Starbucks not playing fair over what tax they pay

The Starbucks in Tudor Square. Photo by Theo Cummins
The Starbucks in Tudor Square. Photo by Theo Cummins
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On December 11, you published the story, “Starbucks hit back after Sheffield coffee shop daubed with ‘Pay your tax’ graffiti”.

The article reads like an inspiring story of a plucky underdog, (coffee monolith Starbucks), standing up to a bully, (one or more individuals with a can of green paint and dubious artistic ability).

You describe the graffiti as the act of “vandals”. Kids destroying a bus stop, students urinating on a war memorial, and graffiti written on a Starbucks shop front are all acts of vandalism.

But the meaning of these actions surely differs with the context, both for the perpetrators and the victims.

You then report Starbucks’ reply.

“It’s a pity that this vandal is so ill-informed.

“We pay our taxes and in our last financial year we paid over £11 million in corporation tax.”

Starbucks certainly did pay £11m in tax last year, but it is hard to see this as anything other than a PR concession.

As Reuters reported, Starbucks UK have long resisted writing cheques to HMRC.

Between 1998 and 2012 the chain made “over £3bn pounds in coffee sales but paid only £8.6m pounds in income taxes.”

Clearly, Starbucks’ definition of ‘fair’ is very different to the rest of us.

This year’s minuscule tax bill, (far smaller than those of comparable companies), is also due to Starbucks’ practice of pretending its UK division barely turns a profit.

It was only in 2014, they would have us believe, that all our cappuccinos actually pushed them into the black.

Or would The Star’s readers consider fair the UK division’s arrangement of paying royalties to its Dutch European headquarters, therefore avoiding taxable profits, as revealed when the coffee chain appeared before the Public Accounts Committee in 2012?

£11m in no way reflects the amount the company would have paid if they had genuinely wanted to make a fair contribution to HMRC, given the profits they make selling coffee to UK citizens.

Laurence Peacock

by email