Starbucks’ tax policy: Yet another reason to go independent

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STARBUCKS AND THEIR TAX POLICY

As I am sure you are all aware, it recently came out that U.S coffee chain Starbucks have been avoiding tax payments (they have been paying tax, but nowhere near as much as they should).

Reuters have revealed that Starbucks “…made over £3bn in UK sales since 1998 but had paid less than 1% in corporation tax.” Pretty shocking figures, I think it’s safe to say. Most of the recent barrage of criticism has been aimed directly at Starbucks, the main protagonist in this drama, but the British government have also played an important role. While I strongly disapprove of Starbucks’ actions, a large portion of the blame lies with the British government, who have let Starbucks get away with years of tax avoidance.

Starbucks is of course not the first large corporation to avoid tax payments. However, the extent of their tax evasion is still very surprising. Their actions have had a direct impact on smaller chains and independent shops. It has affected their competitiveness, driven up their costs, and left them as the main corporation tax contributors. Big chains do a lot of good but it’s imperative that they do not abuse their dominant position in the market in the form of unfair competition.

If there is an independent coffee shop in the same area as a Starbucks, go for the independent option. Not only will you be provided with better coffee and superior surroundings, but paying more will help to counterbalance Starbucks’ current tax policy.

Don’t get me wrong, I am not against all large corporations and Starbucks do a lot of good community work. They donated coffee twice a week to the Soup Kitchen where I used to work, which was fantastic. However, their tax policy has impacted on many great independent coffee shops and this is an issue that needs to be highlighted.

Starbucks Mug

 

 

2 Responses

    • Henry

      11/01/2012, 08:58 am

      Essentially they reinvest/pay bills in other countries with the profit they make in the UK to ensure that they can report losses (to the British tax man) which means they can avoid paying any substantial amounts of corporation tax in the UK.

      Reply

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