Since 1971, Starbucks has been committed to ethically sourcing and roasting the highest quality coffee in the world. Today, with stores around the globe, and over 700 café’s in the UK, keeping its costs down by paying staff minimum wage, it has recently been revealed Starbucks failed to pay their corporation tax to the UK Exchequer last year.
Starbucks claimed to have made a loss 14 out of the 15 years it’s been trading in the UK, despite its £398m turnover just from last year. However of course it didn’t make a loss…
Starbucks along with many other multinational companies uses legal structures to channel their revenue into countries with lower tax than the UK. Starbucks is said to pay its royalties for the use of things such as the logo to a firm in the Netherlands whose tax rates are 4% lower than those in the UK.
Other offending organisations such as; Apple, Amazon and Google for similar reasons, also channel their money into low tax countries. Google’s advertising is run by a team in Ireland, another country when tax is considerably lower than in the UK. Amazon sales of over £3bn generated in the UK last year, were generated to Luxembourg.
Andy Street, managing director of John Lewis believes that tax avoiding companies such as Amazon could start to out-invest those who are paying full tax.
Andy Street told Sky News in an interview: “If you actually improve your business by investing… you have got less money to invest if you are giving 27 per cent of your profits to the Exchequer than, clearly, if you are domiciled in a tax haven and you’ve got much more.’
Read more: http://www.theweek.co.uk/business/tax-avoidance/50111/john-lewis-solve-amazon-tax-problem-or-well-go-bust#ixzz2DXwTvEgn
So do you believe that the only way to solve this problem and to stop the tax dodging multinational companies form creating threat to grow and survive for those paying the correct tax is to boycott these organisations?
Should we reduce the tax in the UK that large organisations pay on their profits?
I read an article in yesterdays Guardian, suggesting that a Fairtrade type labelling system should be bought into action, ‘FairTax’ for example, rewarding all those organisations correctly paying tax with the stamp of approval.
Read more: http://www.guardian.co.uk/money/2012/nov/27/tax-avoidance-fairtax-label-reward
I believe that until HMRC decide to name and shame the tax avoiders this would be a good idea, it would help people to differentiate the ‘good’ with the ‘bad’ and make their own mind up to steer away from Starbucks and perhaps opt for a Costa instead.
We want to know what you think, what would be the best way to deal with the tax dodging companies?
Let’s start the debate!
Gabriella
Everything Ethics 