We either accept that some of the most popular companies operating in the UK are not paying their fair share in taxes or we do something. The paralysis of our politicians, who can only berate from the sidelines while execs from Amazon and Starbucks lie through their teeth, is in stark contrast to what happened when Marie Antoinette allegedly said the poor could eat cake. But we, the public, look just as pathetic as our MPs. “I simply can’t stop drinking my Starbucks coffee,” is an oft-heard refrain this past week. Really? Do you sprinkle heroin on top?
Starbucks claims to make no profit in the UK with 7,000 low-paid staff in over 800 outlets. Starbucks paid no corporation or income tax in the UK in the past three years. At all. Nada. Zip. Nowt. And it gets worse: the world’s biggest coffee chain paid £8.6m in total UK tax over 13 years in operation here, during which time it recorded sales of £3.1bn.
MPs told Troy Alstead, Starbucks’ global chief financial officer, that the company engaged in aggressive tax avoidance in the UK. He declined to give details publicly of a favourable rate granted by the Netherlands on a proportion of profits transferred there in the form of an intellectual property “royalty” on UK shops. Dutch authorities wanted that to remain confidential, he claimed. You can bet they did, if it’s true.
Amazon’s director of public policy, meanwhile, failed to explain to MPs yesterday who owns the company and was unwilling to disclose the income made by the British arm of the business. An executive from Google admitted it operates in Ireland because of a low corporation tax rate there of 12.5% and was later accused by the committee chair, Margaret Hodge, of “immoral” behaviour. It avoids paying UK tax by channelling non-US sales through Ireland, an arrangement that means taxes are paid at a rate of just 3.2% on non-US profits. It also diverts some profits through Bermuda.
We may no longer remove the heads of the hostile and crooked rich, more’s the pity, but we can stop acting as though we have no choice but to let these companies do what they want.