Starbucks 'paid just £8.6m UK tax in 14 years'
- Thread starter Dj_Jestar
- Start date
Soldato
- Joined
- 15 Mar 2010
- Posts
- 11,542
- Location
- Bucks
Dunno , but if you look around Oxford theres loads of Independent Coffee outlets most are around a starbucks of some sort - they have been there for years so there's clearly demand. I dont think there exactly on the same 'wipe out' scale of Tescos somehow.
Soldato
- Joined
- 25 Sep 2009
- Posts
- 10,224
- Location
- Billericay, UK
So it's also ludicrous that a company put's the interests of it's shareholders in front of that of national governments? People don't go into business to generate tax returns of government treasury's they do it for themselves. Good on Starbucks I say, every privately or publicly traded company should do what it can to minimise it's tax liability.
If you want companies to pay more tax then you must also accept that they will have less money to employee people with and fund future growth. £1 is spent a lot better by companies and individuals then it by a government bureaucrat IMO.
This +1,000,000, If they had substantial pre-trading expenses on their UK network along with substantial capital expenditure it's no surprise their tax bill has been relatively small.
The revenue figures are also meaningless. Corporation tax is charged on assessable profits based on HMRC legislation on allowable and disallowable deductions not accounting profits.
Like others have said if you are not legally obliged to pay more tax, why would you? On top of that the Jobs generated will be contributing a fair amount in income tax and NI receipts.
I agree to an extent. There's nothing wrong (ie illegal) with what they're doing. However, no matter how the accounts are prepared, no matter their capital expenditure, it's laughable that a company the of the size and profitability of Starbucks pays £8.4m in tax over 4 years. It's even more laughable that people (individual tax payers!) who would consider themselves educated on the subject would seek to defend this by saying they're creating jobs so it doesn't matter. Of course it matters. It's like Turkeys voting for Christmas.
Soldato
- Joined
- 14 Feb 2004
- Posts
- 14,315
- Location
- Peoples Republic of Histonia, Cambridge
I can't really criticise because i'm afraid that if I could get away with legally paying less tax I would. I don't feel I owe the country anything in that regard.
But if them paying more (or the amount they should pay without exploiting loopholes) meant you could pay less why should they not be criticise?
The government will do nothing. Customers on the other can and should.
While it might be legal, is it moral to earn so much money and pay only a fraction of what you 'could' pay? Of course they have to make a profit, and of course they are 'deserving' of that income so-to-speak, but is it right to be in a position to have that much wealth and horde it rather than pay it into the society/world? Rich getting richer, and all that.
That's the point though and shows a clear lack of understanding of tax legislation as carried forward losses from prior years can be used to offset assessable profits in the current period. Large amounts of capital expenditure will attract capital allowances (as depreciation is not an allowable deduction) which again offsets against assessable profits. Not to mention if the company is part of a group, losses arising in other group companies during the year can also be utilised to offset assesable profits in other companies within the group.
Anyway I just pulled up the most recently filed accounts for Starbucks and they made a £32 million loss for the financial year. Assuming any tax adjustments didn't create an assessable profit they wouldn't have paid any tax last year.
Last edited:
If they fiddled their taxes to give customer cheaper prices, then it would be less morally dubious, but they charge the same and just use the fiddling to bolster their profits.
Correct me if I am wrong, but coffee has one of the (if not the) highest markups, up there with cinema popcorn (around 900%, lol).
It's tax "avoidance" not "evasion" and before people get all moral on it lets see a quick show of hands from anyone here who voluntarily pays more tax than they are legally obliged to... 
It's down to the government to close loopholes in the tax system and make an educated gamble on if that would actually scare companies away from the UK or not.
It's down to the government to close loopholes in the tax system and make an educated gamble on if that would actually scare companies away from the UK or not.
It's tax "avoidance" not "evasion" and before people get all moral on it lets see a quick show of hands from anyone here who voluntarily pays more tax than they are legally obliged to...
It's down to the government to close loopholes in the tax system and make an educated gamble on if that would actually scare companies away from the UK or not.
Which is all well and good but for the last financial year they made a loss (on revenue of £397 million) and like I said before that if tax adjustments don't create an assessable profit then they were never going to pay tax for that period.
I'm by no means defending the company itself but it's annoying how a sensationalised article is creating such an uproar due to a lack of understanding of corporate taxation law (fyi I work in Corporate Tax).
Corporate entities are by no means angels, quite the opposite but this lynch mob mentality is getting out of hand when there is a relative lack of knowledge in the area.
I know some people are jumping on the band wagon but I hope most reasonable people are using this is more of an example on how the law needs updating. It's frankly ridiculous that they can structure it so that they make a loss and thus pay no tax when it is quite obvious that they will turn a profit from their UK operations, regardless of what the books have been structured to say.
Hence why we have tax adjusted profits to take into account charges which are deductible for accounting purposes but not tax. Even taking out their royalty recharges they still made a loss last year and this year.
Your statement that the company is making a profit seems to be based on nothing more than your own opinion. They aren't fiddled figures, the accounts have been prepared in accordance with ifrs and are also audited, they made a legitimate loss end of discussion.
You'd be surprised how many small Co's benefit from the rules that people are chastising here but please do carry on. On top of that small Co's can satisfy requirements to be exempt from a statutory audit meaning their accounts have a much higher chance of being fiddled to avoid tax.
Last edited:
I read that one reason for their "losses" is that they're buying coffee beans from a subsidiary of theirs at a well above market rate.
So their figures are, if not legally so, very much "fiddled". And fiddled so to avoid paying UK tax. Defending them for doing so, no matter the mode, is, for an individual UK taxpayer totally ludicrous.
It's exactly the sort of scam HMRC should be coming down like a ton of bricks on considering we as a nation are apparently crippled with debt.
So their figures are, if not legally so, very much "fiddled". And fiddled so to avoid paying UK tax. Defending them for doing so, no matter the mode, is, for an individual UK taxpayer totally ludicrous.
It's exactly the sort of scam HMRC should be coming down like a ton of bricks on considering we as a nation are apparently crippled with debt.
Revenue or profit, what's the difference?
