of its profits.

In comparison, in the last 14 years Starbucks, which earned sales of £398million last year, had paid £8.6million in corporation tax.

A four-month investigation by the Reuters news agency revealed Starbucks legally cut its income tax in the UK by paying fees to other parts of its global business, such as for the right to use the Starbucks brand.

This led to Starbucks UK effectively making a loss and therefore not liable to pay corporation tax.

'Starbucks is committed to the UK for the long term and we have invested more than £200million in our UK business over the past 12 years,' the company said on Sunday.

'Starbucks has complied with all the tax laws in this country but has regretfully not been as profitable as we would have liked.'

Starbucks continued: 'We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more.'

Campaign group UK Uncut said the government had to do more to target legal tax avoidance.

Jane Harvey, a spokesperson for UK Uncut, said: 'It is not up to Starbucks to promise it will pay a bit more tax when it suits them, it's up to the government to force companies to pay their fair share.

'This announcement shows that protest and public pressure works and that we are doing the government's job for them as they refuse to tackle tax avoidance. The government's next step must be to close the loopholes that Starbucks and other companies use to avoid paying billions in tax to the UK, instead of targeting single mums and disabled people through slashing public services, the welfare state and privatising the NHS.'

UK Uncut is planning a day of action targeting Starbucks stores next Saturday.

Ohhh my word they have found some money

[redred]

it's the countries fault imo ,we have the holes that these companies can work their way around and who wouldn't if you could , if i paid lots of tax i'd try and find a way round it , the rich are rich for a reason they're good with money

[Leefro]

Actually it's both

Costa who they compete with pay their taxes and they are a british set up

And because of the bad publicity they thought better of it

[redred]

agree the publicity has forced their hand on this change same as jimmy carr and what he did after he was caught out

[Lambchop]

I'll just encourage my friends* to go to Costa instead.



*will need to find friends first

[minz]

It's good to see the IR are going after the big names for a change, they have been targeting small businesses for years now and letting the big businesses get away with far too much.

[Leefro]

I'll just encourage my friends* to go to Costa instead.



*will need to find friends first

That is exactly why they have decided to change their viewpoint

You need some Chloroform and a rag then

[Hugh_Janus]

It's good to see the IR are going after the big names for a change, they have been targeting small businesses for years now and letting the big businesses get away with far too much.

qand targeting me.... my boss said my tax rate was ridiculous. She got her accountant to have a look at what he could do and after an initial rebate, I got a letter telling me I wasn't paying enough tax.... cunts