Starbucks pays NO tax for 3 years: For Queen and Company


By Tom Moriarty, former City worker and part of Occupy London’s Economics working group who has contributed to Occupy London’s first book, The Little Book of Ideas, published yesterday on the anniversary of the Occupy London Stock Exchange camp by St Paul’s Cathedral:

Turns out that Starbucks generates £398m in sales in the UK and is so good at avoiding tax it pays … no tax.

Costa on the other hand generated spookily similar sales of £377m but paid £15m in tax, which amounted to 30% of its profits.    Costa can make profits of £15m on their caffeine sales but Starbucks makes a loss of £32.9m. Doesn’t make good business to me.

I suppose you could live with a massive loss-making operation for a year or so but apparently it’s been loss-making for 10 years, which makes you wonder how is it still operational. Most companies would have folded. Of course it could be that it’s being supported by the parent in Seattle, however they charge them 6% just to be Starbucks in the UK. So it’s not that then.

Amazingly Starbucks say they are a “good tax payer”, in what sense “payer” I wonder. It could perhaps be that they are putting through a whole load of expenses perhaps from other territories or inflating their costs to negate any profits.

Yesterday Occupy London published its first book – The Little Book of Ideas – on the first anniversary of the Occupy London Stock Exchange camp by St Paul’s, with the book highlighting tax avoidance in particular by major corporations .

Barclays for example paid 1% tax most recently which saved them £3.14bn.   HMRC the other day revealed that they could recoup £4.5bn by chasing down all those celebrities and football stars and doctors and lawyers who have put their money into complicated tax avoidance schemes etc.   That gives you some idea of the scale of corporate tax avoidance that occurs at a level that makes individual efforts to avoid tax somewhat puny.   Facebook paid £240,000 in tax off £175m in revenue.   Amazon pays approximately 1% tax in the UK by putting their UK sales through Luxembourg.

The list goes on.

One has to presume that this is all done on the basis of a tacit understanding between HMRC and the corporations, an unsaid deal between Queen and company. Somewhere these is an unwritten rule that the tax man will be nice to you as long as you pay the wages of lots of people although one suspects it is the other way round.  More along the lines of Starbucks saying to the government, “you will be nice to us.”  And since government is supposedly of the people then they are saying it to us.  As it turns out then a coffee from Starbucks is actually £3 when you added in the amount of tax we have to pay on their behalf.

And so it is that the major corporations can twist the arm of government to ensure that their owners and shareholders share in their profits with a 30% tip from the British public.  Who would have thought we could be that generous.

© 2012 Occupy London
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