The second device Starbucks used to shift profits out of the UK was to buy all their coffee beans in Switzerland, another low-tax jurisdiction. As we established at a Public Accounts Committee hearing, however, only 30 staff worked there — and the coffee beans never entered Switzerland.
Yet because the coffee was ordered from there, Starbucks outlets in the UK had to pay the Swiss part of the business a 20 per cent mark-up on the original price.
That cleverly knocked another chunk off Starbucks’ UK profits — and further reduced the amount of corporation tax payable in the UK.
It would be illegal if Starbucks didn’t pay a margin to the Swiss coffee bean broker.