Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - 22nd Jul 17
Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts - 22nd Jul 17
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17
Global Currency Reserve At Risk - 14th Jul 17
Picking Great Gold Stocks - 14th Jul 17
BBC Tree Expert's Verdict on Sheffield Amey / Labour City Council Tree Felling's - 14th Jul 17
SPX Cycles, Fed Funds and Gold - 14th Jul 17
Should Platinum Be More Expensive Than Gold? - 14th Jul 17
What's Next for US Dollar, Stocks, Bonds and Gold? - 13th Jul 17
India Gold Imports Surge To 5 Year High – 220 Tons In May Alone - 13th Jul 17
Gold and Silver: Your Stomach Is Probably Wrenching Right Now - 13th Jul 17
Gold Industry Is In A Deep State Of Dysfunction, Delusion And Denial - 13th Jul 17

Market Oracle FREE Newsletter

Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts

Starbucks £23 Million Tax Dodge Facts, Offers £10 million Donation per year for 2 years

Politics / Taxes Dec 07, 2012 - 04:53 AM GMT

By: Nadeem_Walayat

Politics

Starbucks is feeling the heat as the general public is seeing through the smoke and mirrors of its publicity machine's assertions that it effectively makes no profits in the UK when the reality is that Starbucks for well over a decade has been transferring its profits abroad to the likes of the Bermuda tax haven and instead reporting losses, giving it an unfair advantage over smaller competing UK coffee houses who do pay an infinitely greater amount of tax on profits.


Starbucks in response to growing public outrage and consumer boycott has just announced that they are choosing to pay £10 million a year for 2 years as a donation to HMRC, which still amounts to a mere pittance of the actual tax they should be paying as the following analysis illustrates.

Starbucks Profits and Tax Facts

Starbucks annual UK turnover £400 million

Corporation tax paid - ZERO - Declared a loss of £32 million instead.

Group profit margin - 19%.

Comparison with UK rival Costa Coffee

Costa annual UK turnover £377 million

Profit £49 million - Profit Margin 13%

Corporation tax paid for 2011 - £15 million

Therefore tax due on the basis of profit margin and the Costa example, Starbucks should pay between a minimum of £16 million and upto as much as £23 million on the basis of a 19% profit margin, that accumulatively estimates to have avoided corporation tax of £200 million over the past 10 years against an actual payment of less than £9 million.

great to be a Starbucks shareholder!

Other Corporate Tax Dodgers

  • Amazon - £3.5 billion UK turnover
  • Google - £2.6 billion UK turnover
  • Apple - £10 billion UK Turnover
  • EADS - £3 billion UK Turnover
  • IBM - £3.8bn UK Turnover

The effect of this disparity in tax rates paid is highly damaging to the British economy, because it results in large multi-nationals having an unfair advantage over small domestic rivals who cannot compete and are eventually put out of business, and thus resulting in job losses and lack of investment as foreign multinationals pull capital out of the UK (un-taxed profits), instead there needs to be a level playing field in terms of tax for all corporations that operate in the UK.

A recent report by the Commons Public Accounts Committee estimated the total tax loss to Britians at as much as £32 billion per year as a consequence of multinationals and most of Britain's wealthiest individuals funneling profits and income off to the likes of the Cayman Islands tax haven and then using front companies to buy property in London without any tax liability.

The other side of the equation is that the government would just waste this tax income on the likes of the NHS black hole and the benefits culture, so having the pain of being in receipt of less revenue prompts governments to deal with the real issue that is out of control government spending.

What is the Answer ?

The real answer to kick start Britain's economy would be to CUT taxes, to cut the corporation tax down to 10%, that would make tax avoidance by multi-nationals less advantageous and allow British businesses to better compete and to expand and employ more workers thus igniting a real economic boom rather than a deficit and debt fuelled unsustainable government spending booms of past. Especially as many of these politicians that spew anti avoidance outrage on both Labour and Conservative benches are expense fiddling tax dodgers themselves!

In the meantime ordinary UK tax payers continue to subsidise the likes of Starbucks and the 1% of Britain's wealthiest.

Source and Comments: http://www.marketoracle.co.uk/Article37922.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2012 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of three ebook's - The Inflation Mega-Trend; The Interest Rate Mega-Trend and The Stocks Stealth Bull Market Update 2011 that can be downloaded for Free.

Stocks Stealth Bull Market Ebook DownloadThe Interest Rate Mega-Trend Ebook DownloadThe Inflation Mega-Trend Ebook Download

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife