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A tax storm in a coffee cup

October 16, 2012

Several newspapers have highlighted the fact that Starbucks has paid no corporation tax in the UK in the last three years.  This is rather surprising.  I’m a bit of a latte junkie but resent coughing up about £2.80 a cup.  You don’t have to be a business genius to realise that this is one hell of a profit margin on the actual cost of the coffee and milk. Even when you factor in staff costs (catering tends to pay minimum wage) and rents the profits are still huge.

The coffee shop business has boomed in Britain in recent years.  In Bristol we are fortunate to have many independent cafes on all our high streets.  But the corporate franchise chains have also sprung up in every street.  I don’t mind that as long as they comply with local planning (Bristol has had a run in with Costa) but also pay their taxes.  Competition is good but it’s not fair if one cafe is able to plan tax avoidance.  An independent cafe has little in the way of clever ruses to dodge taxes.  But multi-national chains can siphon off profits via various company charges to head office for use of the brand name, loan interest or inflated prices for raw materials.

In Starbucks’s case they made (per the October 2011 accounts reported in today’s press) just under £400 million in sales.  But after deducting costs they made a loss of £33 million and so paid no corporation tax.  That’s simply not credible.  You see Starbucks in every major retail centre.  They’ve been trading and expanding in Britain for years.  They’re clearly not a duff business.

The perplexing fact is that many of these well known brand businesses put a great deal of effort into defending their name and making us feel good about their products.  But all the claims about fair trade coffee or action in the community (I have supported some groups in Bristol who get Starbucks sponsorship) are undermined if a company fails in a basic duty of corporate social responsibility – pay the proper level of tax.

So what can be done?  I’ve called for HM Revenue and Customs to have a good look at Starbucks’s activities.  But even if they’ve done nothing illegal they will still be offending the public if they are paying no tax on a business that is clearly a money spinner.  All of these big brands need to learn that aggressive tax avoidance infuriate people and will lead to brand damage.

Consumer power is the answer.  I will not be buying any lattes off Starbucks until they come clean about their tax avoidance activities.  Consumer boycotts have a long tradition in the area of coffee and sugar going right back to 18th century Quaker led campaigns in Bristol against the slave trade.  I hope that others will now boycott Starbucks.  Think before you drink and maybe we’ll get this company to act responsibly.

There’s also an on line petition, part of the wider campaign that I and my Liberal Democrat colleagues are leading for fairer taxes and a crack down on aggressive tax avoidance - http://www.fairertax.org/starbucks

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54 Comments leave one →
  1. October 16, 2012 4:16 pm

    Stephen, good for you. I’m interested in exploring the time-limiting or elimination of tax losses entirely from the UK tax code – there’s no reason to provide open-ended relief as we currently do.

  2. October 16, 2012 4:19 pm

    Hi Stephen

    So you weren’t boycotting Starbucks before then?

    Are you boycotting Costa as well?

    Why not just boycott ALL the big chains and say that you’re against multinational companies that don’t pay their tax?

    Why do Lib Dems cling to the view that it’s a good idea to consume from multinationals UNTIL they do something REALLY bad?

    • October 16, 2012 6:44 pm

      If you read any of the numerous posts I’ve made on my blog about tax avoidance or high streets you wouldn’t need to say that! Yes, I have not been in any of the Costas in Bristol for at least a year

      • October 18, 2012 8:30 am

        I read all of your blog posts. I’m aware of your support, which I appreciate.

        You’ve answered one of my questions – thank you.

        Could you now answer the other three? Thanks in advance.

    • October 22, 2012 3:58 pm

      Is there an issue with Costa? I thought they were one of the chains who did pay a fair share of corporation tax?

