But Labour MP Margaret Hodge, who chairs the influential Public Accounts Committee, urged customers to boycott the company until it changes its ways. She said: ‘I think it’s an insult to ordinary hard-working taxpayers across the country.
‘Hopefully it’s a big enough insult to his customers that they will take their business elsewhere. They will not win back the trust of the public unless they unwind these immoral schemes.’
It doesn’t make a profit. So therefore it doesn’t pay a profits tax on the profits it doesn’t make.
What is so damn difficult to understand about that?
As to paying a royalty for the brand to a non-UK company. The EU says it’s illegal (yes, actually illegal) to try and tax such a royalty being paid to another EU country. given that then it’s very difficult to try to argue that that’s a dodge.
Further, from the EU’s own investigation into the level of that royalty we do actually know that it is correctly calculated, on an arm’s length basis. they actually reported on this: companies not in the group pay the same level of royalties as companies within the group.
And then there’s that 20% margin on the coffee to Switzerland. Those international tax rules, those transfer pricing guidelines, actually insist that there must be a margin on such purchases. For no company outside the group is going to supply beans at no margin, is it? Thus there must be a margin paid by a company inside the group.
Seriously, this entire thing is entirely made up. And yes, we do know by whom.
Accountant Richard Murphy from Tax Justice Network, who worked on the initial investigation exposing Starbucks’ tax affairs, said: ‘Starbucks says it is not making a profit. But it has so far failed to convince anybody else.
‘When it makes its books open on the tablefor everyone to see we might accept what it is saying as the truth.
‘But until then we’re still in the dark and it still isn’t paying any tax.’
But we have looked at it all and they’re still really not making a profit!