Starbucks Sales Fall in Wake of Public Outrage Over Tax Avoidance

by Editor | April 25, 2014 5:34 am

STARBUCKS SALES FALL IN WAKE OF PUBLIC OUTRAGE OVER TAX AVOIDANCE –In the past year Starbucks has felt the full force of passive democracy as the public boycott their coffee due the efforts it makes in avoiding paying corporation tax on its UK sales profits.

Once again it is crystal clear that the people do not need the Government to take action; which is evidently often weak and ineffective.

The power of passive democracy has now seen Starbucks having to close six of its shops as it witnesses a drop of some £14 million during the past year alone; it’s likely Starbucks will suffer further as long as it remains obtuse to the public and ultimately its customers over its tax affairs.

According to Starbucks, and despite the losses, it still plans to open a further 100 coffee shops this year alone; it could be a move that they wholly regret if they don’t address the public’s concerns that they should not be avoiding paying tax on their UK profits.

Starbucks of course is not alone in engaging in tax avoidance, indeed the likes of Google and Amazon have also been ousted in such practices and whilst these are completely legal the public feels such is wholly immoral.


Amazon Under Attack for Tax Avoidance

Outrage Over Google Tax Avoidance in the UK[1]

There is no denying that the Treasury could do with the money; after all Britain is now heavily into debt and fast approaching the £1.4 trillion mark and whilst we at totally support the public’s attempt to bring these companies to book it is ultimately their responsibility to their shareholders to reduce costs and increase profits.

The fault lies not within the companies themselves but rather Government for they are charged with creating laws and yet despite the vast number of public servants, the so-called experts, none have been capable (or may be willing) to close the loopholes in tax legislation that continues to allow these companies to legally avoid paying their fair share of tax.


Tax Avoidance in the UK

A number of MPs have admonished Starbucks, Amazon and Google for their ‘immoral’ practices and yet the fault lies squarely with MPs and Ministers; of course it’s easier to vilify the companies than it is to admit your own failings.

Whilst Starbucks is certainly feeling the effects it doesn’t alter the fact that they still managed to turn a profit of £399 million.

After revelations broke in 2013 of the company avoiding paying tax it was the first year the company didn’t see a rise in sales.

At this point Starbucks still has 731 outlets and the loss of just six won’t ring any alarm bells for to the company’s possible future in the UK.

Starbucks is adamant that sales will rise again in 2014 which will allow it to aggressively expand by a further 100 outlets.

Public anger initially broke after Starbucks posted sales of more than £3 billion from its 700 stores but it posted losses in the UK due to vast payments being made to the Netherlands for using its logo and brand.

In order to avoid taxation further it coffee beans are purchased through a company based in Switzerland which dug further into the UK taxable profits.

According to the accounts filed at Companies House, Starbucks has only once paid UK tax since entering the UK high street in 1998.

Despite a number of MPs, including the Prime Minister, David Cameron, admonishing companies of the immoral practice none have taken any action to close the loopholes that continue to allow for such abuse.


Google CEO Eric Schmidt Meets Cameron but PM Refuses to Question Schmidt on Tax Avoidance

Last year, in the wake of public outrage, Starbucks made what was seen as merely a token gesture to pay for its sins by offering the Government a one off payment of £20 million to cover the last two years; an offer the Government readily accepted but has to date only seen £15 million.

Starbucks has announced that it is to change some of its practices, for instance the rights for its logo and brand would this year move from the Netherlands to Britain.

Once again it is clear that people can take action and action that doesn’t involve any acts of violence.  Remember if you want to hit a company hard then hit them were it really hurts and that is in the balance sheets bottom line and this is easily achieved by simply refusing to buy their products.

  1. Outrage Over Google Tax Avoidance in the UK:

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