  3. Nigel Drew permalink
    October 16, 2012 4:46 pm

    So, Starbucks is to feel the mighty wrath of Lib Dem scorn. But what about all the other high street brands the pay no tax. You must be aware of them Stephen because UK Uncut have been campaigning for 2 years. We had a significant demonstration in Bristol which shut down many of them one Saturday afternoon last year.
    So lets hear Lib Dem support for campaigners like UK Uncut and lets hear you making a fuss about Barclays, Vodaphone, the Philip Green Empire ( Top Shop, Dorothy Perkins etc) and many others who pay no tax.
    It was estimated last year, that the amount of unpaid tax from major UK traders was equal to the sum of cuts your Tory bedfellows were using to shrink the state, privatise public goods and hammer the poor. And you still support them……Shame on you.

    • October 16, 2012 4:59 pm

      UK Uncut would be soooo much better if it was non-partisan…

    • October 16, 2012 6:46 pm

      Read all the other posts on my blog about tax avoidance and perhaps you;ll retract that comment. I raise this more than any other Govt MP.

  4. October 16, 2012 5:06 pm

    Firstly, gz on raising this with HMRC.

    Secondly, why weren’t your tastebuds boycotting Starbucks before? Coffee #1 undoubtedly has the best coffee in Bristol since the Boston switched supplier. Though the manager of the latter is quite accomodating when I ask for “Large latte, two medium shots, one dark” or as it is now known “My usual”.

  5. John Yapp permalink
    October 16, 2012 5:08 pm

    Hi Stephen,

    I thought accountants were there to sort any monkey business out with tax avoidance. I can’t avoid any tax on my meagre home-working earnings so why can these big company’s get away with it?

    The tax system needs to be sharpened & simplified, I have friends who work for the revenue & are at their wits end with the cuts there.

    With all the electronics today, why can’t every cup of coffee that goes through the tills be taxed at the current rate, & sent straight to the revenue.

    I will never pay these inflated prices for coffee, it must be the scottish ancestry I have holding me back!

    • October 16, 2012 5:24 pm

      “I can’t avoid any tax on my meagre home-working earnings”

      Tried claiming for things like ummm coffee? You should definitely be claiming back some of your rent and phone bills too.

      “With all the electronics today, why can’t every cup of coffee that goes through the tills be taxed at the current rate, & sent straight to the revenue.”

      That would be VAT. This is income tax. Nobody talks about VAT bills for some reason.

      • John Yapp permalink
        October 16, 2012 5:45 pm

        I do claim expenses that are allowed, & I also pay into the tax system as the law dictates, resenting it with the thought that so much is wasted in one way or another. Lump income tax & VAT all together? Money spent collecting tax is wasted money. Surely with all the human brains a watertight system can be thought up to collect tax with no loop holes. Where there is a “will” there is a “way”!

  6. David permalink
    October 17, 2012 11:39 am

    With your support and all other MPs let’s hope a national boycott campaign can bring Starbucks to its knees and then show all other non tax paying companies they are next on the list – worth a try people power against the greedy multi nationals
    Pls keep it up in and out of parliament

  7. October 17, 2012 1:31 pm

    Unquestionably this has already done significant damage to the brand, the only question that remains is whether it’s done sufficient damage for them to change their ways and cough up some tax. Without a much fiercer public backlash I think it’s unlikely they will change their taxation policy and pay the millions that they likely owe.

  8. Steve John permalink
    October 17, 2012 4:26 pm

    How much tax is paid by @dickc on the revenue generated by @swilliamsmp? Shall you be boycotting Twitter/Google or just Starbucks?

  9. Nigel Drew permalink
    October 17, 2012 4:26 pm

    I am all in favour of “people power” but I thought the function of government was to legislate on issues like massive tax avoidance. I would like to see some “parliament power” with some kind of sanctions for non compliance on “aggressive” tax avoidance…..perhaps some aggressive action like making directors “people unfit to be on boards” or somehow withdrawing the right of these robbers to trade.
    I cannot accept that LibDems in the coalition and MP’s in general have so little power in this situation….. except perhaps that so many of the robbers fund political parties and can afford expensive lobbying.
    If “people power” is all we have, better to use the energy in direct action to attack corporate capitalist abuses. Makes me even more convinced that voting for MPs is a waste of time. Parliament simply smooths out the process of corporations ripping us off by fudging and passing legislation to make it easier for them to rob.

