Starbucks in talks with UK’s Revenue and Customs
The widely popular coffee chain Starbucks have reported that they are in talks with HM Revenue and Customs and the Treasury concerning on the amount of UK tax that it currently pays.
This has become a financial news article because Starbucks is one of a few multi-national firms that have been criticised over the level of corporation tax payments that it has paid. Starbucks admitted that they were aware of the inequities and needed to do more in the UK concerning tax issues.
Additional funds have been made available by Chancellor George Osborne to investigate the issue of tax avoidance by multinational companies. An announcement will be made shortly concerning the extra funding needed to investigate tax avoidance issues.
Reports will be announced on Monday identifying the three major firms of Starbucks, Google and Amazon on the amount of taxes that have been paid in the UK.
Starbucks has confirmed that it understands that it has to build greater public trust at the corporate level. Feedback from its customers and employees are taken seriously and has impacted top management.
As part of the overall goal of Starbucks, it has been in discussions with HMRC and the Treasury concerning the tax situation.
With more than 700 outlets across the UK, sales are brisk but the taxes paid on the sales were none at the corporate level.
The money earned in the UK is transferred to an adjoining company in the Netherlands in royalty payments. This procedure infers that the UK division seemingly has losses.
This practice is not an isolated incident to one corporation. This is why extra funding will be necessary to work at the international level as well.
The compliance of Germany and France working with Britain needs to meld together in this situation. At the same time, careful steps must be taken in order to avoid having Britain being priced out of the world economy with modified tax procedures.
If the tax rules become too stringent then companies may decide to opt out of Britain. The tax loopholes must be closed and an equitable tax base must be created so that corporations can pay their fair share based on their profits.
Having a financial news article of this magnitude concerning corporate tax can have a negative effect given the status quo on UK based businesses, if the situation is not changed.