Out of Pod Experience

TBH, if people are actually up in arms over this and actively boycotting Starbuck's in the UK, then I envy you. Here in the U.S. people would just shrug and say, "Business as usual for a large corporation. Nothing I can do about it, so I'll just get back to doing whatever it is that I was doing and hope things work themselves out."

Basically, we're so used to crap like this happening and nothing being done that most of us have stopped trying. It really sucks.

Yeah, but your weird little coffee place isn't starbucks

Well, just realised there wasn't anything about this up, and hoping that CCP Falcon is cool with this economic commentary

I'm not quite sure how well known it is outside of the UK right now that Starbucks, Google and Amazon are in a spot of bother. It turns out these foreign multinationals, had been perhaps abusing the tax code to decrease the amount of Tax that they were paying by operating multiple companies within the EU, and having a Dutch company charge their British company royalties for using the Starbucks logo internally. This kind of approach lead to tax payments of around £9m over the last decade, on the basis of not earning much, and in fact a loss in the UK over the last few years.

And then someone in the Tax office (Her Majesties Revenue and Customs, HRMC) noticed that in the US Starbucks was reporting healthy profits, and different figures to HRMC. This has lead to a mass boycott of Stabucks, occupations by protests to the point where Starbucks was commerialy threatened enough to unilaterally declare it was going to pay more taxes.

There is a joke here that people pay taxes, and megacorps can choose, or thats the gist of it. British humour being what it is, I don't thing that Starbucks just went and made itself the punchline. The current estimates that this announcement to pay £10M/year has backfired and turned Starbucks into the most despised corporation of the liberal, Guardian reading, coffee swilling Apple Mac utilising target market of Starbucks. Estimated damages to the reputation of the corproation are being compounded by cutting staff benefits and break hours. Estimated compound damage is up to 24% of revenue.

Then there's the fact that they offered HMRC money to voluntarily pay more tax, thus motivating them to perform a full investigation and a potential backlog of tax charges, possibly based off of their profit from the UK division on their Dividend sheets.

As it stands, Parliamentary enquiry, HMRC investigation and now the Conservative party are going into an election with easy political capital to be made by clamping down on these tax loopholes which are all over the media daily now.

Popcorn anyone?

Starbucks should welcome the unions with open arms.

The plus side as a company they forgo having to pay tax's to the obama regime like gm
and several other obama fanboi companies in the USA.

The downside is all Starbucks employees become fat lazy 'n' stupid wanting disproportionate wages eventually
making the company go bankrupt.

If Starbucks acted completely within the law and feel that they have done nothing wrong, why are they backpedalling and throwing a token 20 million (which will be offset against fictional running costs at some date in the furture) at us?

It's because that as legal as their chicanery might be, it's indefensible on moral grounds. What they have done is transparent in intent and in effect and some folk feel strongly enough about this to boycott them for it.

In this case, the Costa Coffee example of running effectively the same business, yet somehow making a profit and paying tax on it when Starbucks is for some reason so inefficient that it cannot.

Also the logic of continuing to run an ever expanding business in a market where you make a loss year on year beggars belief. If Starbucks made a genuine year on year loss, they'd have bailed a loooong time ago.

Free market economics? No such thing.

Most folk have come to the conclusion (quite rightly) that these twunts are extracting the urine and it's time for them to stop. The only questions remaining to be answered is have they greased enough of the right palms to be allowed to continue and will the notoriously fickle UK public flock back there now they've discovered that other brands of crappucino are available?




tl;dr version for the under 12s.

Bugger off rich multinational thieving types, we don't believe you.

Its within the law because the government hasn't forced them to pay. They are paying because customers are stopping using them because of it. Hence that. Once the government sorts out the tax laws then they will be cause to close that loophole. Sounds like the loops holes are to help with investment.

I've done personal tax planning before and there is a difference between legal tax planning and tax evasion. Aggressive tax planning options (basically taking the **** against the HMRC) gets challenged in the courts and then the HMRC take the tax they would have had or they will change the law, like with the trust law.