  10. October 17, 2012 4:52 pm

    “If “people power” is all we have, better to use the energy in direct action to attack corporate capitalist abuses.”

    I agree. There are huge issues with the current state of tax legislation, but until those are fixed, it’s our duty to expose those who cheat the system. E.g. the super-rich Barclay brothers who not only avoid UK tax but are also suing the HMRC for £1bn… Read more: https://barclaybrothers.wordpress.com/2012/09/18/the-littlewoods-tax-case-or-how-the-barclay-brothers-sued-the-hmrc-for-1bn/

  11. Alex B permalink
    October 17, 2012 5:07 pm

    As far as I can see, the root causes of our tax problems are:

    1) An over-complicated tax code, caused by governments of varying stripes trying to curry favour with certain groups by inserting and allowing loopholes

    2) Government that spends too much on things that aren’t the priorities of its citizens. I think most British citizens, regardless of economic ideology, agree that some things should be a priority; world-class healthcare, free at the point of need, world-class education to a level which meets every individual’s ability and which is ideologically and religiously neutral, legitimate national defence, rule of law, and a dignified safety net for those unable to provide for themselves. Given the amount of tax collected by the UK government, I believe all these things should be both affordable and attainable.

    Regarding the first of these, I believe that simplification of the tax system is imperative and should be based around the following principles:

    1) Land Value Tax, to be regarded as funding essential national infrastructure. Allow this to be accrued against an individual’s estate after retirement. If you own or occupy land within the UK, you pay tax on it. Pretty difficult to dodge that.
    2) A consumption tax on non-essential (i.e. luxury) consumption; revert VAT to its original principles.
    3) Externality taxes set at levels which attempt to compensate for negative economic externalities of behaviour (operating a vehicle, consuming tobacco, recreational drugs and alcohol and so on). VAT can be seen as a specific kind of externality tax.

    The observant will note that I have omitted corporation taxes; which I contend no longer make sense in a globalized world and theories of tax incidence mean they aren’t actually paid by the corporation, but by its employees, shareholders (i.e. often pension funds and the like), customers and suppliers instead and income taxes; which I contend discourage working to earn, thrift, personal responsibility and sensible levels of saving whether for retirement, or a “rainy day”.

    • October 18, 2012 8:38 am

      Some brilliant ideas in these comments. Do you know if any other MPs read your comment section, Stephen? If not, they should!

    • November 2, 2012 2:28 pm

      “1) An over-complicated tax code, caused by governments of varying stripes trying to curry favour with certain groups by inserting and allowing loopholes”

      Actually the complicatedness of the tax code is down to trying to be fair, trying to limit tax evasion etc etc.

      A less complicated tax system would be a flat tax, obviously a massive tax cut for the rich.

      “world-class healthcare, free at the point of need”

      We’re already paying £120bn for it.

      “a dignified safety net for those unable to provide for themselves.”

      How dignified can it be seeing as so many are _unwilling_ to provide for themselves? £125bn already btw.

      “Given the amount of tax collected by the UK government, I believe all these things should be both affordable and attainable.”

      So you’re talking about reforming the NHS?

      “Land Value Tax”

      Wouldn’t raise very much but probably worth doing anyway. I think Latvia is the only place that has tried it and it only accounts for 3% of a tax take that is already lower than in the US.

      “2) A consumption tax on non-essential (i.e. luxury) consumption; revert VAT to its original principles.”

      What would be different?

      “Externality taxes set at levels which attempt to compensate for negative economic externalities of behaviour (operating a vehicle, consuming tobacco, recreational drugs and alcohol and so on).”

      Smokers already pay their way.

      Cars are already taxed beyond their CO2 output, though I’m not sure it covers land rental for roads, noise pollution, accidents etc.

      I once calculated £4bn revenue for legalising cannabis. Roughly the same as the cut in student funding coincidentally.

