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Customers to boycott tax avoidance companies for Christmas

Starbucks: guilty pleasure?

Starbucks: guilty pleasure?

  • by GARETH ROSE
 

A CAMPAIGN against large corporations accused of tax avoidance in the UK is gathering pace with customers signing up to boycott retailers including Starbucks and Amazon in the run-up to Christmas.

Events to highlight the campaign include turning a branch of Starbucks in Glasgow into a creche and a petition from the anti-cuts group, UK Uncut, urging online shoppers not to use Amazon to buy Christmas gifts.

Both companies, which have their headquarters overseas, are being targeted because of allegations that they are not paying their fair share of corporation tax in the UK, despite making substantial profits.

Earlier this month, executives from some of the world’s best-known firms were questioned by MPs on the issue of tax avoidance. The head of Google UK and senior managers from Starbucks and Amazon appeared before the public accounts committee.

Starbucks admitted the Dutch government had granted a special tax deal on its European headquarters, which receives royalty payments from its UK business.

Amazon and Google also confirmed they used favourable 
European tax jurisdictions for their UK businesses. Amazon’s sales are handled out of Luxembourg, while Google’s advertising space is sold by a team in the Republic of Ireland.

Margaret Hodge, who chairs the parliamentary committee, said at the time she believed it was right for customers to boycott the three companies.

“One of our concerns is that the ability of global companies to choose where to they put their costs and their profits gives them an unfair tax advantage that damages UK-based businesses,” she said.

The plight of the global corporations has prompted a promotional blitz by independent retailers. Booksellers launched a campaign with red posters declaring: “We pay our taxes!”

Along with other High Street retailers, booksellers have been affected by the rise of online shopping, and hope to benefit if shoppers do boycott Amazon.

Neil Findlay, the Labour MSP, is among those urging shoppers to do just that, arguing that some companies are insulting the intelligence of the British public through the tax they pay.

He said: “The suggestion made by these companies that they do not make enough profit is preposterous and an insult to the intelligence of the vast majority of people in this country who pay their way.”

Coffee giant Starbucks has paid just £8.6 million in corporation tax in 14 years of trading in the UK – and nothing in the last three – according to reports. However, chairman Howard Schultz pointed to other taxes in his defence of the firm.

“Over the last three years alone, our company has paid more than £160 million in various taxes, including national insurance contributions, VAT and business rates,” he said.

Amazon’s UK sales amounted to £3.9 billion last year, but the company paid just £1.9m in tax – the equivalent of just 2.5 per cent, it has been reported.

Both Amazon and Starbucks declined to comment on the campaigns against them, but denied they had acted improperly over tax.

An Amazon spokesman said: “Amazon pays all applicable taxes in every jurisdiction that it operates within.”

Mr Schultz, chairman, president and chief executive officer of Starbucks Coffee Company, added: “Let me be clear: Starbucks has always paid taxes in the UK despite recent suggestions to the contrary.”

 

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