Tax avoidance v Tax evasion

Can anyone tell me what Starbucks have done wrong? Following advice of their accountants they paid tax at the level they were legally obliged to, not a penny more. Exactly what we would all do. Just wish I was earning enough to employ tax specialists to advise me.

Starbucks employed tax specialists to ensure they fully complied with UK tax laws, and only paid the amount that was lawfully required. Due to the way they are organised, they also pay Corporation tax in another country, so overall, they are not saving a massive amount.

The UK Chancellor is no longer happy with the concessionary tax laws that these companies are complying with, and is seeking to change them. They are stirring-up public disapproval by making it sound like they are cheating the UK out of revenue, and are also clamping-down on other successful global companies like Google and Amazon.

Since these companies also have to legally comply with the tax laws in the countries where their parent companies also have to pay tax on profits earned in the UK, any changes in the amount they have to pay in the UK will cause them to re-think their marketing strategy and cut-back on their current level of investment in the UK economy.

Thanks for that

Plus , how much does the Government get from all the employees of the company, the VAT on the goods they sell, The uniform business rates and poll tax and other hidden taxes. Plus the savings of not paying benefit to all their employees if they were not employed?. The Government just assumes that we are all too stupid to ask these questions. Another smokescreen to cover their own nefarious practices.

I would guess that when you take all the different taxes into consideration, every pound earned creates 72p in tax when spent.

If anyone remembers the mid sixties, there was a special tax bracket of 98% for our country's highest earners, which caused a good many of them to emigrate or 'shelter' their income in tax havens - the Beatles even wrote a song about it (Taxman).

It seems the UK government would rather have 98% of nothing, than 30% of hundreds of millions - they have learned nothing from other countries that offer tax concessions to global companies if they invest in the economy and create employment.

It has been going on for a very long time. When I worked for a company in Luxembourg in the early ninties the largest offices were occupied by the big accountancy firms like Arthur Anderson. Even then companies were using Luxembourg's low corporation tax rate to base their European operations there. Earlier than that in the 80's Apple and many others located in Eire because of the low corporation tax rates as well as tax incentives.

Funny you should mention Luxembourg - I have just finished listing some items on eBay.co.uk, and I noticed that the listing fees include 15% VAT - not the usual 20% UK VAT. This is because eBay have their administrative base in Luxembourg, and only charge me VAT at the local rate. Same thing when I bought something on Amazon recently.

When you think of the amount of business that eBay does, wouldn't it make sense for the UK government to offer a concessionary rate of VAT to companies that have based their operations abroad, to encourage them to move back to the UK?

Today (Monday 3rd December) is known as 'Cyber Monday' and is the biggest day of the year for online shoppers, making the most of their last paycheck before Christmas - what a shame that the UK government have priced themselves out of a share of the VAT from Google, Amazon, Apple and eBay (to name just a few). Instead, they are probably considering raising UK VAT even higher to make up for the shortfall from increased overseas sales and lower high street sales!

You can't fix stupid!