      • Alex B permalink
        November 2, 2012 2:56 pm

        “A less complicated tax system would be a flat tax, obviously a massive tax cut for the rich.”

        Not necessarily. As per my original post, I’d propose making LVT the main source of funding for the state. Yes, that means the aristocracy, church and the monarchy will owe significant tax unless they dispose of much of their land.

        ““world-class healthcare, free at the point of need”

        We’re already paying £120bn for it.”

        Yes, I’m arguing for keeping it, and improving the results.

        ““a dignified safety net for those unable to provide for themselves.”

        How dignified can it be seeing as so many are _unwilling_ to provide for themselves? £125bn already btw.”

        Note, *unable*. Those *able but unwilling* should still have access to *basic* necessities, because we have the resources to be able to provide such.

        ““Given the amount of tax collected by the UK government, I believe all these things should be both affordable and attainable.”

        So you’re talking about reforming the NHS?”

        Partly, yes. Which is why I didn’t actually even mention the NHS by name, instead referring to “world-class healthcare, free at the point of need”.

        ““Land Value Tax”

        Wouldn’t raise very much but probably worth doing anyway. I think Latvia is the only place that has tried it and it only accounts for 3% of a tax take that is already lower than in the US.”

        Actually, it’s already used in Taiwan, Singapore and Estonia. Some cities also use it. As above, I’d argue for making it the main form of funding for the state (the bureaucracy, defence, much of the NHS, education, roads, infrastructure).

        ““2) A consumption tax on non-essential (i.e. luxury) consumption; revert VAT to its original principles.”

        What would be different?”

        VAT is currently levied at the standard rate on adult clothes, furniture, DVDs, CDs, eBooks, computer games (but not on some other cultural artifacts, such as printed books, magazines, newspapers, theatre tickets), some types of food (crisps, but not tortilla chips; chocolate digestives but not choc chip cookies, takeaways and restaurants). Aircraft are 0% rated. Renovating buildings attracts VAT at 5%, sale of new domestic buildings is 0% rated. And so on.

        See http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm for a brief(ish) summary.

        ““Externality taxes set at levels which attempt to compensate for negative economic externalities of behaviour (operating a vehicle, consuming tobacco, recreational drugs and alcohol and so on).”

        Smokers already pay their way.

        Cars are already taxed beyond their CO2 output, though I’m not sure it covers land rental for roads, noise pollution, accidents etc.

        I once calculated £4bn revenue for legalising cannabis. Roughly the same as the cut in student funding coincidentally.”

        Yes, I’m arguing for maintaining those, but making them “pay their way” (as you put it) as precisely as possible, i.e. neither using them punitive “sin taxes” nor as ways to encourage certain favoured industries or practices through reduced levels.

  12. Andrew McDermott permalink
    October 18, 2012 8:22 am

    Mr. Williams,

    If the loophole exists for companies operating in the UK to avoid tax, why are we to make a pariah of any company, let alone Starbucks? All of the businesses we might speak of as ‘avoiding tax’ are employing a substantial number of workers, whose income tax (and other payments) are directed to the UK Exchequer, and whose remaining income contributes to the consumer markets from which further taxes may be payable.

    If Starbucks are to be questioned regarding their financial status, can you please ask why have they closed two Bristol city centre stores, and a further three stores in the nearby counties (Chippenham, Wells, and Exeter) in the last six months? Are they in the healthy condition that we have assumed?

    If the law allows for businesses like Starbucks to legally ‘avoid tax’, then they are not avoiding tax payments. If the law allows it, why not focus your attention on changing the law for businesses operating in the UK, so that they are obligated to pay tax in the UK.

    Whilst I am making suggestions on changes to the tax laws, perhaps it would be helpful in the long term to put in place taxation or laws that would affect individuals owning more than two properties in the UK, so that those who wish to buy one property can afford to do so? Can the roads be appropriately managed by traffic & parking officials? Can expenses claimed by employees to ‘travel to work’ or eat ‘food’ be included in their salaries, and taxed as income? Can cyclists travel anywhere in the UK without prejudice or risk from other road users? Can consumers choose to opt out of advertising on television…?

