Starbucks: ‘Paid no UK income tax since 2009’

starbucks_fuck_off
 
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.

The Seattle coffee chain has joined other US companies such as Facebook, Google, Apple and Amazon that have also avoided paying tax.

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.

UK Uncut are taking part in the ‘No cuts, no tax-dodging’ bloc, at the Trade Union Congress (TUC) march, on Saturday, October 20th, in London. Details here.
 

 

Written by Paul Gallagher | Discussion
The Mitt hits the fan: Gawker datadumps 950 pages of Romney’s tax-dodging schemes!


 
God bless you Nick Denton! There is no schadenfreude quite like Republican schadenfreude and this is just…. a beautiful thing.

Gawker’s John Cook on what they’ve got:

Today, we are publishing more than 950 pages of internal audits, financial statements, and private investor letters for 21 cryptically named entities in which Romney had invested—at minimum—more than $10 million as of 2011 (that number is based on the low end of ranges he has disclosed—the true number is almost certainly significantly higher). Almost all of them are affiliated with Bain Capital, the secretive private equity firm Romney co-founded in 1984 and ran until his departure in 1999 (or 2002, depending on whom you ask). Many of them are offshore funds based in the Cayman Islands. Together, they reveal the mind-numbing, maze-like, and deeply opaque complexity with which Romney has handled his wealth, the exotic tax-avoidance schemes available only to the preposterously wealthy that benefit him, the unlikely (for a right-wing religious Mormon) places that his money has ended up, and the deeply hypocritical distance between his own criticisms of Obama’s fiscal approach and his money managers’ embrace of those same policies. They also show that some of the investments that Romney has always described as part of his retirement package at Bain weren’t made until years after he left the company.

Bain isn’t a company so much as an intricate suite of steadily proliferating inter-related holding companies and limited partnerships, some based in Delaware and others in the Cayman Islands, Luxembourg, and elsewhere, designed to collectively house roughly $66 billion in wealth in its many crevices and chambers. When Romney left in 1999, he and his wife retained significant investments in many of those Bain vehicles—he claims they are “passive investments” and that they are managed in a blind trust (though the trustee isn’t blind enough to meet federal standards of independence). But aside from disparate snippets of information contained in his federal and Massachusetts financial disclosure forms, his 2010 tax returns, and SEC filings, the nature of those investments has been obfuscated by design.

When he disclosed his finances to the U.S. Office of Government Ethics in 2007, Romney took care to publish the underlying holdings of many funds he invested with—after disclosing his $1 million-plus stake in “GS 2002 Exchange Place Fund LP,” for instance, he listed six pages of individual equities the fund held, from Panera Bread Co. to Tribune Co. But when it came to the Bain investments, he simply listed the value of his investments in odd-sounding entities like “Sankaty High Yield Partners II LP” with no indication of what was inside. In an accompanying note, he claimed that he had tried and failed to get the information: “The filer has requested information about the underlying holdings of these funds and values and income amounts for these underlying holdings. However, the fund managers have informed the filer in writing that this information is confidential and proprietary, and has declined to provide such information.”

That information—for Sankaty and 20 other funds—is now available here, in the form of 48 documents totaling more than 950 pages. They consist predominantly of confidential internal audited financial statements from 2008, 2009, and 2010, as well as investor letters from the same period, for Bain entities that Romney has previously disclosed owning an interest it. Owing to the timeframe—during and after the catastrophic economic meltdown of 2008—some of the investments show substantial losses. One limited partnership had even entered into liquidation as of October 2008 after failing to meet certain payments owed to partners. Others show astronomical gains.

The documents are exceedingly complicated. We don’t pretend to be qualified to decode them in full, which is why we are posting them here for readers to help evaluate—please leave your thoughts in the discussion below. We asked an attorney who specializes in complex offshore corporate transactions, including ones involving Cayman Island entities, to review them and help us understand them. (We also asked the Romney campaign. It hasn’t responded yet.)

The full set of Gawker’s “Bain File” documents can be read here.

Here’s what Gawker has found so far.

Equity Swaps, AIVs, and Mitt Romney’s Other Tax-Dodging Tricks
Mitt Romney’s Endless ‘Retirement’ Package
How Mitt Romney Puts His Money Where Obama’s Mouth Is
Derivatives, Short Sales, and Mitt Romney’s Other Exotic Financial Instruments
Mitt Romney Is the National Enquirer’s Banker

After THIS, how the hell is Mitt Romney going to be able to continue stonewalling on his MIA tax returns? Maybe he should just release them right now to, uh, I dunno, change the topic from how Paul Ryan wants old people to starve and die and for women who have been raped to give birth to the rapist’s baby ‘cos that’s what Jesus told him to do?

The idea that these documents are, currently, as I type this, being analyzed by crowd-sourcing is either a fortunate or very unfortunate fact of political life in 2012!

Depends on who you are, I guess. Mitt Romney must be going fucking insane right about now.
 

 

Written by Richard Metzger | Discussion