Skip to main content

Starbucks again

Starbucks’ supposed losses have made the FT this time, with a jokey article which nevertheless manages to miss the point. Good for Starbucks. The tax system is a bad joke. The more people who run rings round it, the more people will notice. One can only hope that eventually the penny will drop and real reforms will be put in place. The taxation of individuals and corporations is wrong in principle. The former are mobile and the latter are abstract legal entities. To attempt to tax them is on the same level of futility as trying to collect smoke in a string bag. It should not, however, be forgotten that Starbucks pay business rates, and they also pay the tax and NI nominally paid by their employees.

If tax avoidance is a concern then the quick fix solution is to get rid of corporation tax and replace the lost revenue by putting up the UBR. In the long term the UBR needs tidying up but to avoid tricks like “constructive vandalism” nobody can exploit tax havens so as to get away without paying property taxes.

And on that subject, Starbucks is paying “tax” to its landlords for the use of property which is also quite likely held by offshore companies.