Picture an individual who pays more tax per year than the
gargantuan coffee titan that is Starbucks. A firm that has over 800 outlets. A
world renowned brand which employs 7,000 staff in the UK alone. Who is this
person? Bill Gates? No, it’s actually me. I’m not eating caviar, as I write, I
am slurping a bowl of porridge made from value-brand oats and contemplating a
4000% APR payday loan to cover the rent.
At this point you may be quite confused. How can someone in
such circumstances pay so much tax? The truth is quite simple. Starbucks pays
even less. How much? Billions of pounds worth of sales but they haven’t paid a
single penny in tax over the last three tax years. Of course having so many
staff and stores does create large overheads but in reality Starbucks are still
doing pretty well in the UK. A large chunk of their overheads are actually paid
to other portions of the business for their coffee which they buy at an
inflated cost, and perhaps more staggeringly, for the ‘intellectual royalty’ of
the brand; bear in mind Starbucks is not predominantly a franchise.
And it’s not just Starbucks, Google and Amazon have also
been under fire from a committee of MPs this week. Google paid a
not-so-eye-watering £3.4m in tax on a much more impressive £2.5bn in sales.
Amazon on the other hand paid £1.8m on its considerably less substantial
turnover of £200m. Of course, companies only pay tax on profit, not turnover
and herein lies the problem. Much like Starbucks, Amazon and Google are accused
of using, in the committee chair’s words “immoral” and “evasive” tactics to
avoid paying tax by coming up with ways to massage overheads and using tax
havens to ferry money around.
With so many struggling, ordinary people having to pay taxes
while these giant companies get away with paying next to nothing, this news, a
little like my porridge, is a bit hard to swallow.
