peterms Posted November 13, 2012 Share Posted November 13, 2012 In a truly genius PR move, Starbucks have posted a defence of themselves here. It's open for comments, so we learn that the first version of this masterful argument claimed that they pay lots of tax because of PAYE. Now amended, after someone pointed out that it's, er, the staff who pay this... Link to comment Share on other sites More sharing options...
Risso Posted November 13, 2012 Share Posted November 13, 2012 As you've posted, there are two trading companies. Yes, there is a UK company, and US company, both of who who make sales. The consolidated accounts are produced by a UK company. Link to comment Share on other sites More sharing options...
Risso Posted November 13, 2012 Share Posted November 13, 2012 In a truly genius PR move, Starbucks have posted a defence of themselves here. It's open for comments, so we learn that the first version of this masterful argument claimed that they pay lots of tax because of PAYE. Now amended, after someone pointed out that it's, er, the staff who pay this... A simple riposte to that would be that if they didn't operate in the UK and employ so many people, there wouldn't be any staff to pay the tax. But you're right, it's a pretty shit defence, I reckon I've done a better job than their CEO in this thread! Link to comment Share on other sites More sharing options...
tonyh29 Posted November 13, 2012 Share Posted November 13, 2012 FT has a decent article extract below UK dividends would be paid after corporation tax of 24 per cent if Starbucks UK made money. The licence fee bears only light Dutch tax, making it a cheaper way to extract returns in that situation. However, the fee’s level as a percentage of turnover – currently 4.7 per cent – is agreed with the UK’s Inland Revenue in line with what other tax authorities allow. So if the margins of Starbucks UK improve, Starbucks Europe cannot simply raise the fee to shield profits from UK tax. The reality is that Starbucks is doing poorly in the UK. Local rival Costa Coffee is running (coffee) rings round it. And if some multinationals pay low levels of corporation tax in the UK and other markets, it is the fault of governments, not businesses. They talk up multilateral crackdowns on avoidance while individually trying to lure footloose company registrations with loopholes and low headline rates. Link to comment Share on other sites More sharing options...
peterms Posted November 13, 2012 Share Posted November 13, 2012 A simple riposte to that would be that if they didn't operate in the UK and employ so many people, there wouldn't be any staff to pay the tax. But you're right, it's a pretty shit defence, I reckon I've done a better job than their CEO in this thread! One of the questions asked to one of the three companies yesterday, I forget which, was about whether if they had to pay more tax they would leave. There was no answer. What if they did? In the case of Starbucks, there would still continue to be plenty of competition in the coffee shop market, plenty of choice. If their strategy has involved bidding up shop rentals to silly prices to squeeze out competitors (a more likely explanation of their high property costs than simple stupidity, I think), then that might be good for other retailers, less good for the investment trusts and pension firms which own most shops. Hard to see why the amount of consumer spending on coffee would decline rather than just go to other shops, so the impact on net employment is unclear but certainly wouldn't be just a loss of the equivalent number of all current Starbucks jobs. The (corporation) tax take would increase, and other tax revenues would depend on what else happened to the vacated premises and where the staff ended up being employed. Probably a lot less disruptive than the closure of eg an off-licence chain with supermarkets picking up most of the business, if the coffee trade went instead to independents and other chains. I wonder why, on balance, it might be anything other than a good thing if they did pack up and go? Link to comment Share on other sites More sharing options...
drat01 Posted November 13, 2012 Share Posted November 13, 2012 Inflation going back up - up from 2.2 to 2.7 % and this is one they can't blame the weather for !! Link to comment Share on other sites More sharing options...
Risso Posted November 13, 2012 Share Posted November 13, 2012 That's the point I made before Tony. It's an agreed percentage, so if they sold £100m more of coffee, they couldn't manipulate this to shift more profit. Same with the cost of sales. Starbucks just don't sell enough coffee. Mostly because it's shit, and their stores are really, really annoying. Link to comment Share on other sites More sharing options...
Risso Posted November 13, 2012 Share Posted November 13, 2012 One of the questions asked to one of the three companies yesterday, I forget which, was about whether if they had to pay more tax they would leave. There was no answer. What if they did? In the case of Starbucks, there would still continue to be plenty of competition in the coffee shop market, plenty of choice. If their strategy has involved bidding up shop rentals to silly prices to squeeze out competitors (a more likely explanation of their high property costs than simple stupidity, I think), then that might be good for other retailers, less good for the investment trusts and pension firms which own most shops. Hard to see why the amount of consumer spending on coffee would decline rather than just go to other shops, so the impact on net employment is unclear but certainly wouldn't be just a loss of the equivalent number of all current Starbucks jobs. The (corporation) tax take would increase, and other tax revenues would depend on what else happened to the vacated premises and where the staff ended up being employed. Probably a lot less disruptive than the closure of eg an off-licence chain with supermarkets picking up most of the business, if the coffee trade went instead to independents and other chains. I wonder why, on balance, it might be anything other than a good thing if they did pack up and go? Yes, that's always what happens when large companies close, their staff just get picked up elsewhere. Link to comment Share on other sites More sharing options...
