Starbucks give in to consumer pressure

Image by Ems van Goth available at http://www.sxc.hu/photo/664329

Over the weekend it was announced that Starbucks have been in discussion with the tax man, HMCR, about their tax position.

It would appear that the ‘Royalty Fees‘ paid to the UK parent company based in low tax Holland are negotiable and Starbucks is planning to retain profits in the UK and pay corporation tax on them.

This all started, or at least hit the headlines when CEOs for Starbucks, Apple and Google were called to Public Accounts Committee and asked to explain why they  had paid so little tax in the UK (See original post)

Since this must see live TV ‘roasting’ was aired and shown on news programmes Starbucks, the most visible and the multinational paying no Corporation Taz at all and having professed to have made losses in the UK took the most flack.  This has led to the climb down and rather  justifies the outrage by MPs and the public at what Margaret Hodge Chair of the Public Accounts Committee called  “outrageous and an insult to British businesses and individuals that pay their taxes.”

At the minute one can only speculate as to the impact of public action against Starbucks in the UK – but anecdotally stores have been seen almost empty while highstreet rivals such as Costa and independents have been crowded.

So is this stepdown as a result of “people power”, the exposure by the public accounts committee or the threat of a crack down on tax dodging companies which will be part of his Autumn statement?

Telegraph – Starbucks first to cave in over tax row.

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