Starbucks pays £20 million as stores become empty for Tax Avoidance

Starbucks pays £20 million as stores become empty for Tax Avoidance 1

As news filters across the UK of Starbucks offer to pay more corporation tax, protests from tax avoidance campaigners are being stepped up in equal proportions. The organisers of these protests, UK Uncut, say they are protesting at Starbucks cafes across the UK, despite a statement from the coffee giant, in which they pledge to pay millions of pounds of extra corporation tax for the next two years. UK Uncut spokeswoman Anna Walker said: “What Starbucks has done is offer a £20m PR stunt that’s coming straight out of their marketing budget. They haven’t offered or committed in any way to change the way they deal with their tax affairs in the UK or globally.”

In an apparent attempt to highlight the coffee chain’s tax avoidance measures, which include paying no tax in the last three years, protesters have been demonstrating outside Starbucks ‘flagship’ London store in Conduit Street. UK Uncut said it had also heard of other demonstrators who were gathering at ten outlets in London, Birmingham, Oxford and Nottingham. And BBC political correspondent Ben Geoghegan said the Starbucks store in central London, had been “virtually empty” following protests.

UK Uncut, say the coffee company’s promise to pay £20m is ‘a desperate attempt to deflect public pressure’ from itself and implied that it is merely a meaningless publicity gesture to assuage the public. Starbucks are obviously taking the protests seriously as they have said they are happy to meet protesters to “discuss their concerns”.

UK Uncut spokeswoman Walker said: “Starbucks is the tip of the iceberg when it comes to multinational companies tax avoidance – what we want to do is see the government clamping down on tax avoidance in a very real way.” She added the government’s failure to recoup tax from such companies was leading to harmful austerity. What Walker wants is to transform at least 40 Starbucks properties into “refuges, crèches and homeless shelters” as UK Uncut believes that they should also highlight the impact of government cuts on women and other societal matters.

A Starbucks spokesperson responded to the protests by UK Uncut in a statement that read: “Our highest priority is and remains the safety of our customers and employees. We trust that UK Uncut will respect it. We offered to meet with UK Uncut to discuss their concerns and make the protest a safe event for all involved. This invitation remains open.” The statement went on to clarify its position regarding payment of corporation tax and said that it had “listened to our customers” and was “making a number of changes in our business to ensure we pay corporation tax in the UK”.

The unprecedented feeling of ill-will towards Starbucks and may other multinational companies who are avoiding paying corporation tax in the UK was highlighted in an article by Shoppersbase a few days ago, when we revealed the top ten culprits. It is thought that due to overwhelming public pressure, Starbucks decided to pay, in a gesture of goodwill and set aside £20 million for the next two years, stating that it would pay “a significant amount of tax during 2013 and 2014 regardless of whether the company is profitable during these years”.

Shoppersbase revealed that the coffee chain paid only £8.6m in corporation tax in its 14 years of trading in the UK, and nothing in the last three years – despite UK sales of nearly £400m in 2011.

Starbucks now says it expects to pay around £10m in corporation tax for each of the next two years, a move described by tax experts as unprecedented.

UK Uncut have also held demonstrations outside various London Topshops, where people have been seen holding placards that state ‘Pay your £300 million tax bill Philip Green!’ And inside Barclays and Natwest banks.

For more information about which companies are avoiding their tax bills, visit the UK Uncut website.

Source & pictures: BBC News & UK Uncut