bickster Posted November 13, 2012 Moderator Share Posted November 13, 2012 Inflation going back up - up from 2.2 to 2.7 % and this is one they can't blame the weather for !! This one is down to the Tory govt no doubts. It's mainly to do with University tuition fees doubling. Well done Liberals, spectacular policy fail Link to comment Share on other sites More sharing options...
drat01 Posted November 13, 2012 Share Posted November 13, 2012 What a complete plank The guy from Amazon giving an amazing indication in to what (or what doesn't) go on at their company Link to comment Share on other sites More sharing options...
peterms Posted November 13, 2012 Share Posted November 13, 2012 Yes, that's always what happens when large companies close, their staff just get picked up elsewhere. No, very often not. And sometimes even if they do, there's a real loss of skills and capacity in particular industries. If you close an engineering firm and the staff end up minicabbing for example, the economic effect is negative. In the case of Starbucks, I struggle to see what would be lost. But Grant Thornton tell us to be careful Mike Warbuton, senior partner at Grant Thornton said current attitudes risked sending the wrong message. "There is a balance to be struck on this issue. We all have to pay our taxes and it is important that they are applied on a fair basis. At the same time it is vital for the UK to demonstrate that we are open for business and welcome investment from overseas. Multinational companies do not have to come here and if we drive them away our economy will suffer and jobs will be lost. " Link to comment Share on other sites More sharing options...
peterms Posted November 13, 2012 Share Posted November 13, 2012 What a complete plank The guy from Amazon giving an amazing indication in to what (or what doesn't) go on at their company In that clip, the comment from the Tory about the need for country-by-country reporting is very important. That is one of the things they need to require if they are to tackle this stuff. Link to comment Share on other sites More sharing options...
Risso Posted November 13, 2012 Share Posted November 13, 2012 It'll be interesting to see if Stemcor are called before Margaret Hodge. A swift look at their accounts shows numerous companies in low tax jurisdictions, eg a "marketing" company in Guernsey, a trading company in Dubai etc etc. Link to comment Share on other sites More sharing options...
tonyh29 Posted November 13, 2012 Share Posted November 13, 2012 This one is down to the Tory govt no doubts. It's mainly to do with University tuition fees doubling. I heard that on the radio this morning .. they didn't give an explanation as to why though ?? Strangely they said petrol prices had kept the figure lower than it could have been ... Link to comment Share on other sites More sharing options...
tonyh29 Posted November 13, 2012 Share Posted November 13, 2012 It'll be interesting to see if Stemcor are called before Margaret Hodge. A swift look at their accounts shows numerous companies in low tax jurisdictions, eg a "marketing" company in Guernsey, a trading company in Dubai etc etc. I'm more interested to see them go after Windrush ventures Link to comment Share on other sites More sharing options...
drat01 Posted November 13, 2012 Share Posted November 13, 2012 I'm more interested to see them go after Windrush ventures When a Tory starts to try and point score on tax avoidance you know the world has gone mad. Ahem Mr Ashcroft? etc etc etc I don't Fink so? ...... Link to comment Share on other sites More sharing options...
bickster Posted November 13, 2012 Moderator Share Posted November 13, 2012 I heard that on the radio this morning .. they didn't give an explanation as to why though ?? Strangely they said petrol prices had kept the figure lower than it could have been ... To a simple layman as myself it would appear that if something goes up in price, thats inflation. Fuel has come down in price marginally over the last month or so round here anyway Link to comment Share on other sites More sharing options...
tonyh29 Posted November 13, 2012 Share Posted November 13, 2012 When a Tory starts to try and point score on tax avoidance you know the world has gone mad. Ahem Mr Ashcroft? etc etc etc I don't Fink so? ...... One can have a little bit of light hearted fun you know, why does everything have to be about points ? it's not like points make prizes on here do they ... All of our questions are based on a poll of 100 people...... What % of people thought Ashcroft had been mentioned in a VT thread more times than Prescott ? Ohhh What a lovely audience! You're so much better than last week's. Link to comment Share on other sites More sharing options...
drat01 Posted November 13, 2012 Share Posted November 13, 2012 Ahem Tony - the Fink comment? ......... you jumped in before reading :-) Link to comment Share on other sites More sharing options...
Dr_Pangloss Posted November 13, 2012 Share Posted November 13, 2012 To a simple layman as myself it would appear that if something goes up in price, thats inflation. LOL that's basically it, obviously only those stupid enough to be doing their degree in this country will be getting hit by the bulk of it and will be 'felt' in the main by a specific subpopulation of people in this country, but it is still the thing driving most of the change in the CPI, the rest is down to energy and food prices. What also needs to be considered in the falling/stagnant real wage in this country, which has huge implications for purchasing power given this latest inflation data and living standards going into the future. Link to comment Share on other sites More sharing options...
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