Starbucks
was facing calls for a consumer boycott last night as MPs prepared to
investigate claims it has paid just a few million pounds in corporation
tax since bringing its coffee shops to the UK 14 years ago.
As a campaign against the company gathered pace on social media, politicians and union leaders were among those urging people to avoid its 735 UK stores.
Stephen Williams, a Liberal Democrat MP, said “consumer power” would force Starbucks “to come clean about their tax avoidance activities”.
“Consumer boycotts have a long tradition in the area of coffee and sugar going right back to 18th century Quaker led campaigns in Bristol against the slave trade,” he said. “Think before you drink and maybe we’ll get this company to act responsibly.”
According to a Reuters investigation the retailer has paid £8.6m in corporation tax since it opened in the UK in 1998 and has not paid any since 2009. The company has made UK sales of £1.2bn in the past three years but declared no profit despite having described the British business as “profitable” to investors and analysts.
Starbucks hit back on Wednesday, arguing that corporation tax represented just a fraction of its UK tax burden.
Kris Engskov, UK managing director of Starbucks, said the
company had in the past three years “paid over £160 million in various
taxes including National Insurance contribution for our 8,500 UK
employees, and business rates”.
He added: “The truth of the matter is, the one tax that has been debated in the media, corporation tax, is based on the profits we make in this country – and regrettably we are not yet as profitable as we’d like to be.”
MPs are set to question tax officials about multinationals’ tax planning next month when senior Revenue & Customs officials give evidence to the Commons public accounts committee. Margaret Hodge, who chairs the committee, said HMRC had “questions to answer” about Starbucks’ tax affairs.
MPs on the Treasury subcommittee are also due to question HMRC officials and George Mudie, its chairman, said he planned to ask them about Starbucks.
HMRC said last week that it deployed specialist tax professionals to ensure that multinationals complied with the rules.
Heather Self of Pinsent Masons, a law firm said the controversy over the tax paid by multinationals did not justify a change in the law but underlined the need for proper enforcement. “HMRC needs the skills the assess the information it is being presented with.”
Efforts by HMRC to crack down on tax avoidance are set to come under scrutiny on Thursday when it publishes it latest figures for the “tax gap”, the difference between what it collects and what it ought to collect. The tax gap is expected to increase because of the rise in VAT.
ft.com 17 Oct 2012
Whilst some companies are allowed NOT to pay tax, others are publicly hung.
There are many factors that decide which businesses pay tax and which do not.
As a campaign against the company gathered pace on social media, politicians and union leaders were among those urging people to avoid its 735 UK stores.
Stephen Williams, a Liberal Democrat MP, said “consumer power” would force Starbucks “to come clean about their tax avoidance activities”.
“Consumer boycotts have a long tradition in the area of coffee and sugar going right back to 18th century Quaker led campaigns in Bristol against the slave trade,” he said. “Think before you drink and maybe we’ll get this company to act responsibly.”
According to a Reuters investigation the retailer has paid £8.6m in corporation tax since it opened in the UK in 1998 and has not paid any since 2009. The company has made UK sales of £1.2bn in the past three years but declared no profit despite having described the British business as “profitable” to investors and analysts.
Starbucks hit back on Wednesday, arguing that corporation tax represented just a fraction of its UK tax burden.
‘We noticed that you filed the super-skinny, no-caff tax return indicating that you have no tax liability’
He added: “The truth of the matter is, the one tax that has been debated in the media, corporation tax, is based on the profits we make in this country – and regrettably we are not yet as profitable as we’d like to be.”
MPs are set to question tax officials about multinationals’ tax planning next month when senior Revenue & Customs officials give evidence to the Commons public accounts committee. Margaret Hodge, who chairs the committee, said HMRC had “questions to answer” about Starbucks’ tax affairs.
MPs on the Treasury subcommittee are also due to question HMRC officials and George Mudie, its chairman, said he planned to ask them about Starbucks.
HMRC said last week that it deployed specialist tax professionals to ensure that multinationals complied with the rules.
Heather Self of Pinsent Masons, a law firm said the controversy over the tax paid by multinationals did not justify a change in the law but underlined the need for proper enforcement. “HMRC needs the skills the assess the information it is being presented with.”
Efforts by HMRC to crack down on tax avoidance are set to come under scrutiny on Thursday when it publishes it latest figures for the “tax gap”, the difference between what it collects and what it ought to collect. The tax gap is expected to increase because of the rise in VAT.
ft.com 17 Oct 2012
Whilst some companies are allowed NOT to pay tax, others are publicly hung.
There are many factors that decide which businesses pay tax and which do not.
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