Starbucks has paid no UK income tax since 2009. If I hadn’t paid my taxes since 2009, I’d have been up before the beak, fined, bankrupted, and probably sent straight to jail.
So, how the hell do Starbucks get away with it? Well, by shifting their profits outside of the UK, Starbucks has been able to claim they have made a loss in the UK “despite £3bn in coffee sales and opening 735 outlets,” as Channel4 News reports:
‘[Starbucks] paid just £8.6m in corporation tax - perfectly legal under UK law. In the past three years alone, Starbucks paid no tax on sales of £1.2bn because it reported losses.
Its nearest UK rival, Costa, recorded £377m sales last year, compared to Starbucks’s £398m in 2011, and its tax bill came to £15m, or 31 per cent of profits.
Starbucks was able to legally pay such a low rate of tax by posting a loss in the UK in the last three years, meaning it was therefore not liable for corporation tax. But according to a four-month investigation by the news agency Reuters, the UK unit was effectively paying money to other parts of the business, such as royalty payments for use of the brand.
Reuters compared the losses filed by the company’s UK unit over the years, with transcripts of conference calls made by the company’s executives telling investors about how profitable the company was.
In the 2007 financial year to end-September, accounts filed by Starbucks’s UK unit showed its tenth consecutive annual loss. But that November, Chief Operating Officer Martin Coles told analysts on the fourth-quarter earnings call that the UK unit’s profits were funding Starbucks’s expansion in other overseas markets.
Richard Murphy, of Tax Research UK, told the Guardian:
“The [UK] government says that it has created a competitive tax system. The problem is that UK companies are paying the tax and the result is that it is an uneven playing field. UK businesses are disadvantaged against foreign businesses in the same market place. They are letting foreign companies do business here and not pay any tax.”
While these companies have not have done anything illegal, their actions are a major “fuck you” to the UK citizens and businesses, who pay their taxes. Think of the hospitals, health care, schools, pensions, and alike, this lost revenue could have paid for.
All of which make it more than apparent the current posh boys in government are more than happy to allow tax avoidance on a massive scale, while crippling the ordinary citizens with harsh, austerity measures and taxes.