Starbucks has been in talks with HM Revenue and Customs this week regarding the amount of tax it has paid over the last fifteen years. Having recorded sales of £398 million in 2011, it paid no corporation tax, saying it didn’t make a profit, and hasn’t done for fourteen of the fifteen years it has operated in the UK. The company move 4.7% of sales to a sister company in the Netherlands and buys its coffee beans from Switzerland, both of which operate a different taxation system, taking considerably less tax from the company.
However, Starbucks isn’t the only company believed to be undertaking such matters to avoid UK tax regulations, Google, with a turnover of £396 million in 2011 paid £6 million in tax and Amazon, with a profit of £74 million paid £1.8 million in tax.
Operations that are housed in other European countries adhere to overseas taxation laws, claiming that because their business is based there, that is the taxation it should follow. A report produced on Monday called for HM Revenue and Customs to be ‘more aggressive and assertive in confronting corporate tax avoidance’. This is compounded with George Osborne stating that ‘while most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share.’