All this Starbucks palaver...

[Killswitch]

Okay...here's my understanding of the facts;

1. Starbucks have followed the letter of the law in regards to their tax affairs
2. The management of Starbucks have a statutory duty to their shareholders to work in the best interests of the company and to maximize shareholder return
3. The UK has one of the most complex tax systems in the world which contains a number of provisions created specifically to encourage businesses to operate in the UK by helping them to reduce their tax burden compared to other countries
4. The government has somehow managed to spin the situation to make out that the problem is immoral companies as opposed to a ludicrous, outdated and complex tax system
5. Most people seem to have fallen for it

Discuss.

 

[dysfunction]

You forgot about the bit they are planning to pay £10m in tax over the next two years....

 

[Killswitch]

You forgot about the bit they are planning to pay £10m in tax over the next two years....

I would guess that this is probably because they believe they will lose more than £10m in profits if they DON'T do this due to adverse publicity. This isn't necessarily an admission of guilt (although it may be).

 

[ECA]

We need tax reform, these large multinationals that pay essentially nothing in corporation tax are leeching money and putting the burden on legitimate taxpayers.

 

[Killswitch]

We need tax reform, these large multinationals that pay essentially nothing in corporation tax are leeching money and putting the burden on legitimate taxpayers.

I agree 100% with the need for tax reform, but I'm not sure that "leeching money and putting the burden on legitimate taxpayers" is fair, for two reasons;

1. They're paying what they're legally obliged to under the law. How are they any less of a "legitimate taxpayer" than you? Do you go to the Inland Revenue and offer to pay extra tax?
2. Who are they leeching money from? In theory at least that decreased tax burden means more employment and more investment in the UK. It also means that the local coffee shop which can't afford fancy tax lawyers and offshore holding companies is at a disadvantage, but that's the fault of the law, not the corporations.

 

[ECA]

Like I said, we need tax reform - we can't really blame them for it.

I agree 100% with the need for tax reform, but I'm not sure that "leeching money and putting the burden on legitimate taxpayers" is fair, for two reasons;

1. They're paying what they're legally obliged to under the law. How are they any less of a "legitimate taxpayer" than you? Do you go to the Inland Revenue and offer to pay extra tax?
2. Who are they leeching money from? In theory at least that decreased tax burden means more employment and more investment in the UK. It also means that the local coffee shop which can't afford fancy tax lawyers and offshore holding companies is at a disadvantage, but that's the fault of the law, not the corporations.

1. Why do you think I didn't blame them primarily? My first statement was TAX REFORM. Then you're all like BUT THEY PAY WHAT THEY OWE!
2. exactly, we need tax reform so real small business can compete. TAX REFORM.

 

[Killswitch]

Like I said, we need tax reform - we can't really blame them for it.

1. Why do you think I didn't blame them primarily? My first statement was TAX REFORM. Then you're all like BUT THEY PAY WHAT THEY OWE!
2. exactly, we need tax reform so real small business can compete. TAX REFORM.

I also agreed with you...but even you must admit that "leeching money and putting the burden on legitimate taxpayers" does come across as at least slightly negative in regards to the multinationals. Given that my original point was about spin and media-led moral outrage I thought it was worth pointing out the use of language. Your actual point (that we need tax reform) is spot on.

 

[wolfeeh]

Fair does ECA. sayin' it plain!

 

[Fweddy]

I love how Starbucks have chosen to pay tax. It must be nice for them that it's optional.

 

[SheepCow]

I think the point is most smaller companies don't have the financial knowledge or expertise to know how to get around tax, so they pay tax - where as the big companies have shit loads of accountants that study the tax systems full time to try to pay as little as possible. Ultimately it needs to be made illegal.

No one in their right mind can think Starbucks would exit the UK market if the loopholes/fiddles were removed and they declared their actual profit and paid corporation tax on it.

(if they did it's not like another company wouldn't fill the gap instantly)

 

[Chilly]

It's essentially marketing spend, lets face it.

 

[wolfeeh]

It probably costs less than the average marketing campaign tbh.

 

[Killswitch]

I've often wondered if we could just do something like;

1) Everyone pays 25% tax on everything they earn over £10,000
2) Businesses pay 10% on all revenue taken within the country and then 2% on any transactions moving money out of the country

I imagine those numbers wouldn't work for all sorts of reasons, but it would mean that the entire function of the Inland Revenue could be done by two full-time staff and maybe an intern! You could also look at a company and pretty much assess their tax liability with only a quick glance at their balance sheet. You'd need much, much, MUCH smarter people than me to fill in the loopholes but I'd hope it could be done on maybe 5-10 sheets of A4.

 

[Killswitch]

(if they did it's not like another company wouldn't fill the gap instantly)

And hopefully make less shitty coffee...

 

[wolfeeh]

And hopefully make less shitty coffee...

You can diss their coffee all you want but their hot chocolate is lush!

 

[Sar]

When I personally pay more in tax THIS YEAR than Starbucks have in the past THREE YEARS, then even morally they're wrong. Another case of Osbourne cosying up to big business like the typical tory snivelling cuntbag he is, whilst he hits the easy targets as hard as he can to make up what he should be collecting from his millionaire mates.

Fucking disgusting, and if the obsequious little weasel was serious he'd reform the tax laws to make sure that companies like Starbucks, Google, Amazon etc, pay the hundreds of millions they collectively owe the country in tax, that they're otherwise evading.

 

[ECA]

Labour did fuck all about it for 15 years Sar, it's not like its a 1 party thing.

 

[Hawkwind]

Ooooh a non fat soy milk, triple shot, decaf, Latte please! Cmon wtf is the point! Actually heard a women order that yesterday, might as well as had a bottle of Evian.

