UK tax evasion scandal: Amazon, Google and Starbucks to face inquiry

Written on:November 12, 2012
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Starbucks coffee shop in Toronto

Starbucks was attacked by G20 summit protesters on June 27, 2010 in Toronto. UK Uncut is planning to vandalise Starbucks shops this December

Starbucks will face the MPs inquiry today on how it manged to dodge tax, as it managed to pay meager amounts to Britain while making big bucks in profits, just as UK Uncut, a UK-based protest group has announced that it will target Starbucks in its anti-tax avoidance demonstration, carried out throughout the UK. Alongside Starbucks, Google and Amazon would also face the inquiry by Select Committee today.

The Public Accounts Committee (PAC) which oversees monitoring of government financial affairs has asked Starbucks, Google and Amazon to provide evidence regarding their tax avoidance in Britain, amidst growing public pressure on government to question big multi-national companies that have repeatedly evaded taxes across the globe.

The direct action group UK Uncut plans to turn dozens of the coffee chain’s UK branches into creches, refuges and homeless shelters to highlight Starbucks sales tax avoidance tactics. On December 8, UK Uncut said campaigners would be selecting specific Starbucks branches will be targetted.

UK Uncut, the campaigning group, which has opposed government’s austerity measures, and which has organised protests against British telecoms operator Vodafone and pharmacist Boots over their tax practices, previously, is now geared to target Starbucks for its misdeed.

Last month, Starbucks sales tax evasion scandal emerged when it came to light that the coffee chain paid 8.6 million pounds in total UK tax over 13 years during which it recorded sales of 3.1 billion pounds.

Meanwhile, Google’s tax evasion tactics showed that the search giant avoided UK tax by channelling non-US sales through an Irish unit, an arrangement that allowed it to pay taxes at a rate of 3.2% on non-US profits.

Amazon evaded the UK taxes by reporting European sales through a Luxembourg-based unit. This tactic allowed it to pay a tax rate of 11% on foreign profits last year, which is less than half the average corporate income tax rate in its major markets.

Starbucks sales tax dodged for three years
eBay, Ikea follow Starbucks in tax evasion scandal
Apple tax rate dodge: Pays less than 2% tax on foreign earnings


5 Comments add one

  1. Steve Boucher says:

    It was quite interesting to watch Austin Mitchell’s performance and his expressions of incredulity at Starbuck’s inability to post a profit in the last 15 years – wasn’t his party in Government for 13 of those?

    The accounting channels used by these companies are not illegal, (although perhaps immoral), but Labour had ample opportunity to deal with this.

  2. charles McClintock says:

    This tax evasion has been going on for as long as I can remember, not only by the big companies but by many thousands of smaller companies, developers, lawyers, etc. It is no good blaming the companies if the UK tax authorities i.e. Exchequers and Inland Revenue can’t get their act together. One such company is a firm of lawyers in South London, Hugh Cartwright & Amin. There is no and never has been a Hugh, there is no and never has been a Cartwright but there is an Indian by the name of Amin (South London) There is also a Mr.Sodagar in that outfit and they siphon large amounts of money off via Jersey to BVI. What Starbuck and the others have done is common practice and is not a point of morals. ”They” (Government + IR) allow it to happen and whoever can will use that system. It is time for the Government to get their act together as billions are hived off each year.

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