Have you walked past an emptier than usual Starbucks lately? If yes, you’re not the only one, far from it. Since the news broke that Starbucks hasn’t paid corporation tax for fourteen of the past fifteen years, my timeline has been busy with tweets about people walking by and seeking out a Costa Coffee, Caffe Nero, or even an independent coffee shop. There are many alternatives to Starbucks on the high street. They’ve never been my preference – I think their coffee sucks, and maybe that’s another story…
But for now, hallelujah, happy days – Starbucks has seen the light and is deciding it will pay more tax in the future. More than nothing eh? Well I guess that is a start. I feel for the people on the Starbucks frontline, I doubt they knew of their bosses decisions to play the tax system for maximum corporate advantage, yet what little job security they have is being made even more fragile by the current absence of customers.
In its press release, Starbucks says, ‘We have listened to feedback from our customers and employees and understand that, to maintain and further build public trust, we need to do more.’ You don’t say?! And this admission implies to me that listening, whether it be to customers or employees, has not previously been a Starbucks strong point. So – looking on the bright side (ish), we now have a company willing to tip a few coppers into the UK tax system (at least until they’re sure no one is looking again), and they’ve had some kind of listening epiphany. I hope that this will make Starbucks a better place to work in future.
While all this plays out, other companies being criticised for similar tax avoiding practice include Amazon and Google. Neither of these companies has blinked yet. And why should they? Who do we order our online Christmas shopping from? And where do we go for internet searches? Hmm… Neither Amazon nor Google faces the level of competition that Starbucks does, and of course none of these companies is breaking the law as it stands, however morally repulsed by their decisions we are, or are not.
It strikes me that whilst customer and employee pressure should be given its due, the simplest way for Government to get a grip on this taxation fiasco is to act decisively and change the tax laws. We’re all in this together, right? In the meantime, I’ve booked a day off to go Christmas shopping in the real world, well Brighton at least
There was a story doing the rounds yesterday that Starbucks have cut their front line people’s paid meal breaks and some other so-called ‘benefits’ this week. Call me cynical if you like, but that will be as a result of someone in their hierarchy giving an order that they have to find some cost savings from somewhere in order to fund their contribution to George Osborne’s coffers.
So, I won’t be darkening their doorstep anytime soon, even if their service has improved over the last year or so.
Is there an ‘ethical’ coffee shop chain?
Graham is absolutely correct – the people who really pay the bill on corporation tax are the customers, employees and shareholders. Time the government thought about a more efficient tax system perhaps?
This article gives an interesting explanation:
http://www.theregister.co.uk/2012/11/25/tax_and_tech_biz/
Yep, that is what Starbucks have done. And Boots, Vodafone, Topshitshop, Amazon etc.
And on wider issues – we all have responsibilities as purchasers – why do we not have outcries about the factories burning down in Bangladesh, making cheap clothes that the west buy? Do you honestly think it is acceptable to pay £1 for a t shirt? Or why do we buy from American Apparel when the owner insists on sexual favours from staff and candidates. Seriously, this is known. And accepted.
What has happened to any sense of shame by these corporations – and the senior people within them? And why do we not force it? Through boycott, protest and vilification? It’s not just the government Doug. They react to what they see we want (another topic is the lack of a big vision from recent prime ministers). So if they see we want changes, we will get it. Like the consumers we are.
And given what might be a startling remark about the CEO of American Apparel – here is just one article about him http://bit.ly/YI57Hk
Now, would you ever buy a t shirt from this man again? (it’s the bit about what he did in front of a journalist that is proven……)
Thanks Graham, Vandy and Julia. On reflection I think my post is really quite lame, your contributions have beefed it up for which thanks.
Graham – thanks for sharing what you’ve heard, I’m with you on continuing to avoid Starbucks and it’s easy for me, as I said before – I don’t like their product.
Vandy – the link you have provided is really interesting and provocative. I need to study it in more detail – it’s certainly got me thinking ta.
Julia – I don’t think it is acceptable to pay £1 for a t shirt no. I choose to consume less so that what I consume is, as far as I can be aware, produced in a more sustainable and ethical fashion. And I’m sure I unwittingly get it wrong. In my business, invoices are paid promptly too, I think there’s a lot we can all do to give each other a fairer deal. To your point about protest, that seems to be what has driven Starbucks – and it is not just Govt who could do more – though they could consider how to implement a different system perhaps? All very well for them to play the moral outrage card – these companies are (mostly) playing by the rules – and we don’t like the rules? Can we change them? Until such time – then maybe the mass peaceful protest thing is the answer. That takes a bit of effort mind – I’m happy to play…
£10M on £400M is somewhat less than I pay.
But it is ‘noble’, since I understand it is above the minimum lmao
The only way to stop them keeping the tax is to stop buying Starbucks.
The Great (coffee) Grain Robbery
Peter
Peter, how much do you pay on your £400m then?
It would seem that even Cafe Nero has undertaken some corporate jiggery-pokery!
https://secure.38degrees.org.uk/pages/tax_dodgers_guide
It does’nt seem right that the lawmakers complain – they should just change the law! Nobody else can do it for them.
Quis custodiet ipsos custodes?
Of course, by ‘boycotting’ Starbucks and the like, we are also penalising their front line people, who have done nothing wrong. Not sure of a way round that one
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