On topic, Government gives tax incentives so big corporations will setup and employ people in UK. The jobs and wealth these jobs create bring in taxes and reduce the burden of social benefits. Without these incentives companies would move the jobs East. You start taxing the companies more and they up and leave taking only a tiny percentage of the employees with them. It's a double edge sword and one each government has trouble balancing. Unfortunately with austerity measures in place the current government are trying to guilt certain companies in handing more than they would legitimately owe. Spread the pain seems to be the order of the day.

 

[ECA]

Also margeret Hodges family run Stemcor.

http://www.telegraph.co.uk/finance/...or-denies-abusing-corporation-tax-system.html

Last year Stemcor said it made a loss of £2.9m in the UK on turnover of £2.1bn. It paid tax of £157,000.
Wat. My dads business paid around the same :/
Fuck em, the lot of em.

 

[Hawkwind]

When I personally pay more in tax THIS YEAR than Starbucks have in the past THREE YEARS, then even morally they're wrong. Another case of Osbourne cosying up to big business like the typical tory snivelling cuntbag he is, whilst he hits the easy targets as hard as he can to make up what he should be collecting from his millionaire mates.

Fucking disgusting, and if the obsequious little weasel was serious he'd reform the tax laws to make sure that companies like Starbucks, Google, Amazon etc, pay the hundreds of millions they collectively owe the country in tax, that they're otherwise evading.

You do realise there is actually more money in the labour party than in the conservatives. So that whole torys are toff wankers with the money is plain wrong. Tony Blair spent years cozying up to celebs and business figures. The business figures are understandable as any government needs to work with them. Champaign socialism like the last government tried was complete BS and yet again left the country in huge debt. Continually borrowing to pay for tax credits and other financially irresponsible crap left us as the second largest debtor to the IMF.

 

[Hawkwind]

Also margeret Hodges family run Stemcor.

http://www.telegraph.co.uk/finance/...or-denies-abusing-corporation-tax-system.html

Last year Stemcor said it made a loss of £2.9m in the UK on turnover of £2.1bn. It paid tax of £157,000.
Wat. My dads business paid around the same :/
Fuck em, the lot of em.

And who is responsible for the accountancy and tax systems that allow this? Companies generally pay what they owe, no more, no less. Audits on the books cofirm that they are correct. If tax authorities though there was an issue they would have gone after them.

I totally agree there needs to be a reform of taxation in the UK. Especially when it comes to Corporation and Comeercial Tax. But I really don't have a problem with companies paying what they owe to the letter of the law.

 

[Punishment]

No laws were broken, i don't see the problem, reform your taxation system.

Push it too far though and they may up shop and leave you down a couple thousand tax paying employees who will go from contributers to recepients.

Media spin tbh, if a loophole was there any good accountant would make use of it

 

[rynnor]

The solution on corporation tax is to drop it to 10%.

That would attract international businesses to locate here and make our small businesses more competitive.

 

[soze]

Starbucks have probably paid someone a lot of money to find all the ways to avoid paying tax. I do not think they need to be singled out as evil but i far from applaud them. If you look for a way to contribute as little as possible while also taking everything you can with the other hand then you are a leech. It might make business sense but from my point of view I do not sympathize with them at all.

 

[DaGaffer]

The solution on corporation tax is to drop it to 10%.

That would attract international businesses to locate here and make our small businesses more competitive.

No it isn't. How much corporation tax do Google actually pay in Ireland? (clue - fuck all)

 

[Cadelin]

Killswitch your facts aren't quite right. The government does give incentives to multinationals that are planning on investing in the UK, this requires investment and it is not what Starbucks are doing.

Starbucks are paying no tax because they are claiming they are not making any money!

The management of Starbucks have a statutory duty to their shareholders to work in the best interests of the company and to maximize shareholder return

A company that isn't making any money is not maximizing shareholder return! If this was the actual situation the Starbucks management would have been fired along time ago.

In the UK and most civilized countries you are innocent until proven guilty. These companies that claim they are doing nothing illegal are just staying far enough ahead of the law.

The Starbucks scheme is relatively straight forward. The UK company pays 'licensing' costs to another company that is based in a tax haven. That company makes a huge profit but doesn't pay any tax because it is in a tax haven. The UK company makes no profit and therefore pays no tax. Now it's obvious that these are not actually separate companies and they should pay tax but proving it is very difficult. If you set up different companies each year, shunt money through a bunch of different countries it becomes very difficult to track.

As long as we have the ability to move money round freely we will have this problem. There will always be another country which doesn't enforce the rules as well as the UK. Stopping/taxing money moving in and out of the country would stop the problem but also destroy the UK economy as we depend on imports and exports.

 

[rynnor]

No it isn't. How much corporation tax do Google actually pay in Ireland? (clue - fuck all)

Its about the net overall tax take though - companies moving here bringing jobs, paying tons of other tax and reducing social security payments.

 

[Litmus]

I don't blame the companies one bit. If it isn't in the law to pay they tax why should they? It's upto the government to put the laws in place to make sure they do.


I wouldn't pay any more than legally required either... Like most people.

 

[MYstIC G]

It's a trade off, no tax in exchange for employing people. It's a stupid trade off imho because coffee would still need to be made if Starbucks wasn't in the market.

They can fuck about with the tax system all they like, nothing will change for the better until we start increasing production/output (increased agriculture, industry & services).

 

[Hawkwind]

No it isn't. How much corporation tax do Google actually pay in Ireland? (clue - fuck all)

Ireland's laws for taxation and book keeping are more akin to the Bahamas than to the rest of Europe . Why do you think most of the worlds Aircraft Lessors were based in Dublin, depreciation accountancy rates are about the best in the world.