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Starbucks 'paid no UK tax since 2009' ... US coffee chain has only paid $14m in corporation tax in UK since 1998, and nothing in past three years, probe finds.
Last Modified: 16 Oct 2012 20:16 Starbucks said it was committed to the UK and plans to create 5,000 new jobs over the next five years [GALLO/GETTY] Coffee giant Starbucks has reportedly only paid $14m in corporation tax in the UK since 1998, and nothing in the past three years, despite racking up sales of more than $4.8bn. A four-month investigation by news agency Reuters found that overall the firm had paid less than one per cent in corporation tax. The coffee chain defended its actions, saying it had paid the appropriate level of tax. In a written response, the US company said: 'We have paid and will continue to pay our fair share of taxes in full compliance with all UK tax laws, as we always have. 'There has been no suggestion by any authority that we are anything but compliant and good tax payers. 'We do this in a way that is consistent with the values that have guided us since we were founded more than 40 years ago: balancing our need to operate a profitable business with a social conscience.' Starbucks said it was committed to the UK and pointed out that it plans to create 5,000 new jobs over the next five years. 'Clearly wrong' The group's overall tax rate, including deferred taxes which may or may not be paid in the future, was 31 per cent last year, much higher than the 18.5 percent average rate that campaign group Citizens for Tax Justice says large US corporations paid in recent years. But on overseas income, Starbucks paid an average tax rate of 13 per cent, one of the lowest in the consumer goods sector. Overall, the tax rate globally last year was much higher than average at 31 per cent, but on overseas income, Starbucks paid an average tax rate of 13 per cent, one of the lowest in the consumer goods sector. Speaking to Al Jazeera, campaigner Richard Murphy, from Tax Research UK, who was consulted by the Reuters team as part of its investigation, said: 'When we have a tax system that lets very large companies like Starbucks be on our High Street and pay no tax, and are competing with small, locally owned businesses, who are paying tax on all their profits, then there's something very clearly wrong with our tax system.' Starbucks is not alone in facing criticism for its low tax bill. In April, a report in the Guardian newspaper said that online retailer Amazon had generated sales of more than $12.2bn in the UK over the past three years but had not paid any corporation tax on the profits from those sales. Source: Agencies Last Modified: 03 Dec 2012 17:16 Starbucks to 'start paying' UK tax Almost having one third of the UK coffee shop market, Starbucks has paid corporation tax only once in the past 15 years. 
IMAGE Since first trading in the UK in 1998 Starbucks has paid $13.8 million in income tax, despite high revenues [Getty Images] US Coffee giant Starbucks has said it is considering changes to its UK tax practices, which allowed it to make billions in revenue while paying little in income taxes. A Reuters news agency examination of Starbucks accounts published in October showed the company had reported 13 years of losses at its UK unit, even as it told investors the operation was profitable and among the best performing of its overseas markets. The announcement comes after a report published on Monday criticised how multinational companies were avoiding tax in the UK. The Public Accounts Committee, which published the report, said the HM Revenue and Customs (HMRC) needed to be 'more aggressive and assertive in confronting corporate tax avoidance'. The report said the level of tax taken from multinational firms with large UK operations was 'outrageous and an insult to British businesses and individuals who pay their fair share'. Starbucks, for example, sold nearly £643 million worth of goods in the UK last year, but paid no corporation tax at all, because it transferred some of the money to a sister company in the Netherlands in the form of royalty payments, bought its coffee beans from Switzerland and paid high interest rates to borrow money from other parts of the business. The Public Accounts Committee's report also criticised Amazon and Google, neither of which has paid much corporation tax. 'Reconsidering tax arrangements' Overall Starbucks has paid no corporation tax over last three years for which figures are available and has only paid $13.83 million pounds income tax since 1998, despite racking up $4.8bn of sales. Despite having almost one-third of the UK coffee shop market, Starbucks has paid corporation tax only once in the past 15 years. Corporation tax is paid by foreign companies on profits made in the UK. The revelations led to calls for a boycott of the store and protests at its branches, and the company's Chief Financial Officer Troy Alstead was called to give evidence to a parliamentary committee. Starbucks repeated on Sunday that it had always complied with British tax laws and blamed its low tax payments on a tough operating environment in the UK. However, a spokeswoman added in an emailed statement that the public mood had caused the company to reconsider its tax arrangements, which include intercompany royalty and interest payments that reduce the UK unit's taxable profit. 'We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more,' she said. The company, the largest coffee chain in the world, with a market value of $39bn, said it would release more details later this week. As a reponse the UK finance ministry has as announced it will provide HMRC with $123 million of new money to help it track down wealthy individuals and companies who tried to avoid paying tax. Source: Agencies
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| Two stories ... 16 Oct 2012 20:16 and 03 Dec 2012 17:16 The text being discussed is available at | http://www.aljazeera.com/news/europe/2012/12/2012123162211899541.html |