    I could obviously keep going all day.

    My point is, you’re picking on businesses for acting legally, despite being a representative of the Government that could put in place legislation that might alter the level of taxation due from businesses operating in a Global context. Perhaps the Government could act to operate in a similar manner, and stop creating excuses as to why our economy is not turning over.

    One lives in hope.

    kind regards,

    Andrew McDermott
    Bristol South

    • October 20, 2012 10:36 pm

      Andrew, thanks for comments. On tax avoidance – yes at face value it is legal. take a look at my blog of 16th Sept for a discussion of issues re evasion/avoidance/tax planning. It appears that Starbucks are operating at the very aggressive end of tax avoidance. They put a lot of effort (much of it worthwhile) into protecting their brand. The point I am making is that big brands would do well to pay the proper rate of UK tax on their UK profits, that is the best statement they can make about corporate social responsibility. The role of the govt is to have a clear tax code and tight policing of compliance with that code. The Coalition Gpvt is putting a great deal of resource behind tax compliance by companies and rich individuals. We are also putting in place a General Anti-Abuse Rule (“GAAR”)

      • Andrew J. McDermott permalink
        October 22, 2012 12:45 pm

        Thanks for responding Stephen.

        I’m afraid I don’t understand the reference to ‘very aggressive’ tax avoidance. From my perspective, if they can avoid tax legally, they will, and assigning adjectives to this action isn’t productive. In light of the Sunday Times & Sunday Telegraph articles that indicate eBay, Ikea and other similar brands are avoiding tax, I suspect the presumption that Starbucks are doing something inappropriate or should simply ‘do the right thing’ will fall on deaf ears. We need clear legislation. I don’t think creating a petition that isolates one business is very helpful in the grand scheme of things.

        If you were to review Starbucks FY11 report, the UK market is listed as operating approximately 25% of their International market (store numbers). The US market is highly profitable, but in Canada, Japan, the UK and other International locations, the stores do not operate a healthy profit, and collectively use 95% of revenue to cover operating costs. The US has twice as many company operated stores as the International Market put together.

        The UK market is currently very challenging for retail operations in general, primarily because the economy is subdued, but one should not overlook the cost of property which has not deflated by the same margin as consumer derived revenue. I recall that in 2000, the Oxford Street branch of Starbucks was earning approximately £25,000 a week in revenue, but the cost of rent was approximately £20,000. This location might seem unique, but similar revenue/rent ratios exist all over the country, and one would presume not just for Starbucks.

        You reference Costa in your original essay, but as they are part of Whitbread (a UK registered company) the financial obligations they have in the UK are probably different to Starbucks (a US registered company). If the Government was to change the tax system to obligate a UK operating business to pay an Operating Tax, then all these coffee businesses would be on a level playing field. Or is that too naive an idea?

        You also reference minimum wage at the beginning of your essay, which I believe is contradictory to Starbucks business model. During my tenure with the company, baristas were paid hourly rates that were well above minimum wage, and weighted to geographical location, which obviously leads to more income tax for the government, higher national insurance payments (where applicable), and more funds in employees pockets to ‘contribute’ to the economy via other businesses operating in the UK.

        Perhaps it would be more even handed to ask Customs & Excise to report how many internationally recognised businesses operate in the UK, but are registered in other countries, and manage their accounts to ‘avoid tax’. If legislation is then appropriate, the Government will be better placed to apply rules that will appropriately capture tax from multiple revenue sources, not just Starbucks.

        NB: I was employed by Starbucks Coffee Company in the UK between January 1999 and May 2008; I continue to be a customer, but otherwise have no professional or financial links to Starbucks Coffee Company.

  13. Joe FOX permalink
    October 21, 2012 11:01 am

    I amazed when politicians speak on subjects they know nothing about.

