Taxing Times For Starbucks?

Starbucks looking to buck the trendI was pleased to hear, on the radio today, that Starbucks the US coffee chain, are in conversation with the UK tax authorities (HMRC) with a view to restructuring their business in order to pay, what is deemed to be, a reasonable amount of corporation tax on their UK based operating profits.

Whilst it should be stressed that Starbucks are not breaking the law, their methods of doing business, using tax differentials across Europe, through which they can actually post an operating loss in the UK, has been seen by many to be wholly unethical.

Naturally, the accountants and tax planners employed by Starbucks are actually only doing the job for which they are paid. So a degree of the blame for this situation must fall on the HMRC and the Treasury for the way they have structured UK tax law.

With other companies such as Amazon and Google also falling under the ‘tax-dodging’ spotlight, it is heartening that the bad publicity, combined with a drop in customer figures and brand respect, has actually forced the company to think again about their social responsibility.

Whilst these companies undoubtedly bring a significant number of service related jobs to the UK economy, this is no excuse for allowing them to shirk their responsibilities when it comes to paying their fair share of tax. As customers, we have a very powerful lobby against these companies, by voting with our feet, and must keep up the pressure until justice is seen to be done.

It would be fun to be a fly on the wall at the meetings going on in Starbuck Central right now. You can bet that one of the phrases being used is ‘how little can we get away with’ and not ‘won’t it be great to pay our share’.

Having two brothers in the accountancy game, I’m loath to question their motives. But it would be really great to think that this dose of ‘enforced responsibility’ might ripple down (or up) into other areas of society whose ethics fall too close to ‘poor’ on the social responsibility scale.

4 Comments (+add yours?)

  1. Gary
    Dec 03, 2012 @ 21:35:50

    Echoing some of my sentiments of a blog entry that I have just written. A society should promote inclusive responsibility at the bottom and also at the top. These kinds of situations only come about because society becomes complacent for a while. Sooner or later the slumbering majority awakens.


    • Anupadin
      Dec 04, 2012 @ 10:26:56

      Wise words as usual Gary. Though, at the risk of sounding paranoiac, I fear that the slumbering masses are sleeping due to a combination of anaesthesia through a smorgasbord of media intoxication, and blatant secrecy, the hiding of such information through over complication, silence and / or lies. The inequalities of society are deeply entrenched and those inequalities are being supported and increased by the people who benefit from them.


  2. Gary
    Dec 04, 2012 @ 16:57:32

    You for me thinking and I was wondering whether inequality is the natural order of things? The issue for me is the gap in wealth inequality. I notice that Government organisations employ a salary differential index e. g 20:1 with the CEO getting 20 x the salary of the lowest paid employee. I notice there’s also something called the National Gini Coeficient that expresses the wealth differentials of counties. It looks like the UK, Canada and Australia come out quite well in relative terms. The US does less well which I would expect. Any counter to the widening wealth differential should be welcomed. The trend has been a general widening of wealth differentials since the 70s.


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