    Starbucks has been losing money hand over fist since almost say one in the UK as they were the ones brave enough to start-up full-on in a tea drinking country. Why they came unstuck is with rent. A coffee shop should typically be paying around 10% of its net sales in rent and Starbucks entered the market when the economy was to be undergoing a perceived boom and retails rents, unlike today, were sky high. Starbucks are paying around 25-30% across their estate for leases they signed 10 years ago, hence why the lose money. They just closed two stores in Bristol and one in Wells; amongst many others, and while they wanted to stay greedy landlords would not do a deal with them, thinking they were bluffing as they ‘must be making a fortune’. A bit like all these people whom don’t understand business and think just because your sales are XYZ and look great you must be making a profit. NONSENSE. It’s a tough business. So they closed those stores which they were carrying financially for all those years because they cannot simply walk away from the lease, they are legally obliged to keep paying the rent and if they close the store go into default. So those shops are now all empty!!!! Profit. Seriously!

    With regard paying a 6% royalty to the US. Well they are owned by a US parent and for goodness sake do not say they are all owned by the same people, they are not! An extraordinary amount of Starbucks outlets in the UK are under local business license and they are about to take on individual franchisees for the first time in the world. They are not doing this because they are making a profit; they are doing it because they are losing money and local people whom choice to buy a franchise will be able to offer better service than a corporate owned chain.

    This was why Costa went into franchising, and then learnt from the franchisees. Just look at Costa outlets in Bristol; you personally attacked a hard working local couple, whom were virtually suicidal at the end of it all, whom did nothing wrong and were completely exonerated from your spiteful and despicable actions. They run brilliant coffee shops (despite your best efforts that cost the council over £70k in total costs and made the head of the planning department resign because of the actions of your ignorant councillors). Starbucks have a huge support team in the USA whom do much of the work like designs, buying, sourcing, etc. and this needs to be paid for.

    So Mr Williams, yet again you are very wrong and yet speak as if you know what you are talking about. Shame on you. Your minions and unthinking followers will follow you because the sadly believe you should know better, but you obviously don’t.

    Starbucks is a world leader in how to be decent and ethical and if you bothered to understand business (which generates the taxes that pay your marvellous salary) then you would know this.

  14. Suzanne Fletcher permalink
    October 22, 2012 1:50 pm

    Agree with Stephen and others about importance of companies in UK paying UK tax. However the other big linked issue is only buying Fairtrade coffee, to ensure that the farmers who produce the coffee get a fair and stable price for their labours.

    • Andrew J. McDermott permalink
      October 22, 2012 4:06 pm

      Hi Suzanne

      I completely agree with the principle of Fairtrade purchasing, and would hope any successful coffee retailer will be determined to supply sustainably sourced produce, especially from the coffee producing Equatorial regions.

      It may surprise many to know that all Starbucks whole bean coffee is Fairtrade certified, and furthermore Starbucks has been committed to directly supporting the farmers and their local communities from which the Whole Bean coffee is supplied for nearly 16 years.

      • October 22, 2012 8:31 pm

        Yes, as I acknowledged, Starbucks are on many measures a good company. But being a good corporate citizen is about more than being a good employer or buying fair trade beans. Paying the expected rate of tax on profits is also part of the equation.

      • Suzanne Fletcher permalink
        October 22, 2012 8:35 pm

        fully agree, fairtrade is just part of the equation.

      • Andrew McDermott permalink
        October 24, 2012 11:24 am

        Forgive me continuing with this, but what is the expected rate of tax? The figures I have seen indicate no tax is due, because Starbucks UK operation has not made a profit.

      • October 24, 2012 4:58 pm

        Andrew – UK corporation tax is 24% in the 2012 fiscal year (down from 28% in 2010 and set to fall next year to 23%) – this is levied on profits chargeable to corporation tax. The issue here is the amount of PCTCT and what is deducted to arrive at it. Clearly somehow Starbucks have got from a big gross margin on sales to a net loss after overheads. So what are the overheads? There may well be high rents on some outlets, as you say. BUt all of them? Even if that were the case, there are some other big deductions going through. I would welcome some transparency from Starbucks on what they are

      • Andrew McDermott permalink
        October 24, 2012 6:01 pm

        Thanks again for your reply.

        I suspect that rent costs, especially in stand alone high street locations, have more to answer for than we might think sensible.

        However, this may be of interest to you Mr. Williams. If you have further questions, Howard has a reputation for replying personally.

        http://starbucks.co.uk/blog/setting-the-record-straight-on-starbucks-uk-taxes-and-profitability/1241

  15. Joe FOX permalink
    October 22, 2012 3:36 pm

    http://www.accountancyage.com/aa/opinion/2218626/starbucks-tax-story-exposes-lack-of-knowledge

    “This week’s report that Starbucks has paid just £8.6m in taxes on a reported £3bn in UK sales since 1998 is a classic example of the nonsense that is becoming all too familiar. It really is tax analysis straight from the kindergarten.” AccountancyAge

    • October 22, 2012 8:29 pm

      The article criticises a Labour MP who has jumped on the bandwagon on this issue and says people do not know the difference between turnover and profit. As is quite clear from the opening para of my blog, I certainly do know the difference. Gross profit margins on coffee sales are huge. It is up to Starbucks to explain how they eventually arrive at a net loss for tax purposes.

      • Joe FOX permalink
        October 23, 2012 9:56 am

        As mentioned before, rent. Their rents were/are far, far too high and that has eaten all margins. They came into the UK thinking perhaps they would see sales grow as per the USA, and signed some very scary leases, as did many retailers, and have had to endure those decisions for a decade. As with the two stores in Bristol and Wells that have just closed (with enourmous losses), the end of the lease was upon them and landlord’s bluffed them thinking, like you, that they must be making money and they were not. The USA was not preperated to sustaine further losses so they are closing store rapidly that are end of those very high rent deals that never worked for them. They are now going into franchising, first time every in the world, as local franchisees would know to a much finer degree what rents should be paid and simply would not enter into high rent deals, plus unlike a large company where people are far too cavalier with money a local franchisee has to manage every penny as its their own money. I have no doubt in 3 to 5 years Starbucks will with 25-30 franchisees it aims to attract across the country, to open new and also take over some of their stores, will become profitable and indeed have the luxury of paying corporation tax.

  16. November 2, 2012 10:50 am

    It’s really not fair on the little guy that whilst big corporations can dedicate a lot of their resources to tax avoidance whilst, an independent coffee shop can’t.
    I always get my Coffee from the smaller places, not only because Starbucks/Costa prices are highly inflated, but as a business owner myself I can emphasise with the proprietor and do my bit to support them#.

  17. Mike permalink
    November 14, 2012 9:48 pm

    Stephen, I’m definitely not a Lib Dem but I am really impressed by your activities and position on issues like this. Keep it up.

  18. paul hunt permalink
    November 15, 2012 10:20 am

    This leaves a bigger burden on the rest who do pay their taxes which is unfair. It is usually the poor who end up paying more.

  19. November 15, 2012 11:49 am

    Starbucks sell crap coffee anyway, all foam and very little coffee in my experience. So my avoidance of them will be easy

  20. Rich4d permalink
    November 19, 2012 10:10 am

    Thank you Stephen, this type of business practice is destroying small businesses, who are then getting punished harshley by the HMRC. Our apathy as consumers is shamefull but not as shamefull as the apathy shown by governments world wide.In the UK these companies also have staff limited to 20hr weeks which limits tax & NI contributions and pay mostly minimum wage. WAKE UP BRITAIN!!

  21. David Moore permalink
    December 3, 2012 4:34 pm

    Good for you Stephen. I have for some time switched to Costa Coffee as the coffee is properly made (rather than a press of a button at Starbucks) and it tastes better. Their owners, Whitbread, are I believe a strong UK company that pays its fair shares of taxes too

    Many reasons not to go to Starbucks anymore.,,,

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